The Brian Cox estate agency, at the centre of a weekend newspaper allegation about £2,000 deposits from buyers, has strongly defended the practice saying it helps smoke out serious buyers and improves the quality of service offers to vendor clients.
Greg Dusgate, one of the directors of the five-branch outer London estate agency, told Estate Agent Today: “We’ve been taking deposits for about a year and did so on between 30 and 40 properties out of around 200 we sold during that period.”
He continued: “We’d seen developers do it and some estate agents do it, and our thought was that if it saved some of our deals from falling through then it was a good idea.”
Dusgate told EAT that he had a “big moral problem” with buyers who made excessive offers, quite often far above the asking price of a home on sale, only to withdraw the offer at a later stage or cut their size of their offer.
The agency was accused by The Guardian of insisting on the £2,000 deposit in return for taking a property off the market.
Brian Cox has withdrawn the scheme and has returned the £2,000 deposits to all buyers bar one, who is currently overseas and cannot be contacted. Now Greg Dusgate says he is considering his response to the article.
He says he is considering a complaint to the Press Complaints Commission because of inaccuracies in the article, and he says he may switch redress scheme from The Property Ombudsman to the Property Redress Scheme.
“The Property Ombudsman says agents should not take deposits in the way we did. That policy came into effect only in August of last year - after we’d started taking deposits - and we didn’t see it, so that was an oversight. But the PRS says it is acceptable so long as we create a formal contract and hold the deposits in a secure separate account. We’re considering just that” he says.
[TPO has asked EAT to point out that, in fact, its Code of Practice has always (not just since last year) had a paragraph saying that pre-contract deposits should not be taken because they will inevitably cause the buyer to think that the house purchase has been successful – a sale is only formally agreed at exchange of contracts.]
Dusgate also emailed EAT with a comment from a member of the public that had been emailed to the agency over the weekend in response to the article:
“I just wanted to say why on earth did you withdraw this scheme?. This is exactly the type of scheme needed to eliminate the very common scenario of buyers pulling out of a purchase without a moments hesitation. It's ironic how the complainant ended her rant with "she wasted a month of her life" by withdrawing from the purchase, I wonder if she spare a moments thoughts for the many vendors who have wasted months of their life due to the likes of her who have no scribbles walking away prior to exchange, anyway I wish other firms had stood up and backed you in defending this deposit scheme.”