An estate agency has been criticised for taking fees from buyers and vendors, known as ‘double-charging’.
Over the weekend The Guardian published an article which criticised north-west London agency Elliot Lee for charging buyers what it calls a ‘client progression fee’.
The charge of £1,495 is paid by buyers after they have had their offer accepted and is reduced to £1,000 if they use the firm’s preferred solicitor and mortgage broker, The Guardian reports.
A prospective buyer contacted the newspaper to complain about the firm after she was given a document titled: ‘Making an offer through Elliot Lee’ during a property viewing.
The document states that once a buyer’s offer is accepted, the agent requires ‘immediate payment’ of the client progression fee.
According to the Guardian, the document also states:
“This charge will be retained by us if from the time of payment we have not received written instructions from your solicitor within 72 hours and a survey has not been instructed within 21 days. Once the survey has been carried out … you will have up to 10 days to withdraw your offer and have your client progression fee returned. After this period, the client progression fee is non-refundable unless the vendor withdraws.”
After being approached by the newspaper, the agent stressed that the fee is not a ‘pre-contract deposit’ as prohibited in The Property Ombudsman’s Code of Practice.
Elliot Lee has made a statement, which reads:
“Elliot Lee believes its client progression fee is compliant with the code of practice. Most buyers don’t object to paying this fee and are happy with the service they receive. We pass all offers to the seller, and the seller is free to accept any offer, including one from a buyer who does not wish to pay the fee … We have found that the likelihood of a sale concluding increases markedly where a buyer pays this fee, since it shows that the buyer has greater commitment to progress the sale. We refund the fee to the buyer if the buyer receives an adverse surveyor’s report or if the seller pulls out of the sale.”
Last month an outer London agency, Brian Cox, was also criticised by The Guardian for charging buyers £2,000 deposits in order to be ‘taken seriously’.
In light of the bad publicity, the five-branch agency said it was returning money to buyers.
The agency then defended the policy, saying it improves the quality of service it offers its vendors.
One of the firm’s directors told Estate Agent Today that he had a ‘moral problem’ with buyers making excessive offers and then withdrawing at the last minute.