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Another agent criticised for charging buyers

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.  

  • Simon Shinerock

    In essence, provided all parties are kept informed, it makes sense to split fees betweent the buyer and the seller and to set out penalties for a 'change of mind'. It's amazing how long it has taken to get to grips with reforming the established 'no sale no fee no commitment' model which currently relies on unfair sole agency agreements to function. When you hear of an agent who is having a go at improving things you have to applaud the effort.

  • icon

    First time I agree with a post from Mr Shinerock - and no OTM bashing!

  • Trevor Mealham

    The Guardian is very anti estate agents. Read with a pinch of salt, knowing they know very little about the property market. How it works and how it should work.

  • Trevor Mealham

    Many parts of Europe and the USA/Canada work on dual fees, so whats wrong?

  • Rob  Davies

    That's neither here nor there, Trevor. In this case they're spot on. The practice is completely wrong.

  • Rob  Davies

    The point is, Trevor, buyers having to pay extra money (basically a bribe) to get agents to take their property most seriously. If not exactly immoral, it's certainly unethical. And then, if you use the firm's preferred solicitor or mortgage broker, you get a discount. That doesn't sound very fair and above board to me.

    This sort of activity is an open goal for journos and anti-estate agent bashers. Why give them the ammunition? The reputation of the industry is bad enough as it is, things like this are hardly going to help.

  • Kelly Evans

    @Hafsid Jalal - you're not the only one. I think I need a lie down.

  • Jon  Tarrey

    Double-charging comes across as cheeky and dishonest, even when that's not the case. I think agents would be well-advised to steer clear.

  • icon

    I think one of the issues is that it is not the traditional system here - therefore when it does happen it seems like the agent is trying to make a cheap buck and taking advantage of the buyer. The reason it works in other countries is because everyone expects it happen and is well aware that that's the way it works...

  • Karl Knipe

    I don't see too much of an issue with it if all parties agree at the very beginning, but I can see how it would come across as a bit cheeky and unwarranted. Buyers changing their mind at the last minute is an annoyance, but that's part and parcel of being an agent - you have to deal with things like that and move on. I'm not sure charging buyers in this way is the solution.

  • Trevor Mealham

    Rob - look outside the UK. So long as people accept. Whats the problem. To bring recorm you have to make changes.

    In the UK we see many large companies use 0% models. In fact they charge the buyers. Auctioneers have been doing this for decades.

    Buyers and sellers are protected by their lawyers and UK law. So don't see a problem in agents running on buyer and seller fees.

  • Tim Gorgulu

    I think that's the issue, though, Trevor, it's not common practice in the UK so people see it as an underhand tactic to make estate agents more money. Again, perception trumps reality.

  • Daniel Roder

    Yes, Tim, this is more to do with perception. If this was accepted as the norm in the UK, there'd be no story. But because it's not, it looks sneaky and dishonest. The public think agents are merely trying to make a quick buck.

    By all means reform. But until that reform comes into play, play by the rules.

  • Kenny Sahota

    Incredibly cheeky of them to suggest to the buyer that their offer won't be taken seriously unless they pay even more money. I understand that when people are pulling out of offers it must be frustrating for estate agents but surely that is just part of the job - and one which they should have to deal with.

  • Trevor Mealham

    Section 5n TPOS says: Fees and Charges: This amendment highlights how agents must not charge the same service to more than one party in the same transaction.

    As such are the buyers being charged for different services than the buyers being charged for sales services??

    Reduced mortgage and conveyance fees? Maybe a good offer. Or not. Im sure the buyer/s sound the type to shop about.

    Laws the law. Just depends on whos getting what as interpreted by law. If unhappy the buyers should contact TPOS or their local TS officer.

    But for sure. Guardian is agent unfriendly and media can twist true or indepth facts.

  • Trevor Mealham

    Kenny - agents have to put forward all offers unless clients have placed in writing conditions (such as a low limit) where offers need not be accepted.

  • Simon Shinerock

    Hooray for me :)

  • Neil Briggs

    If this practice was introduced across the board, we wouldn't have these issues. I think reform needs to be looked at, because there are too many variables at the moment that can cause a sale to fall through.

    They have dual fees on the Continent, maybe it's time we implemented them in this country too.

  • Neil Briggs

    Having said that, I do understand why people are up in arms about it. Whether intended or not, it does come across as a little duplicitous.

    I don't think the agent involved was trying to make a quick buck but I can see how it could be perceived that way.

  • Trevor Mealham

    Neil - I think part challenge is main portals allowing the likes of Easy, Purple, etc etc in.

    As such its easier to ask a buyer to pay a higher fee. Than have to fight other agents offering budget fees to sellers. In many ways traditional agent models would be better off such main portals. All said many feel they can't be.

  • Trevor Mealham

    Maybe a shift could be offering sellers 0% fees or paying sellers £500 on completion and charging buyers 2-2.5% Could pee off the budget agents

  • icon

    Anything to pee off the budget lot and I'm in! Isn't it true though that the average vendor fee is between 0.75 and 1.25%? Perhaps the Guardian could take not of that....bearing that in mind makes a buyer's fee seem a lot less unfair.

  • Jonathan Rolande

    @Simon Shinerock agree the system needs a shake up but suggest this is more like profiteering in a boom market than redressing any balance. That said, I don’t know all the facts.

  • Jamie  Humm

    Seems a bit dishonest to me, but wouldn't be an issue if it was introduced across the board in a fair and balanced way.

  • Algarve  Investor

    @Trevor Mealham - you assume all budget agents are offering a bad service. That's an extremely broad assumption to make, isn't it?

    We've seen it in other industries, particularly retail and aviation. Say what you want about Ryanair and EasyJet, and many have, but they do what they say on the tin and do it in a cheap, no-frills way. Their levels of service are sometimes better than pricier, more prestigious airlines. We've also seen it with Lidl and Aldi - sometimes giving customers a budget choice is very popular.

    Budget doesn't always mean naff. The implication that because a service is cheap, it stands to reason that it will be terrible. The 'you pay for what you get' line of thinking. While that's true to a degree, it's not always the case. You can pay over the odds for a service and it turns out to be worse.

    The same applies to estate agents. An agency charging high fees won't necessarily offer a fantastic, great-value-for-money service. Just look at Foxtons. Whereas a budget (by which I assume you mean online) agent might offer a fantastic service for a quarter of the price.

    There are good online agents and bad ones. There are good traditional agents and bad ones. I don't know why traditional agents find this so difficult to fathom. They obviously see online models as a threat to them, blithely dismissing their services as cheap, tacky and not as good as what you'd find on the high-street. Ignoring the fact that many online agents have come from a traditional agency background. Any tricks of the trade, good and bad, that they've picked up would have come from there. So online and traditional agents aren't as chalk and cheese as some would like to make out.

  • icon

    It is accepted practice,for the Government and councils when they buy to pay the sellers agents and solicitors fees.

    Fees are paid by the buyer in the case of property compulsory purchase,and in case of any chatels auction buyers premium of around 20% is applied.

    In cases of fine art commanding millions the seller will sometimes pay nothing.

    There is no such thing as free,a buyer paying £1000 to the selling agent will deduct this from the price they offer.Theytake into account stamp duty,legal fees,too.

    When the Government in a budget reduces taxes to one group,it has to increase taxes to another. Money does not grow on trees,and services have to be paid for.

    It is refreshing to see people accepting discounters,whether agents grocers,or modern web based businesses. Specsavers are a great example of efficient,and revolutionary business ,taking over from traditional opticians. It is happening in other industries.

    So a rise in stamp duty in the past caused sellers to reduce their offers. The same applies to sellers,they get an offer,and should think,after fees I will get £x in my hand. A seller charging buyer will still be working for the seller. Contribution to legal fees seems to becoming the case with some councils,water boards etc. The Cost of Leases Act was brought in to clarify tenants contribution to landlords legal fees.

    People taking a mortgage now are charged an admin fee,which has come in within the last 20 years. Times change,people have choices,but deposits generally,would improve the system,where buyers gazunder and drop out,causing stress to sellers,even in a rising property market we hear little of gazumping.

    I smile when I see "no commission " foreign money exchange,Sell at 1.5 to £1,buy at 20,so £10 gets you 15 euros/dollars whatever,trade the 15 back,and get £7.50. Let people be free,the seller receives less if buyer pays agent,so hopefully seller aware and happy by not paying agent so much..There seems to be naivety by the public in many areas,I agree with charging £10 plus for cigarettes,but stopping agents charging tenants letting fee will only increase rents.

  • Trevor Mealham

    @Algarve Investor:
    Yes god and bad in both online only and traditional office based agents.

    For me best agency is main agency where fee is high enough to allow subbing out.

    Sorry but budget agents do NOT have enough in the pot to sub out. As such they can NOT in my opinion give max exposure to gain best deal. FACT

  • icon
    • 08 June 2015 20:39 PM

    @Algarve Investor: Agreed, I'm becoming slightly fed-up with high-street agents acting as if they have one-up on online agents with regards to service, when in fact paying more for a service doesn't not ultimately mean that a better service is guaranteed. There are place for both in the market, which high-street agents seem unwilling to accept.

  • Simon Shinerock

    I think the reality is that we are generally more tolerant of established bad practice than we are of new ones, whether dubious or not. It would be a lot easier if the authorities were able to offer real help but they can't. Try asking the FCA if your new FS idea is compliant, they won't give you an answer but they will procecute you if you break the rules, go figure.


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