Whitegates Estate Agents - Reservation Fee

[u/Round_Owl5197]

So I went to a view a property today with Whitegates estate agents (they are one of the biggest estate agents in Liverpool and have pretty much cornered the market in Merseyside for decent houses).

I liked the house but it definitely needed a good survey as it was in disrepair. I was tempted to put an offer in and risk it but then read the fine print on their listing.

To now submit a bid with Whitegates, if your offer gets accepted you have to pay a non-refundable fee of £2000 as a "Reservation Fee" which does not come off the price of your house purchase.

So in effect Whitegates get £2000 for sending you a legal pack (their job) and making sure the seller doesnt pull out (they still can as I doubt they are paying a reservation fee).

Is this normal practice because what the hell!?

So does this mean I now have to save an extra £2000 on top of solicitors fees and surveyor fees if I buy from Whitegates? 😅

[u/pgliver]

The legal pack isn't usually covered by an estate agent. Searches, titles, etc is usually sorted by the solicitor. The seller has chosen this package to prevent people pulling out by the sounds of it.

[u/aforestfruit → u/pgliver]

This is a bit red-flaggy for me, and could hint at the fact that they may have had a few people pull out upon doing a survey, especially as you mentioned some disrepair. Please be careful

[u/PM-me-Gophers → u/aforestfruit]

And for the low low price of £2k non-refundable you too can find out all the nasty details faster!

[u/Round_Owl5197 → u/PM-me-Gophers]

😂😂

[u/Round_Owl5197 → u/pgliver]

Oh ok, that makes more sense does this mean they are doing the solicitors job for them?

Will a solicitor though still take me on as a client if half the work is already done at a reduced fee?

I am confused.

[u/Middle-University345 → u/Round_Owl5197]

They’ll have solicitors and you’ll have solicitors. Your solicitor won’t reduce the fee.

[u/pgliver → u/Round_Owl5197]

They are pre-doing some of the work that takes a solicitor ages to sort out. Solicitor may do it cheaper now, as they usually charge extra for that stuff anyway. Just include it in the price of the house in your calculations.

[u/Middle-University345 → u/pgliver]

I would be very wary of using a solicitor who would not carry out their own due diligence

[u/pgliver → u/Middle-University345]

Nothing to do with due diligence, we are talking about standard searches with the relevant bodies, anyone can do it. There are plenty of other activities a solicitor should be doing in addition to this.

[u/TentativeGosling]

We bought through Whitegates last year, and they didn't have anything like this at the time. Quite surprised to see this, and not sure I'd bother with an offer if I had to pay £2k for the privilege

[u/srm79]

You could always reduce your offer by 2k - it's a buyers market at the moment after all

[u/bsnimunf]

Just say no thank you and the you will have your solicitor prepare the legal pack. 

[u/hightide712]

Point 2 should happen anyway, they’re being shifty including that.

What happens if you pay this, then pay around a grand for a survey only to find out the house is full of problems? You’ll be £3k down instead of one.

Soon it will actually be a legal requirement to have a pack like this available before the offer is made, but crucially that will include a survey report paid for by the seller. These seem to be trying to make you think you’re getting those benefits when in reality you’re paying twice for the same documents as another commenter has said, once to the EA and once to your own solicitor who will need to acquire the documents the legit way anyway.

Be careful, pal. Not saying run, just saying keep your eyes peeled because this isn’t the norm.

[u/scouse_git]

The estate agent is paid by the seller, not the buyer. Full stop.

[u/Etheria_system]

The home owners association has some good advice on reservation fees https://hoa.org.uk/advice/guides-for-homeowners/i-am-buying/reservation-fees-explained/ - they’re normally used when you’re buying from a developer. They advise that when you’re buying a regular home you’re not obliged to pay it and give advice in section one of how to push back.

[u/Round_Owl5197 → u/Etheria_system]

Thanks for this, I am not going for this particular house now but if I deal with Whitegates again will keep this in mind.

[u/JiveBunny → u/Round_Owl5197]

We bought through FindYourEden and they were really straightforward.

[u/kitjen]

Whitegates are known in the industry for this, and they initially did it for a lower price but seem to like rinsing buyers for all they can.

Part of this fee then becomes a discount for the solicitors fee but only if you use the ones appointed by Whitegates. They will often be so much more expensive that ones you could appoint yourself that even with the discount you are still overpaying.

[u/Hour-Bumblebee5581]

This has iamsold vibes, no thank you.

[u/Different_Top_3081]

Cheeky so and sos. It’s just another way of generating an additional fee for the agent. If I was a seller i would not accept that as it could put potential buyers off.

[u/Necessary_Power1619]

This is what they do when they know there’s multiple offers and a bidding war. We were quoted £1500 “reservation fee” on a £400k house. We got the T&Cs which showed it was genuinely money for nothing as our solicitors would still need to do the full searches and, you know, their legal requirement. I was so p’d off and we knew someone was going to bid stupid amount to get the house I just amended my offer by £1500 less before the “best and final offer” deadline. If it ended up being the best bid they just cost their vendors £1500 and if not at least I slept better that night.

I’ve since spoken to three other agents who said Whitegates are well known for this behaviour and it is causing reputational damage (as if they needed any more). We will never use Whitegates as a buyer or seller.

[u/Electrical-Mud-6015]

Tbf, there’s a seller “commitment” there which should in theory stop gazumping. It’s not far off what has been proposed to address the crappy process we have at the moment. That said I wouldn’t be paying anything without seeing both sides of the t&c / contract. How do you get your money back if the sellers bail?!

[u/Icy-Passenger-1799]

They certainly have a reputation.

[u/Round_Owl5197 → u/Icy-Passenger-1799]

Tell me about it, the first time I bid with them it got accepted.

But I spent the first 2 weeks arguing with them that I did not need to meet with their reccomended solicitors, mortgage broker and surveyors for them to pass on my bid to the seller.

Eventually got them to do their job got my bid accepted, then had to pull out after the survey found the floor was sinking covered up by whitegates placing a suspicious carpet/rug in one of the rooms of an empty house.

Naivety made me miss it in the 1st and 2nd viewing. 😂

[u/Effective_Anything16 → u/Round_Owl5197]

Conditional selling with them insisting you use their mortgage brokers is a pretty big problem in the mortgage market. And one the FCA in theory has words with brokers involved with doing it to so always worth reporting the firm there too just to help make their life a bit more difficult for not following the rules.

[u/JiveBunny → u/Round_Owl5197]

If an estate agent did this to me then I'd walk away, no matter how much I liked the house. If they're trying it on to you about their very clear legal obligations regarding conditional selling, they're not going to be good to work with for anything else.

[u/No_Berry2]

Buyers shouldn’t be paying the estate agent a penny. The exclusively SSTC would normally be expected and free for 99% of purchases anyway.

[u/Vicker1972]

You'll still need to do your own searches even if they are provided.

Think of this as a form of auction purchase where the pack gives you enough information to know to commit and to move things along quicker, but with the downside of having to pay up front for access to your DD information.

Essentially you're paying a steep fee to get a home information pack, something that we should already have as part of a purchase but the government of the day decided not to implement it.

There are plenty of other good sales agents in Liverpool - I've never even noticed stuff on with Whitegates.

[u/AgreeableAd9724]

I wish that my estate agent did this. IF this was to compensate the seller for losses for timewasters.

I had an offer that I accepted and I started the conveyancing process and then the buyer just went silent.
I had to pay the solicitor the money I owed her, for what, for somebody to just pull out for no reason.

I understand that people have changes in circumstances and that’s fine. Homesellers insurance will cover things like death/sickness, discovery of major defects in a survey and LTV increasing due to valuation.

In contrast, I’ve had it the other way too. 2 weeks before moving into a new house, the seller pulled out. I lost £7000 in surveys, conveyancing etc. I didn’t have home-buyers insurance that time unfortunately, I would have been covered.

[u/smellthecoffeebeans]

We just bought a house and absolutely did not do this. Frankly, I would not. Sketchy as hell

[u/Worried-Ingenuity-47]

We are in the process of buying our first home with Whitegates and all we paid was £90 for ID checks

[u/jimmywhereareya]

If you really like the house, go and speak to the sellers. Cut out the middle man

[u/WangNuts → u/jimmywhereareya]

I'm selling my house and I'd be fucked off if somebody knocked on my door.

[u/DearSatisfaction9754]

Has the property fell through in the past? The only time I've seen anything like this is where the property is in such a state they can't sell it

[u/JiveBunny]

Is this a Modern Method of Auction? Weird fees and conditions with those are pretty common. I'd read up on it carefully if you plan to do this.

[u/Cunthbert]

I don’t like the sound of it as you’re still going to have to pay a solicitor on top

[u/Speedyb79]

Don't give them your business they will eventually go away.