Reservation Agreements: Agency asks buyers for £5,000 – and it works
There is a real estate agency located in London that recently spoke to Estate Agent today, revealing that it requires many of its clients to pay £5,000 upfront in reservation agreement fees. Since MHCLG research has found that buyers currently back out of deals at approximately 25%-35%, the agency hopes that this percentage will end up dropping overtime if the downpayment acts as more of an incentive to keep going through with the investment process.
- Rumor has it that one London Estate Agency is having its buyers pay five thousand pounds, or more, in reservation agreement.
- With the UK government amping up to possibly begin a similar scheme, the agency simply decided to get ahead of the curve.
- The New Year may find two pilot regions of the UK placed in the position of having to pay from five hundred to one thousand pounds of non-returnable reservation agreement money.
““The benefits of Reservation Agreements are lower fall-through rates. On average fall through rates in the market sit around 30 per cent. For us, they are a lot lower. In Q2 this year, they were 18 per cent” he adds.”