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.

Key Takeaways:

  • 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.”

Read more: https://www.estateagenttoday.co.uk/breaking-news/2019/10/reservation-agreements-agency-charges-buyers-5-000-plus–and-it-works

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Gavin Brazg

Gavin Brazg

MSc Dip Arch

Founder & CEO

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