This 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 Guardian reports that 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 newspaper was contacted by a prospective client complaining that she had received 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.
The Guardian also claims that the document 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.”
The agent was approached by the paper and stressed that the fee is not a ‘pre-contract deposit’ as prohibited in The Property Ombudsman’s Code of Practice.
Elliot Lee has released a statement:
“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.”
The agency has 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 they had a ‘moral problem’ with buyers making excessive offers and then withdrawing at the last minute.