# Real Estate - "reserve" hold



## Char_Forster (May 10, 2017)

Hello, 

I was interested in a property in Catalonia, when I spoke with the agent about the listing I was told that the property was now on "reserve" for another buyer. The agent explained that the seller and the buyer would now have a month to negotiate a price. 

The agent explained that this was not the same as under contract/sale agreed or offer accepted. Just reserved and that the property would remain live on their website in case the two parties did not come to terms. 

I asked if it was possible to view the property in the mean time and perhaps submit an offer (not a reserve hold, but an actual offer). The agent said no, the reserve meant that no more viewings would take place. 

I was surprised by this step in the buying process, thinking that it was more of a submit an offer, which would either be accepted or countered. And once price agreed, a deposit would be paid and the house would be off the market. 

If I was a seller, I would certainly want the opportunity to review all offers up until an one was agreed (not in the guzumping since as in the UK). Or at least know that there are other parties interested which might give me more bargaining power when negotiating with the reserve holding party. 

Is my experience here normal? Would an agent prefer not to introduce anything to a potential sale in progress, thinking it might blow the whole deal, even though it may end up being beneficial to the owner? (nothing like two buyers wanting the same property.....everyones dream). Would the agent be bound to inform the owner that others are inquiring and would like to see the property? 

Am I misunderstanding the process? Is an offer only written for a final agreed amount, meaning that by the time it is written, it will automatically be agreed? 

Or is it that the property was not for sale in the first place? I have since received several other details from the agent, but non have been in the same price/quality range of the property I originally inquired about. Which feels a bit like bait and switch. 

Thank you.


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## Horlics (Sep 27, 2011)

Your experience is not normal (well, not where I am).

Try and contact the owner directly.


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## Overandout (Nov 10, 2012)

With the big agents, this is totally normal.
The conditions of the contract that the agent signs with the seller and the potential buyer is such that the potential buyer pays a "fee" at the time of making a binding offer.

In our case we paid 3,000€ to make our offer. The agents insist on this fee to ensure that the buyer is aware that that the offer is binding and if he backs out, he loses the fee. This is good for both the agent and the seller as it guarantees the binding nature of the offer.

Once the fee is paid and offer made, the agent (in consideration of the fee) will not allow any other ofer to be made or to show the proporty to any other potential buyer. The potential buyer now has an "exclusive" relationship and if free to increase his offer and negotiate to see if an agreement can be reached.

In our case, the day after we paid our fee and made our offer, another buyer wanted to affer more money, but e couldn't due to the agancy contract.

This is perfectly legal and, in my opinion a good idea, unless of course you are the second potential buyer and you find your way blocked by it!

In our case, our first offer was refused by the seller, but our second offer was accepted and the other buyers didn't even get to make an offer. The "fee" is deducted from the price, so as long as you don0t back out, you don't pay any extra.


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## Pazcat (Mar 24, 2010)

Technically once an offer is accepted, even verbally the contract has been made so really it is all smoke and mirrors by the agent to get another piece of the pie. It may be legal to a point but you really do need to be careful what an agent makes you sign.

As a buyer you really should not be paying anything to an agent, that said it's their listing and you can't really make them change the way they do business so I would either look for the same house listed via another agent or even the seller or simply move on to another property and don't deal with said agent again.


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## Isobella (Oct 16, 2014)

Char_Forster said:


> Hello,
> 
> I was interested in a property in Catalonia, when I spoke with the agent about the listing I was told that the property was now on "reserve" for another buyer. The agent explained that the seller and the buyer would now have a month to negotiate a price.
> 
> ...


IT sounds unusual although don't know the practices in that area. I would be inclined to go with your last paragraph. Some Agents advertise properties they are not authorised to sell just to boost their portfolio and attract clients. 
One house we sold I spotted in an estate agents window over a year later!


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## snikpoh (Nov 19, 2007)

Normally, this reserve 'deposit' is to take the property off the market whilst documents and legalities are checked. 

It can even be to hold the property whilst the owner and potential buyer discuss exact offers.


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## Char_Forster (May 10, 2017)

Overandout said:


> With the big agents, this is totally normal.
> The conditions of the contract that the agent signs with the seller and the potential buyer is such that the potential buyer pays a "fee" at the time of making a binding offer.
> 
> In our case we paid 3,000€ to make our offer. The agents insist on this fee to ensure that the buyer is aware that that the offer is binding and if he backs out, he loses the fee. This is good for both the agent and the seller as it guarantees the binding nature of the offer.
> ...



Thank you for this, I understand a bit more now. I suppose if the owner knows they will be creating an 'exclusive' by accepting the reserve concept, then thats the end of it. Can understand why agencies do this, stops people making multiple offers on various properties and would also stop other agencies bringing in buyers while they are actively working a transaction. 

Property had been on the market for a while, I am just late to the party.....bad luck and sods law......

So with this new bit of knowledge, I am off to find the next perfect property....


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## baldilocks (Mar 7, 2010)

If, after the buyer pays the holding fee signifying intent, she/he pulls out the holding fee may be lost, however, if the seller pulls out then double the fee is required from the seller, likewise with the formal deposit..


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## Horlics (Sep 27, 2011)

Overandout said:


> With the big agents, this is totally normal.
> The conditions of the contract that the agent signs with the seller and the potential buyer is such that the potential buyer pays a "fee" at the time of making a binding offer.
> 
> In our case we paid 3,000€ to make our offer. The agents insist on this fee to ensure that the buyer is aware that that the offer is binding and if he backs out, he loses the fee. This is good for both the agent and the seller as it guarantees the binding nature of the offer.
> ...


You say it is totally normal and then go on to describe something completely different than what the OP is facing.

What you describe, i.e. buyer paying a fee when making a binding offer is exactly what happened to me, and is what I regard as normal.

According to the Op the vendor and "buyer" haven't agreed a fee and now have a month to do so, during which no offers from others will be put forward. That is as far from normal as it gets.


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## baldilocks (Mar 7, 2010)

Horlics said:


> You say it is totally normal and then go on to describe something completely different than what the OP is facing.
> 
> What you describe, i.e. buyer paying a fee when making a binding offer is exactly what happened to me, and is what I regard as normal.
> 
> According to the Op the vendor and "buyer" haven't agreed a fee and now have a month to do so, during which no offers from others will be put forward. That is as far from normal as it gets.


It is exactly what we did ten years ago. Put down €1k just to give us a short breathing space while we decided what we could afford; offered 2k less than the asking price which was then accepted. Since they were in no hurry to move out (they were having a new place built) we paid the balance in lump sums over the following 12 months, after which the sellers moved into the house next door on a temporary basis while their new place was finished and we moved in.


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## snikpoh (Nov 19, 2007)

baldilocks said:


> If, after the buyer pays the holding fee signifying intent, she/he pulls out the holding fee may be lost, however, if the seller pulls out then double the fee is required from the seller, likewise with the formal deposit..


I think you may be confusing "holding fee" and "deposit".


Certainly a deposit is not returnable as you describe.

The 'holding fee' is completely different.


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## Horlics (Sep 27, 2011)

I'm trying (without success) to see the upside for the seller.

"Hello seller, agent here, there's a bloke who wants to buy your place so we've told him we can take a small deposit while the two of you agree on a price, ok?"

"Hello agent, very interesting, it's up for 200k, what's he thinking of?"

"Well, he hasn't actually said, he's indicated that he thinks he can come to an agreement with you, so we'll get a deposit and the two of you can chat"

"Look my dear agent, it all sounds a dick-around-ish to me. Just ask him what he wants to offer will you?"

"Well we did, but he hasn't said and he would rather take a month to discuss it"

"It's a one minute conversation"

"But seller, we think it's a great idea for you to waste a month during which we'll turn away all other interested parties, don't you?"

"No. Even in the UK where an agency does checks and asks to see evidence that a buyer is able to fund a purchase, which isn't done here, I would not think this is a good idea. So p**s off, I'll get myself another agent."

Or am I missing something?


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## Char_Forster (May 10, 2017)

Horlics said:


> I'm trying (without success) to see the upside for the seller.
> 
> "Hello seller, agent here, there's a bloke who wants to buy your place so we've told him we can take a small deposit while the two of you agree on a price, ok?"
> 
> ...



Can completely see your point, it isn't the best thing for the seller if they suddenly have a lot of interest in their property.

But it is a useful tool for the buyer if there is a reason to have a delay......in my own case, I may look at the property, love it, and then need to arrange a second viewing with my husband. Which may take a week or two to arrange his diary. 

In this case, it seems that it is just bad luck on my part and on the sellers. They've been waiting a long time for any buyers, so probably didn't think the "reserve" idea really mattered. And for me, it has just been a annoying, but I may find myself wanting to use such a process when I find that perfect place. 

Thank you for all the help here, it has given me more to think about.


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