What is McEwan Fraser Legals Buyer's Premium?
The Buyer’s Premium is an innovative and popular way McEwan Fraser Legal use to sell a small selection of our advertised properties. Our objective is to save our vendors from having to pay any Estate Agency commissions and/or incur any of the upfront outlays involved in putting a property on the market such as Home Reports, ESPC, Professional photography and schedule costs. This is a very similar way to how ‘off market’ and ‘auction properties’ are commonly sold in the UK and in other countries. The Buyer’s Premium is a very attractive proposition for banks and institutional investors to dispose of distressed assets and indeed private sellers to allow them to test the market without incurring any upfront selling costs or sales commissions. The Buyer’s Premium also greatly helps sellers who might be in negative equity or have little equity in their property. The Buyers Premium initiative helps bring more properties to market.
Does McEwan Fraser Legal seek a double commission payment from the seller and buyer?
Absolutely not, there is no commission paid by the seller if the buyer pays a Buyer’s Premium which is normally equivalent to our standard sales commission but can vary from property to property depending on our sellers particular circumstances.
What happens if a buyer is unwilling to pay a Buyer’s Premium ?
If a buyer is unwilling to pay the Buyer’s Premium or believes the premium is not justified on any particular property, then a buyer should make their best offer on the property. Our sellers will always be motivated to accept the highest offer irrespective if you include the Buyer's Premium in your offer. This is no different to how many buyers view the recent changes in LBTT and the ADS (Additional Dwelling Supplement) which all add additional costs on the purchase of a property. Buyers should simply adjust their offers to take into account these additional costs.
If I don’t include the Buyer's Premium in my offer does that mean I won’t get the property?
Absolutely not, as already stated the highest net offer will normally always secure the property.
Why have you introduced the Buyer's Premium?
McEwan Fraser Legal are always looking for new innovative ways to help our sellers reduce the cost of selling a property and a small number of clients like the option to sell without outlays or sales commissions- who wouldn’t !
Does the Buyer's Premium properties attract higher offers?
We are selective on which properties will qualify for a Buyer’s Premium. We try and restrict the Buyers Premiums to our premium or our most popular properties, where we believe there will be considerable demand from motivated buyers. Our stats prove that many Buyer's Premium properties are attracting offers well in excess of the Home Report value.
I hear some people don’t like the Buyer’s Premium?
The world of buying and selling property is rapidly changing. Many people are resistant to change or sceptical to new ways to buy and sell property, often because they don’t understand or are unfamiliar with the new process, however being resistant to change does not help innovation. There is clearly a demand for the buyer's premium from a small number of our clients, and we aim to meet that demand. We also believe the Buyer’s Premium has encouraged more sellers to bring their properties to the market, where they would have otherwise been put off with the high costs of buying and selling properties, particularly with the introduction of the Additional Dwelling Supplement, which applies on your next home purchase if your existing home remains unsold.
Please note McEwan Fraser Legal when selling properties represent our sellers best intrest not the buyers.
How do I make an offer for a Buyer’s Premium?
Buyers who are inexperienced in making offers for properties with a ‘Buyer’s Premium’ can speak to one of our members of staff in our property department or should speak to their own solicitor before making any offers. Your solicitor should advise you on what you should offer in exactly the same way as they would do for any other property.
What are the Implications for LBTT on Buyer’s Premium?
Our understanding is the HMRC calculate the total consideration a buyer pays for a property, which would include the Buyer’s Premium.
What are other advantages for sellers using a Buyer’s Premium?
On commission based sales models sellers don’t know their final costs until the property goes under offer. With the Buyer’s Premium model sellers don’t have to worry or concern themselves with selling costs and is much easier for sellers budgeting.
Why don’t other agents use Buyer’s Premium?
Probably because they don’t really understand it and don’t like change. Many agents tend to stick to what they know.
It was unheard of a few years ago for agents to change to a fixed fee to sell property, but many agents who were slow to change have now changed their models.
Does the Buyer’s Premium not put buyers off viewing the property?
Good Question – There is no evidence from our stats that the Buyer’s Premium puts off buyers. If the property is correctly priced and in good demand, buyers will always be attracted to good quality properties. Only a small selection of our properties will qualify for our Buyer’s Premium initiative.
I heard you can charge up to £10,000 for Buyer's Premium?
We do also offer a Buyer's Premium on selected commercial properties which attracts a higher Buyer's Premium. We did have a commercial property which was valued at £700,000 and attracted an all-inclusive buyer’s premium fee of £10,000, which effectively relates to a commission of 1.2% + VAT. Typically, Buyer's Premium on residential properties ranges from £1500-£3000 depending upon what our sellers want to pass onto the buyer.