Introducers fees up front, is this normal

[geordie]

A mate in the uk has been enquired about an investment being marketed by an agent, but on registering his interest they have sent him an agreement to sign whereby he pays them an introducers fee of around a €6k flat fee (not a %) if he buys an investment through them. I have never seen this before because these types of agents are not independent and advertise investments on their websites, so they will be getting agency fees (aka introducer fees) from the developers for finding them clients. So it seems the agents are trying to get paid from both sides. Has anyone seen this before? Am I right or is this another con in the market? And how common is it?

The agents have normally added their slice and i'm sure they will still be getting a fee from the developer.

Any feedback gratefully accepted because I've never come across this before?

Thanks

Geordie

 

[Bnage]

This is not a con in my opinion. Some agencies or consultancies charge the investor instead of charging the developer. You will find that buying through someone with little or no fee's will be less secure than the other; especially where contracts are concerned (I mentioned this on another thread as I have experience of this problem) Also, if there is no fee, you will find the unit price go up.

I worked for a company once who charged a finders fee and they never, ever took money from the developer. Think about it; if they did they would then have some sort of link with the developer and and be more favorable toward him. Charging the client means you are obliged to be loyal towards your customer and ensure their investment is as safe as possible.

 

[geordie]

But they're still agents not just a property sourcing company and they're not independent, so where's the value? If you were paying for their independence to look for opportunities on your behalf then fair enough, but here they're just reacting to an enquiry on a specific project that they are already selling and will that they have a stake in; they're not just going to advertise developments for sale on the basis of taking introducer fee from potential investors. In my experience these companies always have an agency fee from the developer, which is agreed before they decide to sell the development because otherwise potential clients could go around them and direct to the developer. This way they just get sent back to the agent who has exclusivity to sell this development in the UK. Anyone else have any experience or comments on this?

 

[ringledman]

The rip off agents are generally the ones who ask for no fee because they've upped the price of the apartment by 20% or so.

I would only deal with an agent who charges a seperate fee and then tries to negotiate a discount with the developer based upon the number of clients that he can offer the developer.

Either way if you can't get access to the local property market prices, i.e. information written in the local language (not English adverts or websites!) then stay well clear of the investment. Budapest (agents and developers) is a classic places for ripping off foreigners with their double pricing.

 

[icecool]

A mate in the uk has been enquired about an investment being marketed by an agent, but on registering his interest they have sent him an agreement to sign whereby he pays them an intriducers fee of around a €6k flat fee (not a %) if he buys an investment through them. I have never seen this before because these types of agents are not independent and advertise investments on their websites, so they will be getting agency fees (aka introducer) fees from the developers for finding them clients. So it seems the agents are trying to get paid from both sides. Has anyone seen this before? Am I right is this another con in the market? And how common is it?

They agents have normally added their slice too. maybe they are trying to be transparent but they will still be getting a fee from the developer.

Any feedback gratefully accepted because I've never come across this before?

Thanks

Geordie

these type of fees are the norm.