Property Sourcing Fees: What to Charge and How to Disclose Them

Two questions come up early for a new sourcer: what should I charge, and how do I take the money without falling foul of the rules? The two are inseparable. A well-priced fee with sloppy disclosure is a redress complaint waiting to happen; a compliant fee priced too low keeps the business unsustainable. This guide covers both halves.

How to set your fee

Work your fee out from your own numbers rather than from what other sourcers say they charge:

1. Your cost to run compliantly. Registrations, insurance, software, marketing and your time. Our compliance checklist puts the registrations alone at around £1,020 to £1,215 in the first year (single premises, one approved person, including VAT on the redress fee), from the HMRC (opens in a new tab), Property Redress (opens in a new tab), TPO (opens in a new tab) and ICO (opens in a new tab) published fees.
2. The deals you will actually complete. Spread your costs, and the income you need, over a realistic number of completed deals, not the number you hope to reserve. Deals that fall through still cost you time.
3. The value to the investor. What the deal saves or earns them compared with finding it themselves: the discount you negotiated, the work and evidence in the pack, and the return the numbers show.
4. The work the deal takes. An HMO conversion, serviced accommodation or heavy refurbishment needs more sourcing and diligence than a straightforward buy-to-let.
5. What investors in your area will accept. Ask the investors you work with and other sourcers; check it against your own figures, not the other way round.

A fee too thin to cover your costs and the deals that fall through makes corner-cutting tempting, and corners here are legal obligations.

Fee models

Whichever model you use, the investor-facing rule is the same: one number, stated early, included in the cash-required figure of the deal, as covered in how to present a deal to investors.

When the fee is charged

You can tie the fee to one or more of three points:

• Reservation: a payment, either a fixed sum or part of the fee, to take the deal off the market while the investor completes initial due diligence
• Exchange of contracts: the deal is now legally committed, so it is a natural point for the balance
• Completion: the friendliest point for the investor, but it exposes you to months of work that dies with a failed completion

One structure is a reservation payment on agreement with the balance on exchange. What matters legally is not which structure you pick but that the trigger points are unambiguous in writing before any money moves.

Refunds: decide each case in advance

Refund terms are where vague wording turns into a dispute. Decide what happens in each case and put it in your terms. A fair starting point:

• Deal falls through because of the sourcer or seller (misdescribed deal, vendor withdraws, legal defect): refund the fee or reservation in full
• Investor withdraws without cause: you may keep the reservation, but only if your terms said so up front
• Survey or valuation reveals a material problem: refund, since the deal was not as presented
• Finance falls through: negotiable territory; agree it in advance rather than argue it afterwards

If an investor complains, your redress scheme looks at the terms they actually agreed to before paying. Terms that were unclear, one-sided or produced after the payment are hard to defend, and a term that only appears once a dispute starts is worth very little.

Your disclosure obligations

Fee disclosure for sourcers is not a courtesy; it is a stack of overlapping legal duties:

• Estate Agents Act 1979: if your work is estate agency work, your fee, when it becomes payable and any other payments must reach your client in writing before they are committed, with the amount or how it is calculated (section 18 (opens in a new tab) and the Estate Agents (Provision of Information) Regulations 1991 (opens in a new tab))
• DMCC Act 2024: since 6 April 2025, a listing or pack that gives a consumer a property and its price must include, among other things, its main characteristics, the total price, who you are and anyone you act for, your business address and any business email address, unless it is already apparent from the context, and leaving out information that must be there is unfair whatever its effect on the decision (section 230 (opens in a new tab)). The total price includes any fees the consumer will necessarily incur; whether your sourcing fee forms part of it is a question for a solicitor. Other misleading omissions (opens in a new tab) are unfair where they are likely to change the average consumer's decision. The CMA enforces these rules
• Redress scheme rules: estate agency work on residential property requires membership of an approved redress scheme (opens in a new tab), Property Redress or The Property Ombudsman, and the scheme decides your clients' complaints, including complaints about fees
• Consumer contract rules: where you contract with consumers at a distance or off premises, the Consumer Contracts Regulations 2013 (opens in a new tab) set information requirements and, in many cases, a right to cancel

The full set of registrations behind these duties, HMRC AML supervision included, is in our deal sourcing compliance checklist.

Reservation-fee hygiene

Reservation money is where good sourcers get into avoidable trouble. The hygiene rules:

1. Client account, not cashflow. Money held on behalf of a client is not yours until the trigger point in your terms is reached. If it is a deposit paid as a sign of the investor's intention to buy, the Estate Agents Act 1979 treats it as clients' money (opens in a new tab) that must be paid into a client account (opens in a new tab) without delay. Where your reservation is part of your fee instead, keeping it separate until it is earned is still the safe practice
2. Terms before transfer. The investor has the written agreement, including refund terms, before they send a penny
3. Receipt and status. Confirm receipt in writing and state what the money is: refundable reservation, part-fee, or deposit
4. No spending against unexchanged deals. If the deal dies pre-exchange in circumstances your terms say are refundable, the money must still exist to refund
5. Prompt refunds. When a refund is due, pay it quickly. Slow refunds convert unhappy investors into redress complaints and public reviews

Putting it together

Price for the value of a genuinely packaged deal: sourced, analysed, evidenced and presented so an investor can decide quickly. That standard of packaging is what justifies a higher fee, and it is the same standard the law now demands anyway. A deal pack built to the full template, with the fee on the first page, is simultaneously your best sales asset and your best compliance evidence. If you send packs regularly, building each one from the same template is what deal packaging software is for, and it keeps the fee in the same place on every deal.