An agency has repaid a £6,000 reservation fee to someone who thought they had purchased a property for £83,000 but was later told they must pay £100,000.

The Sunday Times reports a case where a reader made what they believed to be a successful bid of £83,000 for a property in Newport, south Wales, in an online auction held by Pattinson.

At the time of the auction they paid a £4,150 deposit and the £6,000 reservation fee.

But when they later tried to visit the property they could not, and told the paper: “My solicitor subsequently confirmed that the house had been repossessed … by the bank that had provided the mortgage for the previous owner.”

The buyer was told the purchase could only go ahead if they paid the bank’s valuation of £100,000; the buyer could not afford the higher cost but received back only £3,685 – the deposit minus legal fees.

The £6,000 reservation fee was kept by Pattinson at the time, as the firm had said from the outset that the fee was non-returnable.

The buyer concludes in its comments to the paper: “I think it is highly unethical for an auctioneer to list properties under a repossession order without disclosing this to potential buyers.”

The newspaper’s personal finance section pursued the case and obtained guidance from the Royal Institution of Chartered Surveyors that all relevant documents relating to a property should be available for inspection – online, at the agent’s and auctioneer’s office or at the seller’s solicitor.

The buyer claims to have previously been sent a pack containing a draft contract, the property information form and other documents – but none that raised concern with their solicitor.

“RICS found no evidence of misconduct by Pattinson” says the newspaper; nontheless, the paper asked Pattinson to refund the reservation fee – which it has now done.

The newspaper goes on to say that the company apologised for having failed to respond to the buyer’s recent queries. “It said it had been in an ‘unfortunate position’ as ‘the repossession after the sale had been agreed was completely out of our hands’.”