Agents

How to deal with British property agents

There are three main types of property agents in the UK; estate agents, solicitor agents (Scotland) and relocation agents. There are also letting agents, who find tenants and manage properties.

Agents

Most property is bought and sold through estate agents, who sell property on commission for owners. In Scotland, most property sales are handled by solicitor agents, whose property centres provide a one-stop shop for buying, selling and conveyancing.

Property sold by estate agents and solicitor agents is said to be sold by private treaty, a method of selling a property by agreement between the vendor and the purchaser, either directly or through an estate agent.

Estate Agents

Although there are nation-wide chains of estate agents in the UK, most agents are local and don’t have a nation-wide listing of properties in other regions. There’s no multiple-listing system and agents jealously guard their list of properties from competitors.

If you wish to find an agent selling property in a particular town or area, look under estate agents in the local yellow pages or consult the local newspapers or the internet. Many estate agents produce free newspapers and magazines containing details of both old and new houses, and colour prospectuses for new developments. Some estate agents are also letting and management agents.

Using the Internet

You can search for an estate agent on the internet; most agents now have websites where you can sort properties by location, price, type (e.g. a house or apartment) and the number of bedrooms. It’s particularly useful when you’re looking for a property in a different area from where you currently live and allows you to peruse property lists at your leisure. Some agents offer virtual viewing, whereby you can take a guided tour around a property via your computer. Many websites aren’t dedicated to a single agent, but allow you to search for homes and agents throughout the UK, e.g. by location and price.

Avoiding the Crooks

Estate agents in the UK don’t need to be licensed, qualified, trained or have any experience (similar to politicians), and aren’t required to be members of any professional organisations (although most are – see below). Estate agents have a terrible public image (it’s the occupation that dare not speak its name!) and in recent years their reputation has sunk to an all-time low. (It must be said that agents have a much better reputation in Scotland, where the law regarding buying property is different and gazumping is unknown.)

There’s open warfare between agents in some areas with evidence of sabotage, dirty tricks and rip-offs, with some agents hiring thugs to tear down rivals’ ‘For Sale’ boards. There’s very little control over estate agents, some of whom deliberately force up prices, misrepresent properties or have an undisclosed personal financial interest in a property (not surprisingly they earn over £2.5 billion a year from residential property alone). Other shady or illegal practices include:

  • Accepting money from a prospective buyer to ‘ring-fence’ a property, i.e. not passing on further offers or rejecting higher bids, while at the same time taking legitimate fees from sellers. This is more likely to happen when the vendor is elderly and absent, e.g. living abroad or in a hospital or nursing home (it’s allegedly widespread in London).
  • ‘Selling on’, where an agent undervalues your home and sells it at a knock-down price to a friend, who makes a fat profit from a quick resale and splits the profit with the agent. You should be informed in writing if your estate agent or a relative or business partner of the estate agent wants to buy your property.
  • Under-marketing or holding back undervalued or repossessed houses, and tipping off property developers or speculators in return for a bribe.
  • Taking a bribe from a developer to reveal the highest bid in a sealed-bid sale (the developer then bids slightly more).
  • Discouraging higher offers (particularly if the lower offer is funded by a mortgage through the agent) or keeping the price low by telling buyers how much to offer.
  • Lying to buyers about other offers on the table in order to bump up bids.
  • Fly-boarding, i.e. putting ‘For Sale’ signs outside homes that aren’t on the market.
  • Providing misleading publicity about the ownership, history and associations of a property in order to push up the value.
  • Coercing sellers into signing restrictive ‘sole agency’ or ‘sole seller’ agreements (this practice is widespread).
  • Pushing insurance and mortgage (sometimes promising to put you on the ‘priority’ list) to cash in on big commissions or channel business through an agent’s own financial services division.

In the light of the above catalogue of dirty tricks, it’s surprising that the ombudsman for estate agents received less than 5,500 complaints in 2003 (most people consider it a waste of time)!

Tip: It’s advisable to use more than one agent when selling in order to avoid dirty tricks.

Tied Agents

Some estate agents are owned by banks and other financial institutions, and offer only the financial products of their owners, which means that you don’t receive independent financial advice and are unlikely to obtain the best mortgage or insurance deal from them.

You may receive a better service from the owner-proprietor of a long-established family business than from one of the large chains. Many estate agents offer an in-house conveyancing service, although you may be better off with an independent solicitor or conveyancer, as an agent’s services could easily lead to conflicts of interest. You’re generally better off obtaining a mortgage or buying insurance through an independent broker or a direct insurer (e.g. telephone or internet), than from an estate agent.

Relocation Agents

If you know what sort of property you want, how much you wish to pay and where you want to buy, but don’t have the time to spend looking (or you live in another region or overseas), you can engage a relocation agent (also called home search consultants or buying agents) to find a home for you. This can save you considerable time, trouble and money, particularly if you have special or unusual requirements.

Many relocation consultants act as buying agents, particularly for overseas buyers, and claim they can negotiate a better deal than private buyers (which could easily save you the cost of their fees). Some specialise in finding exceptional residences costing upwards of £500,000 (or an average house in London).

Relocation agents can usually help and advise with all aspects of house purchase and may conduct negotiations on your behalf, organise finance (including bridging loans), arrange surveys and insurance, and even organise your removal. Most agents can also provide a comprehensive information package for a chosen area including information about employment prospects, health services (e.g. doctors and hospitals), local schools (state and private), shopping facilities, public transport, amenities and services, sports and social facilities, and communications.

Agents generally charge a fee of 1 to 1.5 per cent of the purchase price (or up to 2 per cent in London) and an up-front ‘retainer’ of between £500 to £2,500 typically covering a six-month search period. The retainer is deducted from the fee when a property
is purchased but if you don’t go through with the purchase it’s usually non-refundable. To find a relocation agent contact the Association of Relocation Professionals (ARP) or look in the yellow pages under ‘Relocation Agents’.

Solicitor Agents

In Scotland, in addition to the usual estate agents, there are also solicitor agents, who are solicitors who also sell property. A solicitor agent isn’t tied to any financial institution and is obliged to provide genuine independent financial advice. There are far fewer complaints against agents in Scotland, where the whole process of property buying is quicker and cheaper than in the rest of the UK.

Property Descriptions

Most agents provide detailed descriptions of properties, although they may be a bit short on photographs. Generally, the more expensive a property is, the better and more comprehensive the information provided (agents may produce glossy colour brochures for expensive properties).

Agents aren’t permitted to over-elaborate on property descriptions under the Property Misdescriptions Act 1991, before which a garden shed could be (and frequently was) described as a palace in ‘agent-speak’. Even so there are many coded terms in agent-speak, such as ‘individual’ or ‘unique’ (which usually means that nobody else likes it), ‘in need of modernisation’ (needs a massive amount of work), ‘study/bedroom 4’ (a tiny box room), ‘cosy’ or ‘compact’ (tiny), bijou (microscopic), individual (quirky, strange), pleasant (boring), well presented (has had a quick paint job), and so on.

When property is advertised the number of bedrooms and bathrooms is always given and possibly other rooms such as a dining room, lounge (living/sitting room), study, breakfast room, drawing room, library, playroom, utility, pantry, cloakroom, cellar and conservatory. More expensive properties often simply list the number of reception rooms (e.g. lounge, dining room, study, drawing room, etc.). The total living area in square feet or square metres is almost never stated in advertisements or information sheets, although room sizes (in feet and inches) are included (always measure them to be sure).

Professional Organisations

If possible, always deal with an estate agent who’s a member of a professional organisation, such as the National Association of Estate Agents (NAEA, Tel. 01926-496800, www.naea.co.uk ). You should also check whether an agent is a member of the Ombudsman for Estate Agents (OEA) scheme (Tel. 01722-333306, www.oea.co.uk ), whose members (usually indicated by a sticker on an agent’s window) must abide by a code of practice and to whom you can complain if you have a problem. The ombudsman can levy fines of up to £25,000, which may explain why only some 40 per cent of agents are members!

An Office of Fair Trading (OFT) investigation into the industry recommended (in 2004) that a voluntary code of conduct be introduced, although industry observers called the report a ‘damp squib’ so don’t expect it to deter the crooks.

Most property is bought and sold through estate agents, who sell property on commission for owners. In Scotland, most property sales are handled by solicitor agents, whose property centres provide a one-stop shop for buying, selling and conveyancing.

Property sold by estate agents and solicitor agents is said to be sold by private treaty, a method of selling a property by agreement between the vendor and the purchaser, either directly or through an estate agent.

Estate Agents

Although there are nation-wide chains of estate agents in the UK, most agents are local and don’t have a nation-wide listing of properties in other regions. There’s no multiple-listing system and agents jealously guard their list of properties from competitors.

If you wish to find an agent selling property in a particular town or area, look under estate agents in the local yellow pages or consult the local newspapers or the internet. Many estate agents produce free newspapers and magazines containing details of both old and new houses, and colour prospectuses for new developments. Some estate agents are also letting and management agents.

Using the Internet

You can search for an estate agent on the internet; most agents now have websites where you can sort properties by location, price, type (e.g. a house or apartment) and the number of bedrooms. It’s particularly useful when you’re looking for a property in a different area from where you currently live and allows you to peruse property lists at your leisure. Some agents offer virtual viewing, whereby you can take a guided tour around a property via your computer. Many websites aren’t dedicated to a single agent, but allow you to search for homes and agents throughout the UK, e.g. by location and price.

Avoiding the Crooks

Estate agents in the UK don’t need to be licensed, qualified, trained or have any experience (similar to politicians), and aren’t required to be members of any professional organisations (although most are – see below). Estate agents have a terrible public image (it’s the occupation that dare not speak its name!) and in recent years their reputation has sunk to an all-time low. (It must be said that agents have a much better reputation in Scotland, where the law regarding buying property is different and gazumping is unknown.)

There’s open warfare between agents in some areas with evidence of sabotage, dirty tricks and rip-offs, with some agents hiring thugs to tear down rivals’ ‘For Sale’ boards. There’s very little control over estate agents, some of whom deliberately force up prices, misrepresent properties or have an undisclosed personal financial interest in a property (not surprisingly they earn over £2.5 billion a year from residential property alone). Other shady or illegal practices include:

  • Accepting money from a prospective buyer to ‘ring-fence’ a property, i.e. not passing on further offers or rejecting higher bids, while at the same time taking legitimate fees from sellers. This is more likely to happen when the vendor is elderly and absent, e.g. living abroad or in a hospital or nursing home (it’s allegedly widespread in London).
  • ‘Selling on’, where an agent undervalues your home and sells it at a knock-down price to a friend, who makes a fat profit from a quick resale and splits the profit with the agent. You should be informed in writing if your estate agent or a relative or business partner of the estate agent wants to buy your property.
  • Under-marketing or holding back undervalued or repossessed houses, and tipping off property developers or speculators in return for a bribe.
  • Taking a bribe from a developer to reveal the highest bid in a sealed-bid sale (the developer then bids slightly more).
  • Discouraging higher offers (particularly if the lower offer is funded by a mortgage through the agent) or keeping the price low by telling buyers how much to offer.
  • Lying to buyers about other offers on the table in order to bump up bids.
  • Fly-boarding, i.e. putting ‘For Sale’ signs outside homes that aren’t on the market.
  • Providing misleading publicity about the ownership, history and associations of a property in order to push up the value.
  • Coercing sellers into signing restrictive ‘sole agency’ or ‘sole seller’ agreements (this practice is widespread).
  • Pushing insurance and mortgage (sometimes promising to put you on the ‘priority’ list) to cash in on big commissions or channel business through an agent’s own financial services division.

In the light of the above catalogue of dirty tricks, it’s surprising that the ombudsman for estate agents received less than 5,500 complaints in 2003 (most people consider it a waste of time)!

Tip: It’s advisable to use more than one agent when selling in order to avoid dirty tricks.

Tied Agents

Some estate agents are owned by banks and other financial institutions, and offer only the financial products of their owners, which means that you don’t receive independent financial advice and are unlikely to obtain the best mortgage or insurance deal from them.

You may receive a better service from the owner-proprietor of a long-established family business than from one of the large chains. Many estate agents offer an in-house conveyancing service, although you may be better off with an independent solicitor or conveyancer, as an agent’s services could easily lead to conflicts of interest. You’re generally better off obtaining a mortgage or buying insurance through an independent broker or a direct insurer (e.g. telephone or internet), than from an estate agent.

Relocation Agents

If you know what sort of property you want, how much you wish to pay and where you want to buy, but don’t have the time to spend looking (or you live in another region or overseas), you can engage a relocation agent (also called home search consultants or buying agents) to find a home for you. This can save you considerable time, trouble and money, particularly if you have special or unusual requirements.

Many relocation consultants act as buying agents, particularly for overseas buyers, and claim they can negotiate a better deal than private buyers (which could easily save you the cost of their fees). Some specialise in finding exceptional residences costing upwards of £500,000 (or an average house in London).

Relocation agents can usually help and advise with all aspects of house purchase and may conduct negotiations on your behalf, organise finance (including bridging loans), arrange surveys and insurance, and even organise your removal. Most agents can also provide a comprehensive information package for a chosen area including information about employment prospects, health services (e.g. doctors and hospitals), local schools (state and private), shopping facilities, public transport, amenities and services, sports and social facilities, and communications.

Agents generally charge a fee of 1 to 1.5 per cent of the purchase price (or up to 2 per cent in London) and an up-front ‘retainer’ of between £500 to £2,500 typically covering a six-month search period. The retainer is deducted from the fee when a property
is purchased but if you don’t go through with the purchase it’s usually non-refundable. To find a relocation agent contact the Association of Relocation Professionals (ARP) or look in the yellow pages under ‘Relocation Agents’.

Solicitor Agents

In Scotland, in addition to the usual estate agents, there are also solicitor agents, who are solicitors who also sell property. A solicitor agent isn’t tied to any financial institution and is obliged to provide genuine independent financial advice. There are far fewer complaints against agents in Scotland, where the whole process of property buying is quicker and cheaper than in the rest of the UK.

Property Descriptions

Most agents provide detailed descriptions of properties, although they may be a bit short on photographs. Generally, the more expensive a property is, the better and more comprehensive the information provided (agents may produce glossy colour brochures for expensive properties).

Agents aren’t permitted to over-elaborate on property descriptions under the Property Misdescriptions Act 1991, before which a garden shed could be (and frequently was) described as a palace in ‘agent-speak’. Even so there are many coded terms in agent-speak, such as ‘individual’ or ‘unique’ (which usually means that nobody else likes it), ‘in need of modernisation’ (needs a massive amount of work), ‘study/bedroom 4’ (a tiny box room), ‘cosy’ or ‘compact’ (tiny), bijou (microscopic), individual (quirky, strange), pleasant (boring), well presented (has had a quick paint job), and so on.

When property is advertised the number of bedrooms and bathrooms is always given and possibly other rooms such as a dining room, lounge (living/sitting room), study, breakfast room, drawing room, library, playroom, utility, pantry, cloakroom, cellar and conservatory. More expensive properties often simply list the number of reception rooms (e.g. lounge, dining room, study, drawing room, etc.). The total living area in square feet or square metres is almost never stated in advertisements or information sheets, although room sizes (in feet and inches) are included (always measure them to be sure).

Professional Organisations

If possible, always deal with an estate agent who’s a member of a professional organisation, such as the National Association of Estate Agents (NAEA, Tel. 01926-496800, www.naea.co.uk ). You should also check whether an agent is a member of the Ombudsman for Estate Agents (OEA) scheme (Tel. 01722-333306, www.oea.co.uk ), whose members (usually indicated by a sticker on an agent’s window) must abide by a code of practice and to whom you can complain if you have a problem. The ombudsman can levy fines of up to £25,000, which may explain why only some 40 per cent of agents are members!

An Office of Fair Trading (OFT) investigation into the industry recommended (in 2004) that a voluntary code of conduct be introduced, although industry observers called the report a ‘damp squib’ so don’t expect it to deter the crooks.

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