Trust me; I’m an estate agent...
Estate agents have never been the most popular people in the world, but recent investigations by undercover investigators and the Consumers’ Association have shown that some agents are acting unlawfully and using blatant lies in their efforts to sell properties. Complaints to the Ombudsman rose by 16% in 2008, to 6,462, but it is believed that this may just be the tip of the iceberg.
Underhand tactics include:
• Pressing buyers into taking out a home loan with a company connected to the agency
• Getting a potential buyer to increase an offer on a property by fabricating another ‘higher’ offer
• Undervaluing properties to sell them to colleagues, family and friends
• Neglecting to pass on details of all the offers on a property to the vendor, in the hope of receiving a better offer at a later date
• Refusal to reduce commission, even when the price is decreased
• Overvaluing properties to ensure business from sellers
• Showing potential buyers around a property, even when an offer has been accepted, in the hope of receiving a larger one.
• Supplying customers with fake documents in order to help them secure a mortgage
• Fabricating low offers on a property in order to shock the seller into accepting a genuine offer which is much lower than the original valuation
• Producing fake evidence of properties in the same area selling for overly high prices
• Erecting ‘for sale’ and ‘sold’ prices on properties that have absolutely nothing to do with the agent
Although these scams are illegal under the Estate Agents Act, less than one in three agents are signed up to the industry’s voluntary code of conduct. The Consumers’ Association’s probe into the industry found, in addition to serious breaches of the law, widespread use of complex and misleading contracts. It is now calling for an official government watchdog for the industry. Pete Tynan of ‘Which’ magazine said: “The Estate Agents Act obviously isn’t working and most agents we looked at weren’t even following the basic provisions of the law.” The Office of Fair Trading is currently investigating the industry is due to publish its findings in a few weeks.
Clearly, none of these practices are anything new. The BBC’s Whistleblower programme put two undercover investigators into a branch of Foxtons in London, in 2006. They discovered that lying to customers, faked signatures, false passports and dodgy deals with developers was par for the course at that particular branch. In 2007, Pav Sheen, a disillusioned former estate agent wrote a book called ‘Tips, Tricks and Traps’ about his two years of working for agents in north and east London. Mr Sheen had eventually found the corruption of taking advantage of buyers who had put their trust in him, too much. He said: “The most vulnerable people are the first-time buyers at the lower end of the market because they’re really in the hands of the estate agent.”
It seems that this industry has been a law unto itself for several years and, although it does have an ombudsman that the vast majority belong to, it is badly in need of better policing. The situation has clearly been exasperated by the boom and boost scenario that we have experienced in recent years but it does not excuse the actions of certain rogue agents who have clearly made a vast amount of money at buyers and sellers expense alike. Let us hope that the government is strong enough to regulate the industry properly. In the meantime, if you’re buying or selling a house – always try and double-check what you’ve been told!