Estate Agents

Estate agents are a necessary lot. Interested in buying, selling or letting a house or flat? Their offices have traditionally been our first port of call.

However, be a bit cautious about the agents with whom you do business. Anyone can practise as an estate agent in the UK as there are no rules governing the licensing of agents. Some agents might charge fees higher than are acceptable or not steer you toward the best deal on a property.

A recent episode of BBC’s Whistleblower warned that agents in London sometimes dupe sellers of properties by offering fake bids, so sellers will be persuaded to lower their prices. Others, according to the BBC, allegedly accept money from developers for pushing their flats.

A good idea is to shop around and find an agent who is a member of the Ombudsman for Estate Agents scheme or the National Association of Estate Agents. These groups require their members to follow a code of conduct. Only about 40 per cent of estate agents in the UK fall under the ombudsman scheme.

How much should I pay an estate agent?

Prices vary for letting, buying and selling properties. But invariably, it is the seller who bears responsibility for paying the commission. The average commission paid by the seller of a flat or a house should usually fall between 1.5 and 2 per cent. However, estate agents can charge sellers as little as 0.5 per cent and as much as 4 per cent when orchestrating the sale of a property, particularly if you have appointed more than one agent.

How should I find an estate agent?

Watchdog groups suggest you visit at least three agents before you decide who to list your house with. Be sure they are members of the ombudsman scheme or the NAEA. If you have a complaint about a member, these organisations will investigate. Complaints about estate agents can also be directed to your local trading standards department and the Office of Fair Trading. It’s also a good idea to try to use an agent who has been recommended by friends: one who has a good record and many years of experience.

What should my dealings with an estate agent be like?

If you are a purchaser, before you meet an agent, get a feel for the prices of properties in the neighbourhood you are interested in. That way, you will know if someone is trying to fob off a £200,000 property in a neighbourhood where most of the homes are sold for £150,000. They should have some comparable valuations at hand on houses that have been sold in the area.

Question them about the types of other properties they have sold recently. Be candid about what you want and how you’re going to pay for it. Ask yourself whether you think they can either find a home that suits your needs or sell the one you’re living in?

If you are a seller, be sure to get valuation quotes from all the agents you visit and discuss commission fees ahead of time.

Peruse agency agreements and make sure you understand the terms of contracts.

Once you decide on which agent is right for you, it is important to build up a rapport. Establish a dialogue. When you want to instruct the agent to carry out a task, be sure to do it in writing. Send an e-mail, so you have a record of it. That way, you’ll avoid misunderstandings. The most important rule is that if you have a complaint, raise it immediately. Better to address it as soon as possible and not let it linger.

What obligations do estate agents have to buyers, sellers and letters?

The National Association of Estate Agents requires registered agents to comply with a “code of practice”. Member agents are suspended if they break these rules.

They must be ethical in their dealings. They should confirm their fees, commission rates, charges and terms of business in writing. Apart from previously agreed expenses, fees only come due if a seller enters into a contract. The agent has to acknowledge and tell the vendor about all the offers received on the property he is marketing. He also has to disclose in writing any possible conflicts of interest he might have or any circumstances that might create a conflict of interest. If an agent stops working with a client, he has to confirm that in writing and put details about any expenses and fees owed.

The duty of the agent is to protect and promote their clients’ interests. They cannot seek business by improper means and they can’t carry on doing business if they do not have adequate capital. Agents can also not instruct other agencies to assist in selling a property without their clients’ permission. When agents give advice on pricing a property to be sold, any figures given should reflect market conditions. An agent cannot put any client’s property on the market without asking permission. The same applies to placing a “For Sale” board on the client’s lawn. All advertisements and statements made about properties should be honest.

Agents are also required to keep deposits or any other money you give them in a separate account to their firms and not use your money for any other purpose. They must comply with the Estate Agents Act of 1979. They cannot mislead prospective buyers by misdescribing properties they are selling. They must publish a code of conduct and treat everyone they deal with or employ on fair terms.