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Sellers are losing thousands of pounds because estate agents are manipulating the sale process by failing to notify them whenever a property is on the market, Trading Standards has warned.
Consumer groups say buyers could end up losing hundreds of pounds and sellers could lose thousands of pounds if their offer was not passed on because of a small part of the contract they signed. Stated.
Trading Standards points to the commissions (up to 60% in some cases) that some estate agents earn by introducing buyers to partner companies that provide mortgage broking, conveyancing and surveying services. You may also earn additional revenue by providing these services yourself through a separate business unit.
According to the law, conditional sales (where a real estate agent does not pass on an offer to a seller unless the buyer chooses their services) are “undesirable practices.” However, strictly speaking, this is not a “violation.”
There are exceptions to the rule. One way an agent can get around this is by letting the seller know in writing that they only want a certain type of offer.
James Munro of National Trading Standards told the Telegraph: one exception [to conditional selling] This is when the seller states in writing that they do not want a particular offer.
“Can agents get creative with the contracts they ask sellers to sign? [before they list their properties]. I’ve seen them include language like, “We reject buyers who are not financially qualified.”
“If you go to court, a judge will likely rule that express consent is required and that an implied consent clause in a contract is meaningless.”
Munro said agents often insist that the buyer is financially entitled to the agent’s offer even if the buyer has already paid an independent broker and generally has the power to decide on the mortgage. .
If the buyer refuses, the offer may not be accepted. However, if the seller signs a contract agreeing only to “economically qualified” offers, the agent is not technically breaking the law.
Mr Munro said attempts to capture investigators were proving to be akin to “whack-a-mole” and “nailing jelly to a wall”.
Trading Standards is concerned that the large number of unsuspecting buyers who choose the in-house services of an agent are gaining an advantage over those who do not.
Mr Munro added: “Large company factories making such references often employ agents who earn more from commissions than from selling homes.
“We receive data from Citizens Advice and the redress scheme, but ultimately we rely on people to come forward with information that may trigger an investigation. We have limited resources. .”
Robert Sinclair, chief executive of the Association of Mortgage Brokers, said the biggest concern is for agents to know how much they can pay if the buyer is financially eligible. said.
“This gives the agent an unfair advantage because the agent knows how much the buyer can spend, even if the buyer is bidding low.
“It’s about separation of duties. Agents cross these boundaries at their peril.”