‘Only the agent wins’: we ex­pose the rip-offs

The Daily Telegraph - Your Money - - YOUR MONEY -

Es­tate agents’ ques­tion­able prac­tices mean buy­ers and sell­ers can both get a bad deal, a whistle­blower tells Amy Willis

There’s a joke among es­tate agents that they no longer sell houses – in­stead, they in­creas­ingly profit from mort­gage broking and con­veyanc­ing ser­vices, caus­ing buy­ers and sell­ers to lose out.

“It’s all about sell­ing mort­gages these days,” said Jenny*, who has worked in the in­dus­try for 10 years at a large chain based in the South East. Jenny has come for­ward to blow the whis­tle on dodgy es­tate agent prac­tices that leave cus­tomers thou­sands of pounds out of pocket.

“They put this blind faith into their es­tate agent and that is be­ing abused, pure and sim­ple,” she said. “Most peo­ple only go through this process two or three times in their life. They don’t know enough to un­der­stand what is be­ing done to them.”

Pres­sure to sell mort­gages means both sell­ers and buy­ers are miss­ing out.

Sell­ers are los­ing money be­cause they are be­ing de­lib­er­ately put off high bids from buy­ers with in­de­pen­dent mort­gages, she said.

“Most peo­ple for the sake of a cou­ple of thou­sand pounds will go with the [of­fer] they’ve been told has more cer­tainty,” Jenny ex­plained.

“So you just put both of­fers to the home­owner and say: ‘ This one of­fered £2,000 less but they are do­ing ev­ery­thing in-house and it is far more likely [the sale] will go through. If you go with the per­son who’s of­fered £2,000 more, they are us­ing their own so­lic­i­tors and their own mort­gage ser­vices so we can’t make any guar­an­tees.’ ”

Some­times a ven­dor agrees only to ac­cept of­fers “fi­nan­cially ver­i­fied” by the es­tate agent, Jenny added, giv­ing the es­tate agent free rein to re­ject in­de­pen­dent buy­ers out­right.

And the tricks don’t stop there. Buy­ers at Jenny’s firm are told they can get a £1,000 “buyer’s in­cen­tive” dis­count if they use in­house mort­gage and con­veyanc­ing ser­vices – but in re­al­ity this is shaved off their bid to the seller. Buy­ers are also told they will be­come a “hot buyer” if they see the es­tate agent’s mort­gage bro­ker, giv­ing them spe­cial ac­cess to a “pre­mium buyer’s list” of

Don’t get pan­icked. Es­tate agents try to whip peo­ple into a frenzy to se­cure the sale they want, not the sale you want.

Don’t get talked out of the best deal. Es­tate agents some­times cast bids in a poor light for the wrong rea­sons. Ask for proof, ide­ally in writ­ing.

Don’t use es­tate agents that push mort­gages. If they do, their houses only avail­able to them.

Not only does the seller miss out with the lim­ited pool of buy­ers, but Jenny warned that there was a sting in the tail for those who met the bro­ker too.

“The in­for­ma­tion is not con­fi­den­tial. When you’re sit­ting in the mid­dle of an of­fice hav­ing a con­ver­sa­tion with a mort­gage bro­ker, your de­tails are not be­ing kept se­cret,” she said.

“The data pro­tec­tion side of it is just ter­ri­ble. In­for­ma­tion is en­tered

‘They put blind faith into es­tate agents and that is be­ing abused’

tricks could leave you out of pocket.

Ex­tra ad­ver­tis­ing. If your prop­erty isn’t sell­ing, es­tate agents might try to charge more. Think be­fore on a com­puter where it is held at head of­fice – that’s fine – but when I as an agent go to a printer and find copies of some­one’s pa­per­work and bank state­ments that a mort­gage bro­ker has pho­to­copied and for­got­ten about, I can get my hands on so much of some­one’s in­for­ma­tion.”

And, ac­cord­ing to Jenny, many agents use that in­for­ma­tion to drive up buy­ers’ bids. “While we can’t tell [the seller] ex­actly what the buyer can af­ford, you can care­fully say: ‘Oh, I think there might be more in the pot, do you want me to go back to them?’ ”

You can bounce back and for­ward sev­eral times un­til you reach that top fig­ure, safe in the knowl­edge that you know

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