Estate agents should be banned from trading for life if they over-value property in order to get a vendor’s business or knowingly undervalue it in order to make a quick sale, without the vendor’s permission. This is one of the conclusions of a paper on estate agency by the National Consumer Council.(*) The paper was drawn up in response to proposals made by the Director General of Fair Trading for tightening up the rules governing estate agency.
The NCC would also like to see estate agents banned if they fail to disclose a personal interest in writing, fail to disclose that buyers are associates of the estate agent or fail to disclose their interest to other prospective purchasers. It should also be an offence to fail to pass on bids to vendors because the bidders do not want to obtain a mortgage or endownment policy through them.
The NCC agrees with the Office of Fair Trading that it should be made a criminal offence for estate agents to publish misleading information about properties, which wastes househunters’ time. Estate agents should be obliged to tell vendors if prospective buyers are selling their house through the same estate agent. The council also wants local trading standards officers to be able to prosecute offenders.
A survey conducted among house sellers for the NCC last year showed that agents’ fees were a relatively minor factor, compared with the firm’s reputation. Of those questioned, 33% said they chose the firm because it was a familiar or well-known name, 32% because it was well known in the area and 25% because it was reliable. Only 15% said that the choice was because of the agents’ charges.
If people do not care about agents’ fees when they choose an estate agent, they do care when it comes to paying the bill, the NCC says. More people complained about estate agents’ charges than solicitors’, surveyors’ or lenders’ charges. Similarly, more people complained that estate agents had provided a poor service and were not “on their side” compared with other professionals they used.
Asked what they thought of the service that they received from estate agents, 59% of vendors said “overall they provide a good service”, 58% felt that “they were on my side” and 50% thought that “their charges were reasonable”.
Of those participating in the survey, 76% said that they understood what the estate agent told them, 63% said that they kept them well informed and the same percentage said that they were satisfied with the time taken, while 66% said that they provided good information about their charges.
Buyers were more critical of the estate agent through whom they bought their house. Only 52% thought that they provided a good service, the same proportion said “they kept me well informed”, 54% said “I understood what they were telling me”, and 57% said “I was satisfied with the time that they took”.
Something for which consumers did not blame estate agents was problems and delays in the housemoving process. Only 19% blamed the estate agent acting for the house that they were buying and 16% blamed the estate agent selling their old house. Some 34% considered their buyer to be very or quite responsible, while 24% blamed the people they were buying from and 23% blamed their solicitor.
The National Consumer Council has a new chairman — Lady Wilcox. Commenting on the NCC estate agents’ report, she called for tougher action to protect housebuyers from the “minority of bad lads” in the business. She has also called for a complaints system, with the power to award compensation to consumers who lose out because of malpractice by estate agents. And she suggested that estate agents should be obliged to take “a short simple test” in the law relating to house sale and purchase and their own obligations before being allowed to set up in business. “I believe most estate agents do a good job. But unless dubious practices by a cowboy minority are stamped out, the public could lose confidence in estate agents generally.”
(*) Estate Agency. National Consumer Council, 20 Grosvenor Gardens, London SW1W 0DH, Free with an SAE.
