Estate Agents - Dodgy?
Discussion
I am in the process of purchasing my first house. I have just had my offer for the property in question accepted. The estate agent was very helpful when it came to the price. He dropped a few subtle hints about the price, I could get it for. Just now I have received the notification of sale through. It lists a LTD. Company as the vendor. So I have done a quick company check and noticed the estate agent is the director of the LTD. Company. Is this legal? It has sent alarm bells ringing.
In answer to your question the Estate agent you have found is definitely dodgy.
Arm yourself with a decent Solicitor and seek his advice.
Undeclared personal interests (which this is!) are not uncommon in Estate Agency. Most are less easy to identify.
If you like the house and it suits you and you feel the price is fair then I would check this as far as you can before commitment.
The agent concerned is definitely dodgy.
But the house may still be a worthwhile buy.
Arm yourself with a decent Solicitor and seek his advice.
Undeclared personal interests (which this is!) are not uncommon in Estate Agency. Most are less easy to identify.
If you like the house and it suits you and you feel the price is fair then I would check this as far as you can before commitment.
The agent concerned is definitely dodgy.
But the house may still be a worthwhile buy.
To be slightly more precise, section 21(1) of the Estate Agents Act 1979 prohibits an estate agent from entering into negotiations in relation to a property in which they have a personal interest unless they have told the party they are negotiating with of the personal interest. So he should have told you before you began negotiations began.
As has been alluded to above, the estate agent may not in fact have a personal interest in the property, so don't go in all guns blazing as it could be a misunderstanding. On the other hand, if the agent does turn out to have an interest then it would not be beyond the realms of possibilities to hold the threat of reporting the offence to the OFT over him in order to secure a significant reduction to the purchase price...
As has been alluded to above, the estate agent may not in fact have a personal interest in the property, so don't go in all guns blazing as it could be a misunderstanding. On the other hand, if the agent does turn out to have an interest then it would not be beyond the realms of possibilities to hold the threat of reporting the offence to the OFT over him in order to secure a significant reduction to the purchase price...
Seems very grubby.
It's inconceivable that you were able to negotiate the best deal as the middle man was irrefutably working solely for the vendor.
I wonder how he plans to bill his fees etc?
Does the individual own the agency or is he an employee?
I would certainly speak to your solicitor to be absolutely reassured that you are not at risk but also as someone said, if the deal is genuinely right for you personally then it doesn't really matter if the vendor is the estate agent, Lord Lucan or a Womble so long as you are legally covered and happy with the numbers.
It's inconceivable that you were able to negotiate the best deal as the middle man was irrefutably working solely for the vendor.
I wonder how he plans to bill his fees etc?
Does the individual own the agency or is he an employee?
I would certainly speak to your solicitor to be absolutely reassured that you are not at risk but also as someone said, if the deal is genuinely right for you personally then it doesn't really matter if the vendor is the estate agent, Lord Lucan or a Womble so long as you are legally covered and happy with the numbers.
Steffan said:
The agent concerned is definitely dodgy.
But the house may still be a worthwhile buy.
This ^^^But the house may still be a worthwhile buy.
If the dodgyness is just not declaring his interest I'd let it slide if the house is what you want at a price you like.
An EA having a company to buy repos or otherwise distressed sales cheap with a view to selling them on doesn't seem that unusual or out of order to me.
I'd just get a good surveyor to make sure he hasn't bought a s
tter and just tarted it up on the cheap and a good solicitor to ensure proper title. Not worth getting strung up on a bit of sharp practice if everything else checks out.mattley said:
An EA having a company to buy repos or otherwise distressed sales cheap with a view to selling them on doesn't seem that unusual or out of order to me.
An agent phoned me yesterday offering me a bargain property. I couldn't give a toss whether or not she's bought and is reselling it welding on a bit of profit. Who cares? Don't tell me the under-rock-dwellers have invented some regulation preventing a property dealer making a profit from buying and selling them. Bonkers. What's next? If I buy and resell it again (at a profit, because presumably it's the making-a-profit that's the 'problem') is that somehow
immoral/antisocial/illegal? What nonsense!!
groak said:
Don't tell me the under-rock-dwellers have invented some regulation preventing a property dealer making a profit from buying and selling them.
Nope, there's noth stoppin gthat at all, the regs simply say that any agent with an interest in the property makes it clear on the particulars that its a connected sale.Applies to agency staff marketing their own homes as well as investment properties.
Given that the agent works for the vendor, and therefore the buyer shoudl always assume the agent is not on their side, I'm not sure why its such a big deal.
Like most on this thread have siad, if its the right property for you, proceed, but add caution. If the agents a bit dodgy, maybe he should give you a bit of a deal given that he's forgotten to inform you of something.
groak said:
An agent phoned me yesterday offering me a bargain property. I couldn't give a toss whether or not she's bought and is reselling it welding on a bit of profit. Who cares?
Don't tell me the under-rock-dwellers have invented some regulation preventing a property dealer making a profit from buying and selling them. Bonkers. What's next? If I buy and resell it again (at a profit, because presumably it's the making-a-profit that's the 'problem') is that somehow
immoral/antisocial/illegal? What nonsense!!
No, there is nothing to prevent someone making a profit from buying and selling property for profit - you're jumping to a ridiculous and wrong conclusion. The issue here is an estate agent (not a property dealer) negotiating the sale of a property to a purchaser, including making 'friendly' suggestions as to the level of offer that will be accepted by the vendor, whilst not informing the purchaser that it is in fact the agent himself who is the vendor and who will decide whether or not to accept it. Don't tell me the under-rock-dwellers have invented some regulation preventing a property dealer making a profit from buying and selling them. Bonkers. What's next? If I buy and resell it again (at a profit, because presumably it's the making-a-profit that's the 'problem') is that somehow
immoral/antisocial/illegal? What nonsense!!
One example of why this is illegal is that a purchaser will often tell an estate agent what his highest offer would be in the event the vendor rejects a lower offer. The agent is then aware of the maximum you would be willing to offer and thus damaging or completely destroying the purchaser's negotiating position. This is an unfair practice and an abuse of trust and position by an estate agent.
Finally, it's not something that's been recently invented as you suggest - the law has been in place for over 30 years.
Pay for an independent RICS valuation? Worth asking then cheeky feckers to pay for it too siunce their lack of transparency has caused it.
I looked at a place in Lincolnshire last year where they decalred that a staff member was interested in buying it. It stayed on the market less than 24 hours and was on and off their web site in the day. Didn't get to Rightmove. If you didn't happen to be on their site on thqat day you missed it. I also had a friend who worked in an EA and she is now living in a house which did not see the open market.
Cogcog said:
Pay for an independent RICS valuation? Worth asking then cheeky feckers to pay for it too siunce their lack of transparency has caused it.
If the agent pays for it, the valuer will work for the agent and owe them a duty of care, there will be no duty of care towards the OP. He could pay for it and claim the money back. If he's getting a mortgage it will have to be valued anyway, but some surveyors do ask agents what they think a property is worth.......
mantis84 said:
One example of why this is illegal is that a purchaser will often tell an estate agent what his highest offer would be in the event the vendor rejects a lower offer. The agent is then aware of the maximum you would be willing to offer and thus damaging or completely destroying the purchaser's negotiating position. This is an unfair practice and an abuse of trust and position by an estate agent.
So, using your example, what's the problem? They phone up with a property (theirs, yours, whoever's) and I tell them what I'm prepared to pay for it (my highest offer). Then no doubt they phone anyone else they know to see if they can get a better price. If they do, they do. Who cares? I wasn't going to pay any more than my best price anyway, and if someone else will then that's up to them. And if they don't, then it's mine. Unfair? Abuse? scotal said:
If the agent pays for it, the valuer will work for the agent and owe them a duty of care, there will be no duty of care towards the OP. He could pay for it and claim the money back.
If he's getting a mortgage it will have to be valued anyway, but some surveyors do ask agents what they think a property is worth.......
I mean get a valuation, then ask them to refuhnd it from the purchase price.If he's getting a mortgage it will have to be valued anyway, but some surveyors do ask agents what they think a property is worth.......
groak said:
mantis84 said:
One example of why this is illegal is that a purchaser will often tell an estate agent what his highest offer would be in the event the vendor rejects a lower offer. The agent is then aware of the maximum you would be willing to offer and thus damaging or completely destroying the purchaser's negotiating position. This is an unfair practice and an abuse of trust and position by an estate agent.
So, using your example, what's the problem? They phone up with a property (theirs, yours, whoever's) and I tell them what I'm prepared to pay for it (my highest offer). Then no doubt they phone anyone else they know to see if they can get a better price. If they do, they do. Who cares? I wasn't going to pay any more than my best price anyway, and if someone else will then that's up to them. And if they don't, then it's mine. Unfair? Abuse? PH-based example:
If you're buying a car, you don't tell the seller that you're willing and able to pay the asking price but then make a lower offer, right? Because you'd take away any negotiating position you might have been able to take advantage of to secure the car for less than the asking price.
I would agree that because an estate agent is principally acting for the vendor, the purchaser should always be wary of the estate agent regardless, so this shouldn't really be a big issue. However the OP's circumstances highlight why it is.
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