Encountering problems with your estate agent Birmingham : Advantage Consulting

Encountering problems with your estate agent

Moving house is a momentous - and at times stressful - life event, and many people looking to buy and sell property engage the services of an estate agent to help make the process run as smoothly as possible. Nevertheless, things don't always go according to plan. Buying and selling property represents a significant financial (and emotional) investment, so it is important to put in place measures to reduce the likelihood of any issues arising, and to know where to turn in the event that you do experience any problems.

Please note that the housing law governing Scotland differs to that of the rest of the UK. This guidance is based on the system currently applying in England, Wales and Northern Ireland.

Initial considerations

Selling a property

When selling a property, it is advisable to obtain a series of valuations from different estate agents before deciding who to enter into business with. The valuations should be carefully compared, and it is important to be realistic regarding the asking price - while it may be tempting to go with a particularly optimistic valuation, this could ultimately end up delaying the sale of the property.

Different estate agents may charge different amounts for their services, and it can be worth negotiating with them regarding their fee levels. Once you have entered into an agreement with the estate agent it is legally binding, so you should ensure that you read the contract thoroughly and are happy with all of its terms. Particular consideration should be given to exactly what is included as part of the package (for example, advertisements in local newspapers, brochures, etc). If asked to pay a pre-contract deposit, a seller should check with their legal advisor as to whether this is appropriate, and find out whether the money is refundable if the purchase does not go ahead.

The agreement between an estate agent and a seller might include one or more of the following terms:

  • 'Sole agency' - this means that a single agent has been appointed to sell the property. Sole agency will usually last for a set period of time, after which the seller should be able to appoint additional agents. Should the seller appoint additional agents before this time, and the new agent makes a sale, the seller will have to pay commission to both agents. If the existing agent makes the sale, any amount payable to the newly appointed agent will depend on their individual agreement with the seller
  • If 'sole selling rights' apply, only the estate agent can sell the property, and should it be sold independently the seller will still need to pay the agent's fee
  • 'Multiple agency' means that more than one estate agent may be appointed, but the commission will be paid to the one who makes the sale; estate agents often charge higher rates of commission for such agreements
  • 'Ready willing and able purchaser' - if the estate agent finds a buyer who will buy the property and exchange unconditional contracts, the seller must pay the commission even if they do not proceed with the sale

Using an estate agent who is a member of a trade association may provide additional protection in the event of any problems.

Buying a property

It is worth remembering that the estate agent will generally be acting in the interests of the seller. While estate agents are prevented by law from providing misleading details regarding a property, the details they provide are usually only approximate, and should not be relied on when making a decision to purchase - it is up to the buyer to ensure that any specifications are verified. Equally, while many estate agents offer additional services, such as mortgage deals, it is important to shop around to find the package that is most suited to an individual's particular needs.

It is always advisable to have a survey carried out by a qualified chartered surveyor. This may take the form of a basic valuation survey (which confirms the value of the property), a homebuyer's valuation report (which includes a basic report on the property's condition), or a full structural survey (which goes into greater detail regarding structure and condition of the property). The Royal Institution of Chartered Surveyors can help to locate a surveyor.

It is also important to instruct an experienced legal professional who will deal with the legal issues relating to your move.

What the law says

Selling a property

The law stipulates that when selling a property:

  • The seller must receive written details of any fees or charges that they will be required to pay, and when those payments will be due
  • If the terms 'sole agency', 'ready willing and able buyer' or ' sole selling rights' are used in the contract, they must be explained using specific wording set out by law
  • When selling a property, the seller must be told promptly about any offers received by the estate agent, unless they have advised the agent otherwise. If an offer is made, the seller should also be able to renegotiate the price and conditions of sale before the exchange of contracts, without being penalised. Even when the seller has accepted an offer, the agent must continue to tell them about any further offers which are made unless otherwise specified
  • The estate agent must visit the property and take down information regarding its size and features
  • If an estate agent provides false or misleading statements about a property, this constitutes a criminal offence
  • An estate agent must inform a seller in writing if they are set to benefit personally from the sale of a property - for example, if the agent or a relative or business partner wants to buy it, and if they may benefit in any other way from the sale (this excludes the issue of commission)

Buying a property

  • An estate agent must tell a buyer if they, or a relative or business partner, are selling a property which the buyer is looking to purchase
  • If a buyer decides to purchase services from other organisations, such as a mortgage or insurance policy, an estate agent must not discriminate against them for doing so
  • It is illegal for an estate agent to mislead a buyer, and they must describe the property in a true and accurate way

When problems arise

Should you be unhappy with the services your estate agent is providing, in the first instance you should check through any written agreements between yourself and the agent, and then contact either the local branch or head office.

Examples of some possible grounds for complaint might include:

  • If an agent has not taken sufficient measures to make potential buyers aware of the available property, or if the seller disagrees with the details which are being provided
  • If it is felt that an estate agent is discriminating against a buyer or a seller on the grounds of such factors as race, gender, disability, religion or sexuality
  • If the seller is unhappy with an estate agent's bill following a sale. The seller should ensure that they receive a full breakdown of the individual costs for the agent's services, and should compare these with the original agreement
  • If an individual feels that they have lost money on buying or selling a property (for example if a deposit has not been returned when a purchase fell through, or has not been passed on to the seller, or if it is believed that the property sold for less than it was worth). In this case it is advisable to seek professional advice

If you wish to change your estate agent, check the agreement. If it allows you to make the change, you may still have to pay for any costs which the agent has incurred to date. Similarly, if you decide to pull out of a sale, you may still be liable to pay the agent's fees - again this will depend on the terms of the agreement.

Taking further action

If you make a complaint to your agent, and do not receive the response you require, there are a number of options available to you. This includes contacting Trading Standards; or if the agent is a member of a trade association, such as the National Association of Estate Agents (NAEA), or The Property Ombudsman Service (TPOS), these organisations may be able to help.

You may also wish to seek advice from an experienced legal professional.

How Can We Help?

Our experienced advisers are able to offer advice covering all aspects of property law. Please contact us for further assistance.

For information of users: This material is published for the information of clients. It provides only an overview of the regulations in force at the date of publication, and no action should be taken without consulting the detailed legislation or seeking professional advice. Therefore no responsibility for loss occasioned by any person acting or refraining from action as a result of the material can be accepted by the authors or the firm.