How to avoid problems with estate agents

New laws will help protect customers' rights when dealing with estate agents. But whether buying or selling, Graham Norwood explains how to avoid the pitfalls in the first place
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The Independent Online

If you believe the days of dodgy estate agents are over, think again. Last week's Queen's Speech promised legislation to force all agents to join a scheme that offers the possibility of compensation to buyers and sellers who complain. So far, so good - but that does not alter the fact that estate agents need no formal training, and that, compared to most countries, the house-selling industry in the UK is poorly regulated.

"This is a missed opportunity. Redress alone is not sufficient," warns Stephen Gould of the Royal Institution of Chartered Surveyors (RICS). "Consumers should have confidence when they walk into an estate agent that it is a properly regulated business. The current proposals don't offer them this."

"This is clearly a step in the right direction," says Charles Smailes, president of the National Association of Estate Agents, "but what is equally important is to do everything possible to stop the malpractice happening in the first place. We'd like to see the government make it compulsory for all agents to be a member of a regulatory body."

Last year there were 6,021 complaints submitted to the Ombudsman for Estate Agents - a startling figure when you know that there are only 30,000 estate agents in the UK and, until recently, only a third of them subscribed to the OEA scheme.

So what are the most common causes of complaints and how can the canny buyer and seller avoid the pitfalls? Ask if your agent has signed up to the RICS or the NAEA codes of practice, and what training their employees have undertaken, and if they have signed up for the OEA scheme. Then ask the agent for buyers and sellers who you can contact for references. Finally, be involved in the process day in, day out, and never be afraid to complain. To an agent, you're just another customer. But your property is your biggest asset. Here are the 10 most common pitfalls, and how to avoid them.

1 VALUATION

Ask three agents to value a home, and the figures may vary wildly. An agent giving a value much higher than his competitors may be luring the vendor into giving him the instruction to sell, only to suggest the asking price is reduced afterwards. Good agents are in the RICS, follow written guidelines on valuation, and look at "comparables" - prices of similar local properties that have sold recently. Ask them to run through the process with you, and show you the comparables.

2 AGENT'S DETAILS

The OEA says many complaints are about inaccurate details, the slow appearance of particulars on paper and on websites, or poor-quality photos taken on cheap digital cameras. There is no alternative for the seller but to be strident and hassle an agent into producing timely and correct material. Don't be afraid to hand back their details, with your own comments scribbled on them.

3 FEES

This is a big point of contention. Agents typically charge 2 per cent of the sale price, meaning the seller of an average UK property will pay almost £4,000, or around £6,000 in London. Many agents and vendors agree that if a property is "sold" within the first month, a higher commission will be paid; afterwards, a lower fee applies. But does "sold" mean when an offer has been accepted, contracts exchanged or when the buyer moves in? Define your terms in writing. Remember, most agents add VAT to fees too, and will soon charge to prepare the Home Information Pack, compulsory from June 2007. Finally, check if the agent's fees cover marketing costs or whether there are hidden extras.

4 PUBLICITY

Sellers are often surprised to be asked to pay extra for newspaper or magazine advertising. Costs can be from £75 for a small picture and cursory details in one issue of a local paper to £6,000 if you want your pile to get a full page in colour in Country Life. If you do not check what advertising is included in the basic agent's fee you may be stuck with a sheet in their office window and a website entry, unless you pay more.

5 VIEWINGS

Specify up front whether you want viewings to be accompanied by an agent. If you do not, you may be obliged to take time off work to show potential buyers around yourself. Agents' failure to accompany viewers was the fifth most frequent cause of complaint to the OEA in 2005.

6 MORTGAGES

It is illegal for estate agents to pass a buyer's financial details to any mortgage company. However, many agents have alliances with financial advisers (some even have them based in the same office) and if a buyer has not arranged a loan it may be tempting to use the "in-house" facility. "But this is rarely the cheapest option and buyers should consult a broker or simply shop around," advises a spokesman from the mortgage broker John Charcol.

7 BUYER'S FINANCES

It is in everyone's interest for an estate agent to find out if a buyer can afford to purchase your home, to avoid time-wasters and sales falling through at a late stage. Yet many agents fail to press a buyer for evidence of his ability to pay - such as a letter from a mortgage lender stating that sufficient funds are in place. The seller must insist an agent does this, no matter how sensitive the issue may be.

8 "FOR SALE" BOARDS

Surely no problem here? Oh yes there is. Some large estate agents, notably the London chain Foxtons, have been fined and criticised for allegedly putting their own "For Sale" signs on homes actually on the books of their rivals. This may be done to attract rival agents' customers. Even if you avoid such shenanigans, getting a sign removed when a transaction is completed can be an irritatingly slow business. Again, hassle the agent to take the board down and at least keep the notice up to date, changing the words from "For sale" to "Sale agreed" and finally "Sold" punctually.

9 FEEDBACK

Good agents should give feedback after viewings, immediately inform sellers of any offer, and possibly withdraw a property from sale if the vendor and the would-be buyer agree on a price. But some agents fail to keep sellers up to date, or delay removing a home from the market once a deal has been agreed, in the hope that a better offer comes along and tempts the vendor.

10 KEYS

A badly organised agent, especially a one-man band, can be spending time with new customers when he should be available to hand over keys to an existing client on the day of the move. There were 70 complaints along these lines. Ultimately, if an agent delays your moving day, and leaves you needing to pay for storage or extra removal costs, the agent may well be liable.

If you receive poor service, contact the Ombudsman for Estate Agents ( www.oea.co.uk) or the Trading Standards Office ( www.tradingstandards.gov.uk or www.detni.gov.uk). The Office of Fair Trading ( www.oft.gov.uk) has powers to investigate estate agents who may have broken laws governing the industry.

Hunt for Britain's best estate agent

Is your estate agent the most honest in Britain? Does he or she regularly go above and beyond the call of duty? We want to know about them, so we are searching for the best estate agent in Britain and need your help.

If you have a nomination for Britain's best estate agent e-mail your story to propertyedit@independent.co.uk or write to the Property Editor, The Independent, 191 Marsh Wall, London E14 9RS.

Entries will not be accepted if sent directly from estate agents.

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