Complaints about estate agents jump by 40%

John Fitzsimons looks at why complaints against estate agents have jumped sharply, and what you should do to pick the right agent.

My dad played a vital role in securing my house, as he handled a lot of the negotiation with the estate agent on our behalf. The simple reason that we got him to do this is that he’s an estate agent himself and knows how it all works – we were first-time buyers and needed all the help we could get.

Sadly not everyone is so happy with the service they get from agents.

According to the Property Ombudsman, there has been a sharp rise in complaints against estate agents. In the last quarter of 2009, the Ombudsman oversaw 128 new cases against agents – by the first quarter of 2010 that had jumped to 183, an increase more than 40%.

So what is it that people are complaining about? The Ombudsman published a number of case summaries of the sorts of issue he has been faced with so far, which give us a decent idea of the issues.

Fixed fees

The first issue surrounds fixed fees. The example the Ombudsman gave was focused on one complainant who was told that the fee would be 2%, and so signed the agreement without fully reading it. In reality the fee was a fixed figure that happened to be equivalent to 2% of the asking price, rather than 2% of the eventual sales figure.

While the seller is mainly responsible for this as they did not read the agreement properly, the Ombudsman emphasised there is an issue here with estate agents not making their fees sufficiently clear, particularly when estate agents charge a fixed fee, as most agents charge a percentage fee.

Commissions

The issue of when an estate agent is due a commission was also raised.

One example surrounded a seller who had dis-instructed the agent after the buyers had viewed the property, and then handled the sale privately. The agent nonetheless issued the sellers with an invoice for their commission. The Ombudsman found in favour of the agent.

In contrast, the Ombudsman also covered a complaint by a solicitor firm against an agent over its conduct in the handling of a property belonging to someone who had died. The agent was never actually instructed by the solicitors (acting as executor for the deceased), and yet still attempted to claim commission when the property was eventually sold.

The agent’s behaviour was deemed by the Ombudsman to be completely inappropriate, and his claim to commission was dismissed.

Marketing

The third issue which the Ombudsman chose to draw attention to surrounded the marketing of properties by estate agents.

Related how-to guide

Sell your home

If you want to obtain the best possible price when selling your home, then these ideas should help.

See the guide

The Ombudsman found in favour of all of the complaints, bar those surrounding the conduct of the viewings.

The Ombudsman also highlighted a case where a buyer who had had an offer accepted on a property was not kept sufficiently informed when the seller opted to continue having viewings, and had not dealt with the initial complaint well, in which he again found in favour of the complainant.

Why the rise?

Recent question on this topic

• Bonnie354 asks:

  We own 36% of the freehold (4 flats, but ours is the largest) - should we be paying 36% of all expenses too?

  • 
    Donna Werbner answered "Hmm good question. I would check through allthe legal documents that you signed when you..."
  • 
    liesarenocomfort answered "The starting point with these queries is the lease. What does the lease say? A lease is just a form..."
  • Read more answers

It’s not just complaints against estate agents that have risen sharply – there has been an even more drastic jump in complaints against letting agents.

Somewhat worryingly, the Ombudsman admits he has no idea why there has been such a significant increase in complaints, adding that those figures within the property market he has spoken to as part of his work are similarly surprised by the rise.

One potential explanation would surround the general business of the market – things typically slowdown in the build-up to Christmas, before picking up again in the New Year. However, given quarters two and three of 2009 saw 104 and 122 new cases against estate agents respectively, it’s difficult to argue that the recent jump is simply down to seasonal factors.

Lessons to learn

What should be clear is that while plenty of estate agents do a decent job, just as many take shortcuts or fail to deliver what they should do. There are a few lessons to learn from the examples above.

Related blog post

• John Fitzsimons writes:

  Should you use an estate agent?

  When the time comes to sell your property, should you rely on an estate agent or do it yourself?

  Read this post

Firstly is to ensure that you are absolutely clear on what fees the agent will be charging. That doesn’t mean relying on what they tell you, but actually reading the contract and documents you are provided with. Pleading ignorance will not cut it.

Similarly, you cannot simply try to cut the agent out of the deal once you have found a buyer. There are plenty of avenues you can take to sell the property yourself without using an estate agent, as explained in The cheapest way to sell your home, however if you do decide to ditch your agent make sure you are clear on what fees (if any) they will still be due.

All of the issues detailed by the Ombudsman essentially come down to communication, and understanding your respective responsibilities. So long as all parties are sufficiently explicit in this area, problems should be kept to a minimum.

Picking a good estate agent

So how do you find a good estate agent, and get a good deal from them? Here are my five simple steps:

Before you sign up with an agent, do a bit of research. Word of mouth recommendations are always a good starting point, so pick the brains of local friends and family. Also be sure to check that the agent is a member of the National Association of Estate Agents, as they will then have to comply with a code of conduct.

2. Shop around

Get quotations on fees from at least a couple of different agents. Don’t be afraid to negotiate these fees with the agent, though national chains tend to have less room for maneuver.

3. How will the property be marketed?

The way a property is sold has changed an awful lot in the last ten years, thanks to things like online property portals (and some agents even employing text messages as a marketing tool). So make sure you know what methods the agent will be employing to help you sell your home.

4. Property visits

Who will be handling the property visits? Personally it drives me mad if the vendor is left to handle the visit themselves – the whole point of an estate agent is to help with the sale, this is their area of expertise, so they should be playing a hands on role!

5. Sales history

And finally, ask them plenty of questions about how long they tend to have properties on their books, and how many similar properties they have shifted in recent months, to get an idea of just how good they are.

More: The future of house prices | Homeowners: Wave goodbye to HIPs and hello to £200