How have Estate Agents misused their positions of trust?

maz_student

Pardon my ignorance on this subject because I am new to the scene
I am asking this question and I hope it will be of benefit to those who are also looking to buy their first house/flat.

How can (or 'how have') Estate Agents misused their positions of trust?
What specific things can these Estate Agents do to fool the buyer?

Here's the only scenario I can think of:
Since the buyer and seller will hardly meet, can the following occur:
The seller's asking price is £200k.
The estate agent tells you (the buyer) that its £205k.
Everything goes to plan, you buy your property.
£200k goes to the buyer.. the estate agent pockets the £5k.
Is this the type of thing that goes on?

Like I said, im totally new to all this, so please bear that in mind in my (ridiculous?) scenario ...

Doozergirl

An estate agent does nothing but introduce buyers and sellers via marketing. There is no position of trust, they are agents, not vendors.

All the legals are done via solicitors. Vendor and purchaser sign copies of exactly the same contract, there's not a chance of what you describe happening.

There isn't much an EA could do except try to fool a buyer into thinking a property is worth more, or a vendor that their property is worth less. Any degree of investigation or research on comparables on the part of either party would see paid to that.

socrates

Not so stupid.

In Cyprus a seller agrees a price they are prepared to sell for - the Agent can then market and sell the property for whatever they want.

Example seller wants 200,000 Euros the agent then finds a buyer prepared to pay 240,000 Euros - the agent is entitled to the 40k PLUS his fee.

There were hundreds of cash rich Russians who parted with double the value of the house they bought.

This practise was commonplace with the largest developer who also ran an EA - Leptos.

It was also common for them to have a clause in their contract that you could only resell via them.

So by comparison we should thank our lucky stars for the EA's over here!!!

Wickedkitten

Position of trust?

Rule 1 is never trust an estate agent when you are buying, doubly so if he looks like a pop idol reject. They are working for the vendor, not you.

david29dpo

Post 2 is correct in England.

SwissLe

It works quite well in the UK in that the vendor and estate agent both have a common interest to get the very highest price for the property. The larger the sale price, the larger the EA commission. This doesn't always work well for the buyer if they are trying to blag a bargain and to a certain point EAs were pushing the prices of property to the staggering levels in 2007.

I'd say we have one of the least corrupt property purchasing markets in the world. Obviously some 'clients' will have first choice on property etc but this is very hard to control but on the whole we have a not-so-bad bunch!

googler

I'm sure EAs will be on hand to point out that not all sellers are a paragon of honesty....

Typically, EAs in this country agree an asking price, and projected selling price, with the seller and have a CONTRACT that the EA will get a percentage of the sale price, not the excess over the client's expected figure.

Any EA trying to extract more than they're contracted for from the deal without the seller's consent would soon be hauled through the courts.

maninthestreet

maz_student wrote: »

Pardon my ignorance on this subject because I am new to the scene
I am asking this question and I hope it will be of benefit to those who are also looking to buy their first house/flat.

How can (or 'how have') Estate Agents misused their positions of trust?
What specific things can these Estate Agents do to fool the buyer?

Here's the only scenario I can think of:
Since the buyer and seller will hardly meet, can the following occur:
The seller's asking price is £200k.
The estate agent tells you (the buyer) that its £205k.
Everything goes to plan, you buy your property.
£200k goes to the buyer.. the estate agent pockets the £5k.
Is this the type of thing that goes on?

Like I said, im totally new to all this, so please bear that in mind in my (ridiculous?) scenario ...

The money that the buyer pays the seller goes through the bank account of the buyer's solicitor to the bank account of the seller's solicitor - how would the EA get their hands on the money?

Mini_Bear

A friend is currently trying to buy a repo and the EA marketing the property has told her that there are other offers being made on the property and that they should increase their initial offer.
Friend is suspicious and thinks the EA is just trying to increase the sale price to increase their comm.
They were told to increase the offer 20k (on a 100k house!!) I know the EA is supposed to get the very best offer on repos for the bank - but it seems a rather large jump!
Friend currently doesnt know what to do, as house is a repo she cant even speak to the vendors about whether they have had many viewings/interest.
This could be an EA con surely?!

poppysarah

I'm viewing a repo this afternoon. Won't be putting a higher than asking price offer in - mainly cos I don't want to be upping the prices of property if I can help it.

I know it's been empty a year and that the other propertys on the road have gone for more ... but I also know the council tax is about to go up a band.

You have to look at nearby properties for sale - a repo isn't a bargain necessarily.

chickmug

googler wrote: »

I'm sure EAs will be on hand to point out that not all sellers are a paragon of honesty.....

Very very very true and applies to not all buyers as well:D