Estate Agent Ethical?

courtjester

Are we not getting ahead of ourselves here ....

Whilst I agree wholeheartedly with comments regarding the moral behaviour of this particular agent, the question of legal obligation to pass on offers only occurs at the point at which an offer is made - my reading of this thread is that hechizero has not ACTUALLY made an offer ....???

All hechizero has done is indicated interest in making an offer - an agent is not obliged to pass on 'interest'.....

I believe that the agent cannot refuse to pass on an offer even after another offer has been accepted - he is legally obliged to forward ALL offers made at any time onto the vendor.

Again, the agent would be breaking the law if he refused to pass on offers except where buyers were taking the agents own mortgage or conveyancing services. This is a clear conflict of interest - that of the agent with that of the client (vendor), a practice which the law is there to protect clients against.

However, I don't think there is any legal obligation to deal with any prospective buyer in the absence of an offer and if an agency feels it appropriate to fast track buyers who are also customers of their mortgage services, then this may be within the law providing that they declare this fact to their clients (the vendors).

I'm not sure that there is any case for Trading Standards to consider here unless the law itself is broken.

hechizero

courtjester wrote:

Are we not getting ahead of ourselves here ....

Whilst I agree wholeheartedly with comments regarding the moral behaviour of this particular agent, the question of legal obligation to pass on offers only occurs at the point at which an offer is made - my reading of this thread is that hechizero has not ACTUALLY made an offer ....???

Agreed, I have not made an offer. If you read earlier in this thread, my intent was to make an offer after a second viewing as ten minutes was not enough to establish enough viable information. So in that case no law has been broken. Considering no more viewings are being taken it has not been possible to be in a position to make an offer.

All hechizero has done is indicated interest in making an offer - an agent is not obliged to pass on 'interest'.....

I believe that the agent cannot refuse to pass on an offer even after another offer has been accepted - he is legally obliged to forward ALL offers made at any time onto the vendor.

My first two requests to make an offer were rejected by the agent. Only after reading a reply in this thread did I demand to make an offer due to the legality of being able to do so and was informed I could now do so.

However, I don't think there is any legal obligation to deal with any prospective buyer in the absence of an offer and if an agency feels it appropriate to fast track buyers who are also customers of their mortgage services, then this may be within the law providing that they declare this fact to their clients (the vendors).

I was informed that customers using their services would be "prioritised" after the fact, not entirely fair.

I'm not sure that there is any case for Trading Standards to consider here unless the law itself is broken.

Perhaps no laws have been broken here, I am not an expert, but I would say that this behaviour is deplorable - ethically speaking - however financially speaking - for the agency - it is heaven.

Jorgan_2

To get technical, the Estate Agents (Undesirable Practices) (No2) Order 1991 is linked to section 21 of the 1979 Estate Agents Act classes the following as undesiarable (partial list)

Discriminating against purchasers because they will not take services from you.


In my opinion, based on what the OP said in his first post, this is exactly what the EA has done.

hazeyj

If I found out that I was not told of an offer as a seller i would be v angry! Also, I would be unwilling to enter into a contract with anyone who was using an estate agent for their financial services. Reason - I was let down by three buyers (over a period of months) using the services of my estate agent and each one was refused a mortage but I wasnt told until at least three weeks after the event as the mortgage broker the estate agent used had neglected to tell the actual estate agent. He said apparently his loyalties lay with his client. despite him working in the same office as the estate agent. If I were you I would contact the owner direct and tell them of your situation. I would prob only. At worst they can only ignore you.

boom

hechizero wrote:

Secondly the manager of the branch said it was totally normal for buyers who had used their mortgage service to take priority over independent buyers and this is standard practice. He said I would have received a call at some point, but only to inform me the property was no longer avilable. I doubt that though.

The agents in this case say on their website that they are members of the NAEA. The NAEA Code of Practice, section 5b, says:

NAEA_COP wrote:

You must not discriminate,or threaten to discriminate against a prospective purchaser of your client’s property because that person refuses to agree that you will (directly or indirectly) provide services to them. Discrimination includes the following:

• Failing to tell the client of an offer to buy the property.
• Telling the client of an offer less quickly than other offers you have received.
• Misrepresenting the nature of the offer or that of rival offers.
• Giving details of properties for sale first to those who have indicated they are prepared to let you provide services to them.
• Making it a condition that the person wanting to buy the property must use any other service provided by you or anyone else.

If the facts are as you state, I'd say this is a clear break of the rules and grounds for complaint.

Thirdly he said that it was also normal procedure to only take a certain number of offers.

So he's saying that they will take only three offers and then draw a line under it... What a load of rubbish. It is in the vendor's interests to have as many people bidding as possible so as to get the best price - so why stop at three offers? Beggars belief.

Cowboys!

Jorgan_2

You can only complain to the NAEA once you have been thru the EA own complaints procedure.

courtjester

Jorgan wrote:

To get technical, the Estate Agents (Undesirable Practices) (No2) Order 1991 is linked to section 21 of the 1979 Estate Agents Act classes the following as undesiarable (partial list):Discriminating against purchasers because they will not take services from you.

Jorgan, what provision does this order make for dealing with an undesirable practice adopted by an estate agent?

Jorgan_2

Breaching the Undesirable Practices Order is a 'trigger' offence. The OFT could issue a warning to the EA or if the offence is bad enough or you have repeated an offence you can receive a prohibition order.

courtjester

A quick Google on the 1991 order has brought up these interesting examples from the OFT website:

http://www.oft.gov.uk/News/Press+releases/2006/73-06.htm
http://www.oft.gov.uk/News/Press+releases/2005/130-05.htm

Pursuing this further, I came across this rider on an estate agents listing on Rightmove:

"OFFER PROCEDURE: You should make your offer to the branch dealing with sale before contacting a bank, building society or solicitor as any delays could result in the sale being agreed to another purchaser and costs may be incurred. In keeping with the Estate Agents order 1991, we have to check into all purchasers’ financial situation before putting forward any offer to our vendor/s. Before any offer can be accepted you will need to make an appointment for us to qualify your offer. If the offer you are making is a cash offer (not related to the sale of a property) we will require proof of funds before your offer can be accepted."

Now I appreciate that it is a duty of an agent to advise vendors on the viability of any offer made, but is the above statement right??? - that they are *obligated* by the EA order 1991 to 'qualify' all purchasers BEFORE putting forward any offer - that to me sounds like a distortion of the order requirements designed to mislead buyers into believing they MUST discuss their personal finances with the agent's mortgage providers....

Jorgan_2

The Estate Agency Act clearly states that all offers should be put to a vendor as soon as possible. By trying to qualify the purchaser before putting the offer forward would cause delays. There certainly seems to be a contradiction with what you have posted CourtJester. I agree with the part about checking into the purchasers financial situation, to ensure they can afford the property, but not before putting the offer forward or forcing the buyer to see the EA's broker.

Quite often we will advise a vendor that 'an offer of £xxx,000 has been made but we have been unable to speak to the proposed buyers EA to check the chain or confirm their financial situation, subject to everything checking out as being favourable, would the seller accept the offer?'