Is this legal??

RASH

A long story but essentially we put our house up for sale for £127,000 on the advice of the estate agent. A couple of months ago there was an offer on the house of £112,500 which we turned down and the chap from the estate agent actually said "I don't blame you, it was a bloody cheeky offer and I'd turn it down too". We made it clear at that point that we would drop further but couldn't sell for less than £120,000.
Then last month we had the same £112,500 offer from another buyer and again turned it down and a different chap from the estate agent said they would up it to £115,000 and "I would advise you to take it as you wont get a better offer".
After much deliberation and because we are really struggling financially and need to sell quickly we agreed to take his advice and sell at £115,000.
The estate agent rang my wife this morning to say that the buyer would be visiting the house today with a builder to get an estimate on some work that needs doing and he said to her "Oh, by the way, I did mention that it's somebody from within our company that's buying it didn't I?"
Thinking it was strange she mentioned it to me when I got home this evening and straight away alarm bells started ringing.
I am wondering how ethical/legal it is to advise us to sell to one of their staff at a greatly reduced price and if £115,000 really is the best offer we are going to get why did they advise us to put it up for sale at £127,000.
Although we have verbally accepted the offer we still haven't signed anything but I don't know what to do for the best. I don't really want to get anyone into trouble but isn't the estate agent supposed to be working with OUR best interest in mind and not the buyer seeing as its US that's paying them?

G_M

Legal? Yes.
Ethical? No.

If you can afford to, wait a bit till they've forked out on survey fees, mortgage application etc, then say you've changed your mind, you can't afford to sell for less than.... oh... £125K?

Is this a sole agency agreement or is another agent also marketing the property? If so, stay on the market with the other agent.

If sole agency, and you don't want to wait, how long into your sole agency agreement are you? Give notice, end the contract, turn down the offer, and move to another agency.

kingstreet

Was there any disclosure of the personal interest of a member of the agent's staff at the time of the offer? Under S21 EA Act there should have been.

http://www.oft.gov.uk/shared_oft/business_leaflets/general/oft031.pdf

Declaring a personal
interest
You must reveal promptly and in writing any
personal interest you or a connected person
have in a transaction. Remember, ‘connected
person’ is very widely defined (see page 18).
If you have an existing personal interest you
must declare this in writing before you begin
negotiations.
If you or a connected person are seeking to
acquire an interest in your client’s property you
must tell the client in writing as soon as possible.
You should do the same if you or a connected
person are selling your property to the client.
You must not seek or receive a deposit for the
sale of a property in which you have a personal
interest.

In the event of complaint the OFT can issue warnings and banning orders.

DVardysShadow

G_M wrote: »

Legal? Yes.
Ethical? No.

If you can afford to, wait a bit till they've forked out on survey fees, mortgage application etc, then say you've changed your mind, you can't afford to sell for less than.... oh... £125K?

Is this a sole agency agreement or is another agent also marketing the property? If so, stay on the market with the other agent.

If sole agency, and you don't want to wait, how long into your sole agency agreement are you? Give notice, end the contract, turn down the offer, and move to another agency.

kingstreet's link makes it very clear that the fact that an offer came from a person employed by the agency should have been conveyed as part of the opening offer at the latest - and properly, this should have happened at the time of viewing.

To my mind, this is such a serious breach of duty to the client, that RASH should not feel bound to this deal. Trust has been breached to the extent that you could not expect this agent to introduce further serious viewers nor to convey any offer which came in over the currently agreed price.

I would welcome an opinion on this from a legal, but for myself I can't see that any sole agency contract should continue to term.

The only reason for letting it run would be to allow them to sting themselves on costs. This could easily happen, if OP feels the need to reflect and take advice.