Estate Agent - possible conflict of interest?

larrythelamb

My mother-in-law is selling a property. We've had a bit of an up and downer with the buyer regarding what she wanted left included in the substantially reduced price etc., then on friday we learned that the buyer is a friend of a negotiator at the estate agents. This is the first we've heard of it, yet the sale process has been going on for some 3 months now. We're none too happy about being told this at this stage particularly as we're a day or so away from exchange and the buyer has demanded a 5k reduction or cancellation of sale.

Looking at the property ombudsman code of conduct, the relevant paragraph (10c) states:

10c You must avoid a conflict of interest. You must disclose at the earliest opportunity in writing to your client or any
relevant third party any existing conflict of interest, or any circumstances which might give rise to a conflict of
interest.

It's the 'or any circumstances which might give rise to a conflict of interest' that makes me feel there is one. For example just how much of a 'friend' is this person?

Additionally, the agent holds a key to the property. Initially the buyer wanted every item of furniture in the house included in the sale price. My mother-in-law did not agree to this but did give prices that she was prepared to let the furniture go for. The buyer decided against this and in the interim some items have been sold whilst others will be going to other family members. Today we were told that the buyer has told the agent that furniture has been moved from the property. I'm wondering how she would be aware of this.

Anyway, it's the conflict area I'm not happy about. Could anybody confirm if there is one here? The agent, accused of such today, denies one.

Thanks

googler

Why don't you tell us why you think this is a conflict of interest?

jjlandlord

googler wrote: »

Why don't you tell us why you think this is a conflict of interest?

It's pretty clear, isn't it?

The potential buyer is a friend of the agent's negotiator... That has the potential of creating a conflict of interest, and certainly should have been disclosed to the seller.
However, depending of the number of employees this could be dealt with by making sure that the negotiator involved has nothing to do with the sale.

At the end of the day it is also for the seller to decide whether that's enough, and mostly importantly to be tough and firm in negotiation.
Aren't there any other interested parties?
If it's been 3 months discussing with that potential buyer I would tell them to take it or leave it now.

Lavendyr

I read that it's because the buyer is a friend of one of the negotiators at the EA...

casterweb

larrythelamb wrote: »

we're a day or so away from exchange and the buyer has demanded a 5k reduction or cancellation of sale.

That's a bit naughty. Your MIL could call their bluff. I certainly wouldn't agree to a 5K reduction at this stage unless I was absolutely desperate for the sale to go ahead

larrythelamb wrote: »

Today we were told that the buyer has told the agent that furniture has been moved from the property.

Told by whom?

I suppose there is a conflict of interest if the agent has been passing on confidential information to the buyer, and you can prove it. Just because an agent knows someone it doesn't necessarily mean anything underhand has taken place.

If I were your MIL I'd be more concerned about making a decision about whether to pull out of the deal because of the 5K reduction rather than getting drawn into this conflict of interest business - you can sort that out at a later date.

Concentrate on getting the right deal for your MIL should be your priority atm

jjlandlord

casterweb wrote: »

I suppose there is a conflict of interest if the agent has been passing on confidential information to the buyer, and you can prove it.

That'd not be conflict of interest but gross misconduct.

The agent works on behalf of the seller and thus should fully and only support the seller's interests. Any relationship or personal interest which could alter this can be a conflict of interest.
It does not mean that the agent will act wrongly, it means that his interests are, well conflicting... So that he should not be involved.

larrythelamb

casterweb wrote: »

That's a bit naughty. Your MIL could call their bluff. I certainly wouldn't agree to a 5K reduction at this stage unless I was absolutely desperate for the sale to go ahead




Told by whom?

I suppose there is a conflict of interest if the agent has been passing on confidential information to the buyer, and you can prove it. Just because an agent knows someone it doesn't necessarily mean anything underhand has taken place.

If I were your MIL I'd be more concerned about making a decision about whether to pull out of the deal because of the 5K reduction rather than getting drawn into this conflict of interest business - you can sort that out at a later date.

Concentrate on getting the right deal for your MIL should be your priority atm

The estate agent told my MIL via my brother in law that the buyer had informed said agent that furniture had been removed, hence the suspicion that she may have a key.

larrythelamb

Thanks for the responses thus far.

It's all a bit long winded but basically my Step FIL died in March. The property in question is their second property, a small 2 bed cottage. Initially my MIL found it difficult to go back to see the place and no furniture had been removed at all. First agent found no buyers so when the sole agency period expired another agent was sought. My Brother in law is dealing with the agents. After around a month, the 2nd agent found a prospective buyer. The woman is a divorcee apparently and made an offer 5k below asking price. MIL was happy with this. Then it got a tad confusing. We feel that the agent may have misled the buyer into thinking the house was being sold with all furnishings. MIL wasn't prepared to do this but said she would sell items and gave prices to the agent to pass on to buyer.

The buyer seemed put out by this and refused - I've a feeling that maybe the agent could have been suggesting she'd get the furniture etc. and have screwed up a little, it's just that mixed messages seem to be going back and forth.

As the buyer refused, my MIL doled out some items to family and is having some other items herself at her other house. One other large item has been sold and was removed last weekend and we've been down at other times and taken some smaller items that would go in a car. Nothing wrong with this, it's the MIL's stuff after all.

Contracts have apparently been ready for a week or so and we've wondered about the delay. Then on friday we heard that she should exchange shortly and this was when we heard about the buyer being a friend of the agent. Today via my brother in law we got this apparent ultimatum - 5k reduction or the sale doesn't go ahead. I only heard about this late on but my MIL agreed to this. Bear in mind that she's getting frustrated by the proceedings, is 75 years old, has lost her partner etc. and house insurance is up for renewal in the next week or so. Basically she's had enough but she's not happy. My view (and my wifes) is that she should have told them to poke it. Whilst she does need the money from the sale she's not desperate and she could hold out for another buyer.

Whilst my MIL has had my brother in law deal with the sale, she did get upset today and called the agent and broke down on the phone in the process. The agent said that the buyer had been through a hard time recently with the divorce etc., which angered my MIL as she'd suffered the death of her partner. She mentioned the possible conflict and the agent assured her there wasn't one. It was during this conversation that the subject of the furniture being removed came up. Oh and re the conflict, there isn't one because 'The buyer has only popped in for a coffee a couple of times'.

Personally I don't feel the agent is acting in the interests of my MIL. I do feel there's a conflict, if you have a friend working there then it's likely to influence some things and you don't know what may be said outside of the office. Plus I've a general unease about one or two things like the knowledge of the furniture removal etc. I just strongly feel it should have been declared.

As for the best deal for my MIL, well I don't think she's getting it at present but as stated, she's frustrated and wants rid. I still think 5k is too big a drop and it's a substantial amount of money that she'll need herself basically. I also agree it's a bit naughty. Despicable in the circumstances of the sale, but it's not illegal so what can you do? It's a bluff game. I'd chance it and say no but the MIL sees it differently.

Fire_Fox

Write to the manager of the estate agents expressing your concerns over both matter, no offence but try to be brief and to the point.