MSE News: Guest comment: Buyers and sellers are being ripped off by agents

Naf

So how does this relate to others' experiences:
When we found our current house available to rent, it had already been with the LA for a few months, and so the 'vetting' fees were at 'half price'; this meant they were 'down to' £75 per person. They were so desperate for interest that the very morning I phoned to enquire, they'd dropped £50pm off the rent (more fool them, we were interested anyway :-) ). The LA really didn't treat us very well during the process (from the moment they discovered we claim HB), multiple times threatening that if stuff didn't happen they'd just dump us and we'd not get our money back, despite us clearly being the only interest the property had. Because of that we ended up moving in more than a week later than they wanted, but almost three weeks earlier than we could afford (luckily our previous LL allowed us to just pay for the time, not the whole month as we'd given him loads of notice).
We told them from the outset that we would probably need a guarantor, and that we had one, and asked if we could just skip paying our credit checks and just get the guarantor in: but of course not.After our checks came back that we did need a guarantor (duh!), it needed both my parents' incomes together - another £150! (luckily they neglected to charge us this - and we literally couldn't afford to be honest about it). Both my parents are self employed, so they asked how they needed to prove their income; the LA's response was an indignant "We'll credit check you, you know!", as if somehow that would indicate their income. The LA was asked to contact the referencing company to find out, but didn't bother to do it, so a few days later was harassing us for not getting things done. I ended up calling them myself (after squeezing the info out of the LA) and got it all sorted in about 30 seconds.
We have since discovered that the LL welcomes people on HB, and has been very pleased at the free cavity wall insulation we've had put in saying that they've been waiting for people like us to move in. So why doesn't the LA bother to get to know their clients so we could have been treated better?!

A note to Stella: a campaign for LAs to treat people more fairly is something I wanted to get going a while back (when we had this experience with them); so I'd be very keen to get involved.

lynne1929

I totally agree with Stella. My Dtr & Son in law have, on top of paying as well as the owner, had to pay £100 for her and £100 for her husband for checks to be made. When they turned down a property and a few weeks later went for another they were told they had to pay the £200 again. That is disguting.

JonnyScotland

boo-hoo wrote: »

We run a Letting Agency and are also Landlords. We charge the Tenant for a Credit Check of £75 and that includes the drawing up of the Tenancy Agreement. We charge Landlords 6% of the rent. The amount of work involved with some Tenants doesn't always cover our costs. As Landlords we have had a couple of awful Tenants who left the houses in a state. This means having a month or 2 with no rental income and paying out for repairs. Not all Landlords or Letting Agents are ripping Tenants off. Whilst I accept that Tenants need protecting from unscrupulous Landlords / Agents legislation seems to be one sided and offers no protection to landlords

Couldn't agree more...We are not all the same (I run a Letting Agents) - While I agree it's a lot of money to move, it's worth reminding that it is a big financial committment, one which should not be taken lightly! As has been said, we earn every penny we make in a day's work. We are businesses who rely on such fees/charges to survive - if the Government steps in with these unfair rules it will only result in few jobs, few businesses thriving and possibly LESS selection/stock available meaning less CHOICE for tenants/buyers alike.
I agree more strict legislation would be ideal (especially for letting agents) as any man and his dog can start one up - unlike Estate Agency there is no legal requirement to be certified or accreditied e.g. ARLA.

Naf

boo-hoo wrote: »

We run a Letting Agency and are also Landlords. We charge the Tenant for a Credit Check of £75 and that includes the drawing up of the Tenancy Agreement.

That's not a reasonable price at all, especially as I'm guessing that's the per person fee? The credit check costs £10 per person, printing off a few pages & filling in the relevant details takes about 15 minutes of your time - and that only needs to be done once the credit check is passed anyway. So even including the hour (at most) this all takes someone, costs are still under £20.

My sister used to work at a Letting Agent (still does, just a different one) and it turns out her training was appalling. She genuinely has no idea (still doesn't as she won't listen to me, or legislation) that ASTs automatically become rolling tenancies after the minimum term; her 'training' has led her to believe that it is a legal requirement for tenants to come back every year, cough up more cash, and sign a new minimum term.
Clearly she's making good use of that music degree & PGCE.

Pixie5740

MSE_Helen wrote: »

Update: 25 November 2014

The House of Lords last night voted against amending the Consumer Rights Bill on this particular issue with 156 votes against the change and 113 votes in favour of it. However Stella Creasy says she will keep pushing for action to prevent estate agents and lettings agents ripping people off.

Stella also wants to hear your experiences and examples of fees charged. You can leave your comments in this forum thread.

Ah yes, the House of Lords. A house of parliament where none of the members have been democratically elected by the voting population.

Naf

Pixie5740 wrote: »

Ah yes, the House of Lords. A house of parliament where none of the members have been democratically elected by the voting population.

And where even the most moderate are totally out of touch with reality.

Wisefool

Credit-Crunched wrote: »

The referral process for estate agents need look at promptly.

It is wrong that using their in house tied advisers, inflated conveyancing and extortionate household insurance makes you a more desirable client. Even mandatory meetings with the mortgage manager before they put forward your offer.

The mortgage manager is governed by the FCA.
The Solicitor by the SRA and FCA
The valuer RICS

The estate agent adheres to a voluntary code of conduct...

Surely this is not right, they can not be trusted to act with integrity and honest, so they need to be regulated.

This is somewhat another subject, but with the common theme of ethics in the house sale industry in the UK. I have come across the following questionable practices:

- best explained by an example...an estate agent may prefer say offer A (£89k) to offer B (£90k) because buyer making offer A is willing to (or strong armed into) using their in-house mortgage service meaning the estate agent would make more commission overall by persuading the seller to accept offer A. The issue here is of course a conflict of interest. Sellers may not even be made aware of offer B in rare cases, or pressured into accepting offer A as "they are far more reliable buyers and the mortgage will go smoothly as it is all handled in house". ( a method referred to as FUD (spreading fear, uncertainty and doom) in the sales industry)

- similarly I've heard of agents will prefer buyer M whose property they are selling over buyer P who is selling using another agent. If the former sale goes through, the estate agent collects two commissions. Despite buyer P's offer perhaps being higher and more attractive to the seller, an unscrupulous estate agent may attempt to dissuade the seller from accepting P's offer or even not present offer P to the seller. There may be more than one commision involved in the one chain meaning multiple commissions.

I agree with the quoted post, a voluntary code of conduct is not sufficient when a bit of foul play such as above could result in an estate agent earning sufficient additional commission to buy a small car!