Estate agent lied over BTL rental

Maxthebrave

Any advice please?
We were buying a flat as an investment and the agent who showed us the property quoted the rental as between 675-725 pcm. We did our research but it was a hard property to compare with few comparables on the market at the time. As the agent also did lettings we assumed the quote had come from them and although we did our figures on the lower figure just in case we were happy and the property proceeded almost to completion.
I asked the letting department of the agent to pop out to value it and two other agents with the view of finding an agent to manage the property. They all came back with the same figure of £100 lower than our original quote. The neg we originally dealt with has now left the company and the manager did apologise and said if she had heard that figure she would have corrected her. We have had to pull out of the sale as the vendor wouldn't reduce the price and we have lost a lot in solicitors fees.
An expensive mistake and lesson learnt or is there anything we can do to challenge the agent and reclaim some of the fees? They are a big well known chain. Any tips to prevent this happening in the future? A little nervous to get back out there and start again.

anselld

No, nothing you can do.
Tips? Do the same research, but before you offer and commit money to the purchase.

buggy_boy

Unfortunately estate agents seem to be like Teflon. Always remember the seller is paying the estate agent so as the buyer you cannot trust them, never take their word, recommendations, referrals, mortgage broker etc etc.

Cakeguts

No nothing and if your cash is that tight you are going to get into trouble letting property. You have got to be able to pay the mortgage on the rental property if you have no rent coming in. If then tenant stops paying rent is could be at least 6 months before you can evict them. Even if there is no rent coming in you still have to carry out repairs. So if you can't finacially manage with a property like this where the rent is £100 pcm lower how are you going to manage 6 months mortgage with no rent?

G_M

Unfortunately you failed to do proper due diligence before offering on the property.

Your business plan should have included a properly researched figure for rental income.

Next time you start up a business you will hopefully be better prepared.

kinger101

Did you get it in writing that one of their agents thought the rental valuation was too high? If so, I'd be tempted to go through the agent's complaints procedure with a threat of the ombudsman. Unlikely to succeed, but it costs practically nothing. They're not allowed to make stuff up for the purpose of advertising, and should have had a factual basis for the quoted income figure.

But it was pretty foolhardy to offer, let alone incur fees, before getting an independent assessment (or just looking on Rightmove for similar rental properties).

FBaby

You can't expect anyone to be financially penalised for giving you free advice under no contract. As you said, lesson learned, expensive but effective.

davidmcn

Sorry, you were relying on a "valuation" provided by the agent who was trying to sell the property to you?

AdrianC

Maxthebrave wrote: »

We did our research but it was a hard property to compare with few comparables on the market at the time.

I find that very hard to believe.



Just think like a putative tenant.
If you were looking for a property for around £x/mo, what does this one offer compared to others for the same price?


£575-725/mo for an entire flat is usually slap bang in the centre of the market for most areas. If there really isn't anything in that price range, then you need to ask why not. Is it a very deprived area, and that's simply way above the local going rate?

Crashy_Time

Cakeguts wrote: »

No nothing and if your cash is that tight you are going to get into trouble letting property. You have got to be able to pay the mortgage on the rental property if you have no rent coming in. If then tenant stops paying rent is could be at least 6 months before you can evict them. Even if there is no rent coming in you still have to carry out repairs. So if you can't finacially manage with a property like this where the rent is £100 pcm lower how are you going to manage 6 months mortgage with no rent?

Exactly, just stay away from BTL unless you really know what you are doing, and have the financial ability to do repairs and cover voids etc.

POPPYOSCAR

Cakeguts wrote: »

No nothing and if your cash is that tight you are going to get into trouble letting property. You have got to be able to pay the mortgage on the rental property if you have no rent coming in. If then tenant stops paying rent is could be at least 6 months before you can evict them. Even if there is no rent coming in you still have to carry out repairs. So if you can't finacially manage with a property like this where the rent is £100 pcm lower how are you going to manage 6 months mortgage with no rent?

Tenant Default Insurance can be added to a Landlord policy.