Should I escalate this to The Property Ombudsman ?

Spartan_Saver

Hi guys,

I’m an aspiring landlord who made the rookie error of agreeing to pay part of a sourcing fee to an agent for an advertised £25,000 discount on a property a few months ago. The property was marketed to me at £125,000 (guide price £150,000)

To make a long story short when I viewed the property I was told by the developer that the price that was quoted to me by the sourcing company was £5,000 higher than the guide price with their main estate agent which listed the property at £145,000. The main estate agent is a well known and reputable high street franchise. In essence the £25,000 discount suddenly became a £20,000 discount which is a substantial difference.

I immediately brought my concerns to the agent and provided links to internet listings which confirmed that the current price of the property is £145,000. The agent reassured me that the listing was out of date and that the price was definitely £150,000 and that the £25,000 discount was genuine.

I felt I wasn’t being dealt with fairly. There was a discrepancy between the sourcing agent’s price and the ones that were being marketed by the main high street estate agent. In addition the developer never heard of the sourcing agent I was dealing with. It turned out that there was a chain of agents involved in this transaction and this sourcing agent had no direct links to the developer or the main estate agent. I was not aware of this either so I decided not to proceed and asked for a refund of my fees shortly after the viewing.

The sourcing agent has declined to issue me a refund. Instead they offered to pass my sourcing fee to another property transaction should I wish to consider another one of their options. However this agent is a member of the Property Ombudsman so there is an avenue to redress this situation.

After further investigation I now have evidence that the property was reduced on the date that I signed the agreement to pay part of the sourcing fee in advance before the viewing. However these documents were not e-mailed to the sourcing agent until the day after. I also made it clear that I would only proceed if I was happy with the property after the viewing. In addition I have evidence that the sourcing agent kept on providing me with the incorrect re-assurances about the property’s guide price two weeks after the price had been reduced.

I felt that the agent withheld important information. I feel I should have been made aware that they were marketing this property on behalf of another property / investment / sourcing agent as this would have influenced my purchasing decision. It is my understanding that agents must give accurate, honest and relevant information about the properties they are marketing. This was not the case with this transaction.

Luckily a lot of what I have explained has been documented via emails. However I know that if I escalate this to the Property Ombudsman and ultimately loose the case, I will also loose the option of transferring the sourcing fee to another property transaction. Should I just bite the bullet and hope that the sourcing agent finds me a suitable property or do you think I am justified in escalating this to the ombudsman with a good possibility of having my fee refunded with their decision ?

I would really appreciate your unbiased opinion on my situation.

davidmcn

I'm not familiar with these arrangements. What does your contract in relation to the fee say?

To escalate it to the ombudsman you'll first need to complete the agent's internal complaints process anyway, and it doesn't sound like you've reached that stage yet.

Spartan_Saver

Thanks for the prompt David.

We are at the first response stage. The contract says that if the purchase does not go through the fee is non refundable and can be transferred to another property transaction.

anselld

Other than the fictitious "discount" why was the property unsuitable?

You must realise that asking prices, discounts, etc are all marketing spin and should not be part of the "suitability" criteria. So what material facts about the property changed between you agreeing to pay the fee and then changing your mind?

Spartan_Saver

Thanks Anselld. I appreciate your input.

My purchasing decision was largely influenced by the "fictious" discount (rookie error) along with the fact that they claimed it was the last one left (which wasn't the case when I viewed it)

davidmcn

As far as I can see, they're offering to sell you the property for £125k and that hasn't changed. I wouldn't expect them to guarantee that they wouldn't sell to anybody else for less than £150k (and even at an asking price of £150k, it's fairly likely they would sell for £145k to anybody else). You've obviously accepted the risk that the transaction might not go through (which it might not for a million and one other reasons). So I can't see you've got much of a case.

eddddy

Spartan_Saver wrote: »

We are at the first response stage. The contract says that if the purchase does not go through the fee is non refundable and can be transferred to another property transaction.

If that's what the contract says, why do you think you should get a refund instead?

Or are you saying that the agent misrepresented something, before you entered into the contract with them?

e.g. They said they had a particular property at a particular price, and on that basis you agreed to pay them a fee, and it later turned out what they told you was untrue?

Spartan_Saver

eddddy wrote: »

If that's what the contract says, why do you think you should get a refund instead?

Or are you saying that the agent misrepresented something, before you entered into the contract with them?

e.g. They said they had a particular property at a particular price, and on that basis you agreed to pay them a fee, and it later turned out what they told you was untrue?

Yes - I feel this was the case. They advertised a £25,000 discount off the guide price (£150,000). I signed the contract on the day that the property was reduced to £145,000. I sent the contract via email the following day after the guide price had been reduced.

As they were marketing the property I feel it was their duty to know and make me aware that the guide price had changed and that the "discount" on offer now was £20,000. I did ask them to honour the advertised discount or to issue me a concession with their feel to make up for the discrepancy. Both of which they refused.

I just wanted to see if I have a case here of misrepresentation as I feel I was misled.

eddddy

Am I reading this right? Are you saying that:

• A property is on sale to everyone else except you for £145k

• The same property is on sale to you for £125k, because you've paid a fee to a property sourcing agent

That doesn't happen in the real world.

If somebody has told you that, you're being scammed.