Estate agents conflict of interest?

Homebuyer2244

We are in the process of selling our house. Buyer viewed the property, and after negotiations an offer was made and accepted. The buyer is cash buyer and had surveys done but asked for a damp proofing specialist to complete a survey as it is an old property (no evidence of damp in the 7+ years living there) which we agreed to and left the estate agent to organise this with the buyer as we no longer lived at the property. This took 8 weeks for the estate agents to arrange and following the "damp proofing specialists" attendance it took a further 4 weeks to produce a sketchy report. The "specialist" visited the property, alone on 3 occasions which was the first red flag. The report we received was merely a few lines on an email stating "an endoscopic inspection of the sub floor revealed that the joints were subject to decay and recommended that the floor be taken up and replaced treated timber" at a cost of £4,000. This was fed to the buyer, who then asked for this to be reduced off the agreed sale price.

Completely bewildered by this, we asked the estate agent to provide a full report explaining the methods used, and findings. Which we never received, and in fact they argued that we should be accepting of this. With this, we decided to get a second opinion, we sought an independent damp proofing specialist company, who assessed the area of "concern" and not only did he question the methods used by the previous specialist, querying why they drilled through a concrete floor? his readings found no concerns and disagreed with the original findings.

We have since found out that the engineer that the estate agents sent out initially is a builder, who OWNS a separate building company which the owner or the estate agents is also an owner of. To me, this is a clear conflict of interest and we are currently stuck and unable to proceed with the agreed sale. We are now concerned we may lose this sale, as from the buyers perspective she has paid for a specialist damp assessment and the result of this would incur extra costs for her, hence why she has asked for a further reduction. However, from our perspective, the estate agents have used an engineer who they have business links with to complete the damp test, which for unknown reasons took him 3 days to do, are unable to provide a full report or justification for his testing methods. The estate agents have also messed up further by sending us the letter they sent to the buyer, with the brief outline of work they propose...which has the buyers full name and current address on...massive data protection breach! We believe there is a breach of section 21 of the estate agents act here, any advice welcome.

Hoenir

Is the buyer still interested in the property and on what basis? 

Homebuyer2244

Hi, yes the buyer is still interested and has asked for a reduction of the agreed price based on the estate agents engineers report. As far as we are aware, she doesnt know of all these issues going on in the background. 

FlyMeSomewhere79

Has the buyer seen the report from the independent survey you had done because they definitely need to see that something very wrong somewhere with the other report and the conflict of interest.

As for the data breach thing, I'm not sure where you'd stand because you'll come across your buyers information eventually, my buyers name and address was on the contracts I signed.

Homebuyer2244

Our specialist attended last week and gave us a verbal report of his findings, and have said the report will be available within a week which we advised the estate agents of. The estate agent have just responded by resending us the few lines of a "report" but on the company letter headed paper linked to the estate agents.  Which just verified the conflict of interest. We raised the concerns weeks ago with the estate agent over their inspection, but unfortunatley due to the responses we get from them we cannot be sure of what they are relaying back to the buyer. We are aware we may lose the sale of the property. Should we have known the engineer they were sending was affiliated with the agents, we would not of agreed and would of insisted an independent, impartial tester.

FlyMeSomewhere79

I'm going through my own hell at the moment of trying to push a house sale and purchase over the finish line and I completely get the frustration of never being able to directly communicate with the other party! 

It might be worth sending your new report when you get it to them via your solicitor and their solicitor and keep the EA out the equation.

DullGreyGuy

Who is paying for the original report?

Presumably your agent is getting a percentage of the sale price and as such the conflict is more that their related builders would inaccurately report no problems to maximise the sale price. I struggle to see how a detrimental report in any way benefits the agency?

eddddy

In your position, I would either contact the buyer direct to explain your concerns, or ask your solicitor to pass on your concerns to your buyer's solicitor.

Obviously, you have to make sure that you don't say anything defamatory about the estate agent - just state facts, and refer to the findings of your own surveyor.. And bear in mind that the buyer might relay whatever you say to the estate agent.

silvercar

Bottom line is the buyer wants a reduction of £4k. You can reject that and site whatever reasons you want. The buyer then suggests a middle ground or pulls out.

Homebuyer2244

DullGreyGuy said:

Who is paying for the original report?

Presumably your agent is getting a percentage of the sale price and as such the conflict is more that their related builders would inaccurately report no problems to maximise the sale price. I struggle to see how a detrimental report in any way benefits the agency?

The buyer paid for the original report. The estate agents are not taking a percentage of the sale, the fees charged to sell the property is a fixed rate, regardless of what the house sells for. The EA would benefit as they are shared owners of the building company. Securing work on the property, that according to an independent specialist isnt needed.

Schwarzwald

To the Buyer I would make available your report and them about the biased recommendation by YOUR estate agent, apologize for that but also that in your opinion there is no basis for any reduction as there is no indication of any damp or fault. Out of goodwill given it is YOUR estate agent that screwed up, you might offer the buyer a reduction out of goodwill, otherwise potentially risk losing the Buyer all together.

 

To the estate agent I would be clear that you regard his lack of transparency and attempt to screw you over as a breach of trust eroding the basis on which you are willing to continue to work with them. I probably would not want to complete the sale with them and would ask them to cease to represent you (ie cancel the EA agreement), otherwise you escalate it further, ombudsman, etc.