Agents are reminded that an ongoing and important consultation into the future conduct of the industry is still open for responses.
In particular, the OFT draft guidance could, if accepted, make over-valuing to win an instruction a breach.
Omitting information about a property in details could also be a breach, even if the agent did not know about, for example, a public footpath, but could have found out.
The guidance also covers advertising and flyers.
The OFT’s guidance focuses on two pieces of law, the Consumer Protection from Unfair Trading Regulations, and the Business Protection from Misleading Marketing Regulations 2008.
The OFT is holding a morning workshop for agents on November 10 at their headquarters in London and is issuing an invitation for attendees.
It will be built around two main themes:
• the guidance’s coverage of the breaches, including misleading omissions, and
• its coverage of the steps that businesses might wish to take to help them to comply with the regulations.
If you would like to attend the workshop, please confirm your attendance by contacting David Hart by email david.hart@oft.gsi.gov.uk
The consultation closes on December 9.
EAT originally covered the story here NEWS EXTRA: OFT publishes new advice on how estate agents ...
%20A%20property%20tale%20for%20our%20times.png)
Comments
"PeeBee- don’t lose ya sense of humour, the speellin of grammar like gramma was intentional...! "
Yeah, right it was...
"PS "Marine fish" as opposed to what sort of fish, land fish?" No - the last "land fish" became extinct quite some time ago.
Try 'freshwater fish'...
PeeBee- don’t lose ya sense of humour, the speellin of grammar like gramma was intentional, as the fool was so wrong in his post!
Have a good weekend.
PS "Marine fish" as opposed to what sort of fish, land fish?
"Unhappy- great gramma and pointless post, again."
Ermmm... I take it you mean GRAMMAR?
Nice of you to set yourself up to be shot at, though! ;o)
(for future reference, a Gramma ia a species of marine fish...)
Unhappy- great gramma and pointless post, again.
Paul - Countrywide don't need to put any money by as they did not over value at all, its just there timing was out by a few years.
DPW you should ask Countrywide about valuations where they have put aside something like £13.5 M to pay back to lenders because the valuations they did are now too high.
Funny how as the market has dropped back lenders want refunds of differences from valuers but I bet if the reverse happened they would not be giving money to the valuers saying thanks lads here is a bonus because prices went up.
Valuers have to provide 3 comps in the same area in the last 2-3 months and that is not possible in someareas due to lack of sales then down goes the value.
The bit about "free valuations" is as stated a market appraisal yet how many times do you hear the vendor says they have gone with an agent who "valued" it much higher than you yet it was a market appraisal they got and NOT a value.
Solicitors want the details on file yet say they can not take information from an agent as they are not authorised and therefore their information is not relevant. Wait until they miss something and see the watsit hit the fan. Then they want all our non relevant information to take us to the cleaners.
When I get asked for details I refuse on the basis that the information is mine and not for them to add to their contract of sale.
How many of you have seen the preliminary enquiries where it states are the agents details correct? I tell 'em to go take a jump so they cant sue me for THEIR errors.
Caveat emptor. Which for the uneducated means let the buyer beware.
EW - Spot on with your analysis which I repeat below.
"As long as you are honest and can demonstrate price within a reasonable margin of error then why should any decent agent worry.
The only concern could be properties which are perhaps totally unique or have development potential as then costs and profits become somewhat subjective. However, the more difficult a property is to value, the less chance of someone saying you are wrong! "
It will need to be made clear to any potential buyer that the information they are obtaining from an Estate Agent (especially a spotty young one from Haart, Foxtons and alike) in respect to the potential saleability and figure to achieve on their property is only an 'Appraisal' and is not in any respect to be regarded as a valuation.
No law broken then...
And the truth will be out.
Well what a bunch of nice folk we have here?
As i have said before why value at all?
Over valuing illegal !!
How will a certain mini driving agency deal with that to gain instructions ?.
Fair play Colin, you qualified, Moron and Trev just made up silly initials , just a CON.
That’s why Trev goes for every free ad he can to attack more of the smallest worst agents to his poor "network".
So I set up any org I can use initials after me name, smarted up Moron!
Well I am an agent in the Huddersfield area, and earlier this year a Rightmove report highlighted that the town had one of the highest proportions of reduced house prices in the country - I think it may even have been second.
So, perhaps me and my competitors should ready ourselves for a visit from the boys in blue.
In a falling market, one that can turn on it's heels very quickly, how is one to truly know the value of a house until a purchaser places a bid??
Naturally, using latest comparable evidence is one way, but if the only recent sales in an area are repossessions for example, does that mean that only forced sales figures can be relied on? If so house prices need to drop even further - what is the penalty going to be for under-valuing?
As for over-valuing, it is such a difficult issue to prove without a very complicated process. It is intent and ability that define the difference between a deliberate over-valuation to gain an instruction and the simple inability of an untrained monkey to give an accurate likely sale price guide
The difference between manslaughter and murder is intent. It is provable but very costly to take to trial. IE. It wont happen often enough to be a deterrent.
EU consumer legislation has been in force for a number of years now which almost totally overrides majority of existing direct EA legislation (1979 EA Act and 1991 Prop Mis-descriptions Act)
For example, according to our local TSO (who I have a good working relationship with) agents ALREADY have a duty to disclose anything that they are aware of and have to show that they took reasonable steps to find out anything that may materially affect the sale.
Richard do not see Trevor as being misleading as he is CEO of INEA mls. He is not necessarily portraying himself as an agent but a portal for agents? I use the initials above as a DEA and I am also an agent but never upgraded from ANAEA hence I no longer use the latter but still display the certificate in the office.
"In it, the practice of ‘recommending an asking price in the market appraisal that is unrealistic given current market conditions (in order to gain the instruction)’ is specifically picked out as an example of breaking the law"
Well, if I were an honest, hard-working EA that strove to manage vendors expectations but kept getting pipped to the post by overvaluing corporates, i'd be welcoming this with gusto.
Unless, of course, your business model revolved around - ahem - over-appraising.
@allan
I like that. "Over appraised?"
@ Fun Boy Agent. Correct. So, who is talking about over-VALUATION? EAT or OFT? One or other of them do not understand that (in the main) estate agents provide MARKET APPRAISALS!
@ Fun Boy Agent
The differnce between X and Z should be no more than about 10-12% ?
A valuation:
“The estimated amount for which a property should exchange contracts on the date of valuation, between a willing buyer and a willing seller, at arms length after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion”
Appraisal:
You should get £X, you may even get £Y, lets put it on for £Z and test the market
Completely ridiculous. Agents job is to get best price for vendor. You can use all the comparables in the world but you will never be more than 80% - 90% accurate at valuation stage, because market prices fluctuate from day to day depending on the weather, economy, school holidays etc. little pockets appear in the market when a property is maybe the only one of its type for sale so it achieves 10% more than the comps would suggest, or by coincicdence all of a sudden there is an over supply situation and the house sells for 20% less than the comps suggest. I thought this government wanted less pointless nannying interference into business, this is something Yvette Cooper would come up with.
Frankly, I cant see what the issue is.
Agents who overvalue are usually exposed by good agents to erudite vendors.
If you, as a professional agent (by experience or qualification) cant offer a marketing price which is within a few percent of value and evidence this - you shouldn't be in the job. Remember, 3% either way offers a margin of error of 6%. On a £300k property, that's a range of £18,000!!
There is nothing wrong in telling a vendor what they should reasonably expect to achieve and agreeing to test the market if that is the clients wish.
Imagine a property worth £200,000 and a vendor in negative equity unless they achieve £210,000. As long as you are honest and can demonstrate price within a reasonable margin of error then why should any decent agent worry.
The only concern could be properties which are perhaps totally unique or have development potential as then costs and profits become somewhat subjective. However, the more difficult a property is to value, the less chance of someone saying you are wrong!
I once valued a house worth on paper £400k for £500k as I knew a composite scheme was being planned and this property held the key. We achieved £600K
Most RICS valuers seek assistance from agents and often seek opinion as well.
Vendors are not stupid - rarely do they not have any clue as to the value of their home - but sometimes they want to try more as they sincerely believe their property is better than the comparables for the reasons they bought it in the first place! Often - they are quite right.
Finally, as soon as you receive an offer on a property which proceeds to exchange - your defence is assured regardless of opinion.
What a waste of time! This is more than covered in PMA.
In my long life I have come across much stupidity but this is one in the top echelon. What is an 'over valuation'. Who decides how much is an 'over valuation' and how can it be policed – by the 'suits' at the OFT?.
EA's give an opinion, a personal opinion, based on their experience and knowledge of the market and also applying due diligence. It would seem that it is last part that the OFT is drawing attention to - nothing to do with an opinion as to value.
I contacted them and my e-mail bounced back saying I'm on their 'List of Compulsive Liars' and will be refused entry. :(
I don't know what the answer to competitive 'highest bidder' valuations is, but this isn't it.
It is only my opinion, but here goes.
In my view the use of terminology needs to be clear and the public need help in being educated with media assistance regarding the terminology and function in respect of the differences.
There is a huge difference between:
A CURRENT VALUATION
&
A MARKET APPRAISAL
Even solicitors guide divorcing couples to get 'free valuations' from Estate Agents to help divide the spoils.
It is wrong, totally wrong. Estate Agents in general are not providing Valuations at all, it is only a market appraisal.
Omission is already covered in PMA, but what sort of can of worms is that? The legal profession will be clapping with glee at the prospect. The definitive list of what you must not fail to omit would be so long it would be unreadable. Our job is to find a willing buyer with the funds to buy. The solicitor and buyer are responsible for checking for sunken air raid shelters, rights of way, covenants, etc, not the selling Agent.
But I can see this should apply to the 'new wave' of 'buying agent'
This looks like over complication for the sake of it. Pen pusher, do gooder heaven.
To the previous poster (no name given): this article is not about what a house is worth, it's about how an agent values it and gets the instruction. If you're not an agent, you shouldn't be on this site. Real agents need to read the OFT consultation paper as the way I read it is I think some of the proposals will make us more accountable in future. I know we don't need more compliance but I for one will be going to the OFT seminar to find out more.
This story will amount to absolutely nothing and has only been printed to get everybody into a frenzy and invite all comments such as "An agent over valued my house blah blah blah".
It doesn't take a genius to work out what your house is worth. If they don't show you comparables and their valuation is the highest, don't use them. End of.
Just because a house doesn't sell, doens't neccesarily mean it is incorrectly priced, especially in this market.
Richard. For those of us who read EAT regularly, you will know that Trevor, from the Independent Network of Estate Agents provides Multi Listing Services. Et Voila, you have initials.
Trevor - what body grants you the right to use such initials after your name? We know they are meaningless but surely such tactics to fool the public you are actually qualified or been accredited by a professional organisation is not good practice and itself should be on the radar of the OFT?
Lets vlean up poor practice.
What is more concerning is that private sellers are not mentioned. Surely reform should include the. "process" not just title of "estate agent"
There is no mention of when Mr or Mrs "Private" Seller makes a false statment. Such people looking to DIY sales to save fees, should also be open to any agents act.