There is growing pressure from some quarters for tighter regulation to be introduced to eliminate alleged sharp practice taking place among some estate agents.
FT publication Financial Adviser has launched a campaign calling for improved consumer protection and agents to be regulated better.
Agents seeking more financial information than needed from prospective home buyers and pushing purchasers towards their own advisers are just two examples cited of behaviour it wants to see stopped.
Data protection breaches, passing on sensitive buyer information to sellers and not passing on some offers are among other concerns raised.
Are these extreme cases or is this type of behaviour increasing among estate agents
If so do you back calls for tougher regulation for estate agents or is there another way of dealing with the issue
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Comments
There is a lot of legislation already - more red tape isn't the issue until the existing regulations are properly policed. Simply, it's very difficult for consumers to where to turn. Estate Agency has loads of regs already and hopefully lettings will follow if the Govt plans for compulsory membership of an redress scheme are passed.
Letting Agents should be the focus of new regs and consumers need to have some organisation to which they can turn rather than be passed from pillar to post.
Trading standards struggled to properly police HIPS before they were abolished. PMA was the same. I dont believe the answer is more regs, rather one body to co-ordinate the policing of the industry and with the resources to do so.
Yes it will cost money - but I think there would be a lot of Insurers who would be willing to assist with this.
Funny that - I was wondering when you decided to upgrade yourself to capital 'W'... ;o)
RR, You must be bored...so very very bored.
"The way to avoid most of these issues without enacting tougher regulations which are difficult to police, may be read in my previously published paper..."
Published WHERE, exactly
Acknowledged by WHO(M) as "the way"
Interesting fact - did you know Your Move offices don't accept instructions on repossessions managed by their own Assets management department because the fees are too low Strange but true. I know this as we have picked up 3 despite their being a Your Move office next door but one. I asked their Area Manager he he just rolled his eyes. We made 5600 out of it
"[i]There is one further issueof property,where re-possessions are not sold by the best agent in the area for the best price,as the asset managers charge agents for post-codes,and make money out of mis-fortune[/i]." How true.
I recall many examples where flats in a development adjacent to my office were given to the corporate agents whose asset management division had instructed them and who were based in a different part of London - they may have only been 2 miles away but it may as well have been another country. We were by far the most successful agent in the patch and had sold almost every flat in the block at some point. The agent concerned asked if he could use our parking space as he didn't have a local permit - then asked us the value. :D
The way to avoid most of these issues without enacting tougher regulations which are difficult to police, may be read in my previously published paper entitled "We want a functional, stable housing market.
At: http://www.property-match.co.uk/blog/2013/12/05/estate-agents/want-functional-stable-housing-market/
Many people will not recall the practices of the corporates from 1986,when LLoyds Black Horse followed by many insurance companies,eg Prudential and Royal Life,then building societies such as Halifax and Nationwide bought established agencies.
Their motive was primarilly to sell their own products,and to manage complaints they founded their own Ombudsman Scheme,The Ombudsman For Corporate Estate Agents,or O.C.E.A. as it was called.
The independents were barred,and they tackled the issues,which prevailed.
The Corporates did not dominate the market as they first planned and so they worked with the remaining independents,who continued to survive,and indeed grew.Commissions on selling Life Cover were one years premiums and more,while the clawback period was 12 months.
The Institutions,came out as suddenly as they had leeming like rushed in.
These practices of insisting that buyers met mortgage advisers who only offered one lender,or insurer now look totally flawed,but market forces stopped these practices.There were conditions that you had to take their mortgage to get the property
People were given choices,and the income to be made from offering mortgage advice has dropped to a quarter,while the time required has quadrupled,and abortive time is significant.
It is a useful diostraction to say that bad practices exist,whether in the selling or renting of property,but I believe these are minimal,yet there can be elements of dishonesty that are not identified,and cannot be controlled.
So my first reaction is there is no need.
However,having established and run a 30 branch firm,of Chartered Surveyors,through property crashes and recessions I am aware of dangers,and in training make our staff aware of issues.
A buyer,not a "connected person"will contact negotiator,(remember they want to buy for least,our role is to act for seller and get most),"what do I nee to offer".
"I will make it worth your while,if I get the property I will see you all right!"
Our staff explain that if we told him the best offer,to be fair,we would then have to tell all the others,and conduct an auction.
If you find an agent who doesn't act in sellers interests,how can you be sure if you use them,that they will get you the best price,etc
Our business has maintained a reputation for honesty,while buying and selling bring out the worst in some people,sellers who renege on sales agreed(gazump),try private deals to avoid fees,tell lies themselves.
Buyers will also lie,and the agent has an obligation to use best endeavours to ensure buyer has the money,but even then the agent cannot force them to proceed,when they change mind,or drop their offer at the last moment.
There has to be an element of diligence,but there cannot be a concret solution,even though politicians have tried,remember Sellers Packs,which slowed down market,reduced property transactions,increased the costs of selling,but with reduced supply/choice possibly increased prices,with more buyers than sellers.
Interference in market forces creates a false market,and housing is already dangerous enough threatening to bankrupt the country,with too much debt,and no chance of interest rates rising,ie money becoming available to invest in anything else,except suicidal plans such as HS2
There is one further issueof property,where re-possessions are not sold by the best agent in the area for the best price,as the asset managers charge agents for post-codes,and make money out of mis-fortune.
I believe auctions as conducted in most countries are transparent and avoid conflicts.
I am a Charted cSurveyor,and our Code Of Practice says though shall not provide inducements to receive instructions,and the same logic applies to accept/seek benefits from buyers.