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dipstick

Scotland Conflict Of Interests

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Just thought I'd ask if anybody has had similar problems to me.

If you don't already know, in Scotland a lot of the EA's are also solicitors, at least they act as one unit even if the notaries and sales people are in different offices.

Twice now, and I'm possibly coming up to my 3rd, I have attempted to purchase a property that was advertised privately, had my offer accepted, sent a surveyor in and then when the sellers have gone to instruct a solicitor they have happily decided to not sell to me but to use the services of that particular sol as an EA instead.

My bills so far have run into thousands and I'm at my wits end. I've got to the point where I feel I can't offer on a private sale in Scotland because the seller will be persuaded by the agent to act for them instead.

Legally, I suppose there is nothing wrong. Morally and ethically the system stinks.

I know you can't tar them all with the same brush but I'm starting to feel that the conflict of interests in the way the system is set up is all wrong particularly considering the recent price rises i.e. commission.

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Guest Guy_Montag
Just thought I'd ask if anybody has had similar problems to me.

If you don't already know, in Scotland a lot of the EA's are also solicitors, at least they act as one unit even if the notaries and sales people are in different offices.

Twice now, and I'm possibly coming up to my 3rd, I have attempted to purchase a property that was advertised privately, had my offer accepted, sent a surveyor in and then when the sellers have gone to instruct a solicitor they have happily decided to not sell to me but to use the services of that particular sol as an EA instead.

My bills so far have run into thousands and I'm at my wits end.  I've got to the point where I feel I can't offer on a private sale in Scotland because the seller will be persuaded by the agent to act for them instead.

Legally, I suppose there is nothing wrong.  Morally and ethically the system stinks. 

I know you can't tar them all with the same brush but I'm starting to feel that the conflict of interests in the way the system is set up is all wrong particularly considering the recent price rises i.e. commission.

I thought after an offer had been accepted, a gentleman's agreement was formed & neither party could pull out (stops guzzumping).

I suggest going to a CAB, to see if you can claim back your fees. Also consider getting in touch with the solicitors ombudsman, or any solicitors watchdog you can find.

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Afraid the old myth about an offer being firm in Scotland is just that. A myth.

Certain paperwork still has to be completed and in most cases either side can back out until the missives are concluded (which is like the contracts being exchanged in England).

I haven't been to CAB but did go to the Scottish Law Society but its back to the now popular theme of "if you don't have a contract with somebody you don't have any legal comeback".

I used to think the Scots system was better than ours. Don't know. They are competing on the "rubbish" scale as far as I am concerned.

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Sounds like you've been really unlucky - I don't know anyone who has purchased privately so don't know if the same has happened to others. Are the solicitors telling them that they could get a lot more money through them? Maybe you should start looking with solicitors and EA instead of private sales?

I have heard that people are delaying exchanging of missives in order to be able to pull out, but it is usuall the buyers who do so - not the sellers!

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Don't know what is happening when the sellers approach sols to conveyance for them. But do know that they end up putting it on the market with the company concerned.

One did it out right after accepting my offer and me sending a surveyor in and instructing my own sol.

Another was approached by the seller and said they would act. When my sol contacted them they said they hadn't been instructed to act but it turned out the guy who the seller had been talking to was actually the ea and not the sol!

It's not a case of buying a property via an ea or privately, it is a case of buying a home I like. If the ones I like happen to be via private sales then surely I should be entitled to feel secure that my offer wasn't going to be gazumped never mind being physically ousted out of the way by an EA because the seller had selected their agency to act in conveyancing?

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When this has happened, does your offer not still stand? Granted it's inconvenient, but could you have waited to see if any other offers were forthcoming?

Surely they wouldn't simply reject your offer and would hold on to it until other offers were received or until they decided yours was the only one going to be made?

I am no fan of the combined solicitor/EA setup here either. When I was buying I found that the EAs would offer to provide buyers with a solicitor, but I saw an immediate conflict of interest here. I was amazed that so many other people saw no problem with this. I found my own solicitor.

I think it becomes more clear all the time that what is a person's biggest purchase needs to more regulated. I guess a lot of it stems from the ancient nature of the property trading business, but it's high time for a shake-up.

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No Walker my offer was binned.

Very annoying since the seller had advertised it privately, presumably to save money in the first instance. I went in and offered over the asking which was also over what my surveyor said it was worth. Then my sol put the offer in which couldn't be officially excepted until the seller had their own sol.

They approached one and the next thing I know I got a call from them saying "If you want to put an offer in on our property then you'd better see 'so and so' agents because they've been and told us the house is worth a lot more than YOU'RE offering" and bang down went the phone.

Turns out the ea put it on for the same offers over price they'd had it on for originally and when I checked it out this weekend on nethouseprice they got 2k over what I had offered but would work out about the same when the ea's fees were off.

So good of me to pay for the surveyor that other folk could link into though wasn't it?

I could have gone via the ea and put an offer in on the closed bidding system but somehow I just didn't feel the inclination. Why should I help to push their price up further?

No matter what my own situation is I just think that having ea's and sols closely linked invites temptation when it comes to private sales such as this and the less ethical amongst them are going to pull in the sale no matter what. After all they have at least one guaranteed buyer don't they?

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I went in and offered over the asking which was also over what my surveyor said it was worth.

Are you mad?????

I got a call from them saying "If you want to put an offer in on our property then you'd better see 'so and so' agents because they've been and told us the house is worth a lot more than YOU'RE offering" and bang down went the phone.

People can be such twats sometimes. However you didn't help things by offering over the asking price (or are you referring to the "upset" price in the Scottish 'offers over' system?).

A lot of people hold up the Scottish housebuying process as a shining example of virtue and rectitude. As we can see from Dipstick's experiences this is not the case; in fact if anything their system is even more prone to exaggerating house prices rises than ours.

http://www.lawscot.org.uk/news/2005/150405.htm

http://thescotsman.scotsman.com/business.cfm?id=1385282005

Edited by IPOD

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Sorry IPOD I know it's painful to accept but the O/O is prevelant in Scotland even at the minute.

I know they are now flowing into fixed price in the larger more northerly cities but the offers over is still the only way for the other stuff. I had one sol who point blank refused to put in a lower offer as it would "damage her reputation".

To be fair to the Scots it is the English that have sent their system haywire. Before the boom the accepted norm for o/o was around 5%, you were literally talking £100's of pounds. I know somebody who bought in Caithness 3 years ago and the price was O/O 16k and she got it for 16,750 or something like.

Then the English stepped in either looking for holiday homes or buying something that appeared relatively cheap compared to what they had sold "down south". The offers going in were mental!!!

Even a couple of months ago I saw one at O/O 75k, I managed to speak to the vendor who told me "in confidence" that the ea had told him to expect in the region of 125k. Bless him he couldn't believe his luck!

But what the hell is the point in me putting an offer in then?? I have to pay a sol to do it, pay for a surveyor prior to the offer (or put the offer in subject to survey which means it is likely to be rejected) and wait a couple of weeks to see what happens. Just running up bill after bill.

Their system works if everybody sticks to the rules but it's got to the point that there is so much money involved that I don't really think anybody quite remembers what the rules are anymore!

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Dipstick, I can sympathise with your experience of the Scottish system. We had the same thing happen. The Scottish system used to be an honourable one but it appears to have changed in recent years. Unfortunately the solicitors seem to be either encouraging and or participating in buyers being gazumped. It was stated in the press over 6 months ago that The Law Society for Scotland were concerned about the increasing problem and were to instruct solicitors to expedite procedures, in order to speed up the missives.

In my case I offered 24% over the asking price (which is how the Scottish system works, it is not a tactic, it is a procedural requirement). It was verbally accepted by the seller and subsequently their solicitor. We accepted a lower offer on our property in order to progress the transaction. The seller then stalled for time as did their solicitor. Their solicitor would not move to complete the missives, and refused to take any calls from our solicitor. Another potential buyer was in the background and we were gazumped. They then gazumped that buyer with yet another buyer. Despite the fact that we had not signed our missives we could not do the same dishonourable thing to our buyer so sold with nowhere to go to. Some x months down the road we have not as yet bought and anticipate that we will be in rented accommodation, with our furniture in store, for at least 6 months. All this has been at a considerable cost, but our solicitor even discouraged us from complaining to The Law Society.

Our solicitor was useless throughout, and I don’t trust any of them anymore. I believe that they are just as bad as, or even worse than EA’s.

We still have to go through the purchase process and are at a loss as to how to avoid a repeat situation.

Dipstick, I would also be interested to know how it cost you so much.

Edited by Alba

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So sorry to hear you had trouble as well Alba. Comforting in a way though to know I am not on my own!

The costs basically arose from the fact that my sol charged for each offer she put in and also she insisted that I have a surveyors report done for each property I offered on. She wouldn't put in an offer "subject to survey" as she said it wasn't done in Scotland.

In the first half of last year I put in a lot of offers and was never anywhere near, other than the one which accepted my offer and then went to the ea.

Then I got another sol who started off the purchase on one of the private sales I mentioned (this was the one where the ea tried to take the business but failed). Then my sol said she couldn't handle it and passed me onto another notary. Still charged me though.

Then that fell through because the new sol didn't discover that the planning and Building warrants didn't match up. That sol charged me nearly 3 times the amount he said he would. Then he reduced it to twice the amount plus vat. Still arguing about it.

The last one I am at my wits end with. It has dragged on and on only to discover at the supposed settlement date that the vendors sol hadn't got some of the paper work in place. I am now into that one for 1,500k Plus surveyors fees of £500 and won't know where I stand till next week.

If you tot up all the bills plus all the surveyors fees I would think I am looking at about 8k at least up to press and no better off apart from being a lot thinner due to the worry.

I don't know about them doing surveys prior to selling. I have come to the conclusion an awful lot more needs to be in place and surveys are probably bottom of the pile. Plus I think there needs to be a lot more legislation governing both what ea's do and also what private sellers advertise.

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Dipstick, If it is any consolation to you, we are down about £11,000 at the moment plus the ongoing cost of renting and furniture storage to come over the next few months. We had two other experiences with two other offers, after the first one, of solicitors dragging their heels. We promptly withdrew our offer without arranging surveys. Your solicitor's statement that "she wouldn't put in an offer "subject to survey" as she said it wasn't done in Scotland" is in fact a lie. It is a widely accepted procedure. The only disadvantage is that should it be a closing date situation, the vendor may accept a lesser offer due to the insecurity of your offer being dependent on a survey. I think The Scottish Law Society are not really getting to grips with the problem despite their advice to solicitors. I was also rather disappointed when I mentioned the problem to some acquaintances and they did not really find it morally reprehensible. It seems the times have changed in Scotland, and you have to deal with unscrupulous vendors, whose word means nothing, and just as unscrupulous solicitors. The problem is how to arrive at a strategy to deal with the problem. As you found out the Law Society did not really want to know. They are probably just paying lip service to the problem in order to avoid legislation. Something will probably have to be done legislatively in due course, but in the interim people are getting burned. I have heard of other cases of people trying for umpteen properties then giving up because of the cost. They eventually bought from builders just to be sure of getting a property. I suppose if Scotland follows England with property price falls, and it becomes a buyers market, then the balance of power should move the other way.

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To be honest Alba I was surprised to get any response at all from my thread. I actually had started to believe I was just "unlucky". I thought I was sat here on my own.....the last person to buy a house in Scotland!

I think you are quite correct, it is the volume of money and the balance of power that both need correction and one "should" follow the other.

What I've seen in the past couple of years leads me to think that most of the professions in relation to property need a damn good wake-up call. I've rented a property via a reputable agent. They were complete swines. As was the landlord and the associated professional bodies were 2/5ths short of useless. I've slept in a car and still don't have use of a loo or sleep in a bed where I am now.

The whole system feels like it is up the creek from where I am sitting.

Don't know if you saw my other thread of yesterday evening but my sister who is also in a similar situation got a phone call to say her solicitor has been taken over by the law society and as it stands at the minute she doesn't know what has happened to 164,500k of her money.

I want a hpc but for more reasons than to see prices come down. I want all the associated professions to struggle. I want them to learn responsibility and respect and to learn how to do their job properly or go under. I want them to learn that they are not on this earth to exploit the rest of the population for their own benefit, that the world does not revolve around them, and that they are not superior in any way and that control is an illusion. It is ever shifting.

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  • 301 Brexit, House prices and Summer 2020

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      • down 5% +
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      • up 5%



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