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The dodgy estate agent tactics

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There’s a joke among estate agents that they no longer sell houses – instead, they increasingly profit from mortgage broking and conveyancing services, causing buyers and sellers to lose out. “It’s all about selling mortgages these days,” said Jenny*, who has worked in the industry for 10 years at a large chain based in the South East. Jenny has come forward to blow the whistle on dodgy estate agent practices that leave customers thousands of pounds out of pocket. “They put this blind faith into their estate agent and that is being abused, pure and simple,” she said. Yahoo

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4 hours ago, leonardratso said:

i suppose they work on joe public being stupid, but surely times are changing with the internet etc, or are people just too lazy?

Nahh they work on the premise of Joe public being stupid, lazy and trusting. Every time I've approached an Agent they've mentioned (and trued to sell) their "in house services".

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My impression is that joe public thinks that being an estate agent is a special skill that has to be studied and that they couldn't possibly understand/do...just look at how many people that still pay thousands to ea simply to place an ad, do a few phone calls, and liaise with between a couple of solicitors...hardly rocket science is it?

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Over the years I've noticed that loads of (potential and actual) buyers think that the EA is there working for them and simply don't understand that the EA works for the seller.

After themselves, of course.

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When my daughter bought her first house (no BOMAD) she got a mortgage quote from their in house bloke, found exactly the same deal online for about £300 less in fees, told the in-house bloke, and he said he'd match it.  Worked well for her - whole deal wrapped up from offer to completion in 6 weeks, during which time she'd been paying through the nose for temporary accommodation, which was rather more than the mortgage. 

 

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23 hours ago, rollover said:

There’s a joke among estate agents that they no longer sell houses – instead, they increasingly profit from mortgage broking and conveyancing services, causing buyers and sellers to lose out. “It’s all about selling mortgages these days,” said Jenny*, who has worked in the industry for 10 years at a large chain based in the South East. Jenny has come forward to blow the whistle on dodgy estate agent practices that leave customers thousands of pounds out of pocket. “They put this blind faith into their estate agent and that is being abused, pure and simple,” she said. Yahoo

A friend of mine had an offer accepted on a home in the south east a few weeks ago. Luckily, he decided to pay for - what IIRC was termed a homebuyers survey - himself. If turned out that the house was a steel framed cladded home that had had cavity insulation pumped into into it. The surveyor said that the pumped cavity insulation bridged the gap between the exterior and the steel frame, risking rust and - perhaps one day - eventual collapse. The surveyor concluded that the (solid looking) home was essentially unmortgageable - no bank who knew these facts would ever lend on the home.

2 points:

1: If my friend had gone with the bank's minimal drive by survey, he may not have found this out before purchase, and ended up owning an unsellable home

2: The estate agent - when told - insisted that this wasn't a problem, and that he could find a mortgage that would cover it

Conclusion:

A: Always get a decent survey - that will only cost hundreds on a purchase price of hundreds of thousands

B: Otherwise my friend would have ended up with an unsellable home (to any future buyer who opted for more than a drive by survey) 

C: Never trust an estate agent

D: The home is still on the market - guessing that the seller & estate agent who unquestionably know these facts are hoping for a buyer that tries to save a few hundred pounds by opting for the absolute minimum survey

Edited by Guest

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https://www.theguardian.com/money/2017/sep/18/cma-fines-cartel-of-estate-agents-rate-fixing-burnham-on-sea

CMA fines estate agents cartel £370,000 for rate fixing

A group of estate agents who secretly conspired to keep their fees high to make “as much profit as possible” have been fined £370,000 for operating an illegal cartel.

The Competition and Markets Authority (CMA) said this was the second time in two-and-a-half years that it had taken enforcement action against estate agents, and this latest case raised concerns that the sector “does not properly understand the seriousness of anti-competitive conduct and the consequences of breaking competition law”.

The six estate agents, all based in the Burnham-on-Sea area of Somerset, had a meeting and agreed to fix their minimum commission rates at 1.5%, thereby denying local homeowners the chance of getting a better deal when selling their homes. Between them the agents dominated the local area: their market share was said to be potentially as high as 95%.

The CMA said it was publishing full details of the case to remind other agents to comply with the law and avoid being fined.

Penalties totalling £370,084 were imposed on five firms: Abbott and Frost Estate Agents Limited, Gary Berryman Estate Agents Ltd (and its ultimate parent company Warne Investments Limited), Greenslade Taylor Hunt, Saxons PS Limited, and West Coast Property Services (UK) Limited.

The sixth, Annagram Estates Limited, trading as CJ Hole, has not been fined as it was the first to confess its involvement in the arrangement and cooperated with the investigation.

The price-fixing cartel was formed in early 2014 when the estate agents met with each other to “have a chat about fees”.

Email evidence showed that the agents’ rationale was “With a bit of talking and cooperation between us, we all win!”. The correspondence also explained how “the aim of the meeting … will be to drive the fee level up to 1.5%” and “… it’s really important we all give it the priority it deserves (making as much as profit as possible!)”.

The estate agents took steps to ensure the minimum fee agreement was kept to by emailing each other when a specific issue arose, such as accusations of “cheating” on their agreement. Each business also took it in turn to “police” the cartel to make sure everyone was sticking to the agreement.

However, in December 2015 the CMA carried out searches of the estate agent offices and seized documents and digital material. Stephen Blake, senior director of cartel enforcement, said: “Cartels are a form of cheating. They are typically carried out in secret to make you think you are getting a fair deal, even though the businesses involved are conspiring to keep prices high.”

He added: “We have taken action against estate agents before and remain committed to tackling competition law issues in the sector.”

In May 2015 the CMA ruled that three members of an association of estate and letting agents, the association itself, and a newspaper publisher infringed competition law. That case involved the advertising of fees in the area around Fleet in Hampshire, and resulted in penalties totalling more than £735,000 being imposed.

 

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  • 293 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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