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BillyShears

Rics - Whistleblower

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OK, so everyone is up in arms over what has been seen on whistleblower. Foxtons might even go to the wall after the bad publicity (though I doubt it). But I think there's something that can actually be grabbed hold of to make things a bit better, perhaps permanently.

1] Estate agents were seen lying to surveyors concerning the prices that properties were sold at.

2] RICs presumably swallow these lies as otherwise we presume that EAs wouldn't 'simmer' otherwise.3

3] The lies should be obvious a few months later when true purchase prices go onto the market.

If pressure could be put on RICs to start checking sale prices claimed by agents, then this method of ramping up the market could be prevented. All RICs would have to do is store the price claims and check a random selection a few months later. Simply writing to RICs and asking whether they will take steps to make sure that they are mislead won't achieve much, but are there other agencies who can be contacted and encouraged to encourage RICs to clean up their act? Will writing to MPs help? Is there an ombudsman? How could this be done?

Any opinions/advice greatly welcomed.

Billy Shears

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Bump. OK, people may not agree that finding ways of putting pressure on RICs to make sure that they are not lied to by agents is something we can do vis-a-vis ramping of the property market. If people don't agree that this is a useful thing to do, could they say why?

Billy Shears

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Surely there simply needs to be a means of recording the actual sale price of a property and putting it somewhere safe where it can't be fiddled with but can be viewed by anyone. What about nethouseprices and things like that? Where do they get the prices from? Perhaps RICS themselves could hold a database containing all the prices.

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A better place for my post here:

Why does everyone fly the regulation flag when they don't like something?

This country is over-regulated as it is. The trouble with new regulations as well is that you have to prove that the agent has done something wrong. How is that possible for the average person?

In Australia, agents are regulated. Do you think there are any less number of stories like this? Do you think agents don't get away with naughties every day of the week?

I'll bet there are already powers to deal with every alegation shown by this program. You just need authorities who are willing to act and have the determination to enforce existing laws. IMO the problem in Britain is too many people being willing to turn a blind eye. They'd rather just turn up for work, get paid and go home.

Do you think there aren't laws that could prosecute for trying to get a 10k backhander from a developer, that there aren't laws against furnishing false bids, that distributing fake documents isn't illegal?

How would new regulations help when regulations already exist?

Instead of Tony Blair & GB writing some new set of rules, they should kick the back-sides of the authorities not enforcing the existing rules.

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It's nothing to do with stuff being over-regulated. Recording house sale proces isn't regulation, it's just record-keeping, and it it results in a fairer housing market then it's a good thing.

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And what do you suggest if it isn't recorded? How will you prove that it wasn't recorded?

It should be the law that it is recorded. Surely the land registry could have something to do with this? And I'm pretty sure the banks want to know the purchase price of a property against which they were lending hundreds of thousands of pounds. Don't they have records?

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Surveyors firms have databases of sales. Many will use nethouse prices as well. But nethouseprices has 2 problems...

(1) It is slow, taking a few months to show new data. Ideally surveyors want to know what happened last week or the week before that.

(2) It says nothing about condition, size, or whether the vendor was desparate (and took the first offer) or greedy - did get £220k but had to wait a year for a stupid buyer to get it (ie, it might have sold for £220k but really it's only worth £210k.)

Surveyors need to constantly talk to EAs to get the best up to date info. What is gold dust to a surveyor is to speak to a good local agent who can say "i sold no. 3, 3 bed, for 220k in top condition, we got a fair few viewings and a fair price. no 11 went 1 month earlier for £180k, but it was unmodernized, the third bedroom was tiny (and most buyers here want 3 doubles). No 4 sold for £190k in good condition, but the guy took the first offer to stop himself getting repossessed. I could have got him £210k if he'd given me another 6 weeeks."

But they also need to ensure that the data they are getting is correct. All data that they rely on should go on their database as well as on the valuation they have specifically used it for. And yes, they should verify a selection of that data 3 months later. And if they have been lied to then they should do something about it.

BUT ABOVE ALL, why why why do so many surveyors ask the vendor's agent for comparables when there is clearly a massive conflict of interest.

Surveyors can be sued for negligence. Relying on unverified data from the vendors agent, and not having procedures in place to monitor data quality - along with an inaccurate valuation - would seem to me pretty decent grounds for a claim if someone has overpaid.

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It should be the law that it is recorded. Surely the land registry could have something to do with this? And I'm pretty sure the banks want to know the purchase price of a property against which they were lending hundreds of thousands of pounds. Don't they have records?

But it is the law that agents pass on offers to vendors. Good agents wll put the offer in writing and have a record of that. What about the bad ones? How will you know that Joe Bloggs gave them an offer over the phone that wasn't passed on? Unless Joe Bloggs puts it in writing & drops a copy off at the vendors home, there really is no way to regulate this further.

Here in Sweden, I'm trying to buy a house right now. The agents stand there and turn down low offers to your face rather than bother to tell the vendor. But they have a different system here where most offers are expected to be above the asking price, not below it.

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Guest Winners and Losers

In Australia, agents are regulated. Do you think there are any less number of stories like this? Do you think agents don't get away with naughties every day of the week?

True, I have had Oz EA's 'buy the listing', give me a 'false offer', 'over value' and then talk me down, slag each other off etc etc. In fact I thought they were worse than UK EA's. Real used car salesmen. Being young and naive, I can now see where they have fleeced me. Starting to wonder now if my UK EA had a friend waiting to buy my house???? Anyone else paranoid? With my OZ house the agent rang me to say that a 'property developer' had put in an offer on my house without even seeing it (was I born yesterday?). It was a low offer. I said no. They said 'but he can get a brand new house for that money' - I said 'tell him to go and buy a brand new house then, wtf is he looking at my house for?'. I hate to think how many people have been conned. Sell your own house, they don't deserve your money.

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But it is the law that agents pass on offers to vendors. Good agents wll put the offer in writing and have a record of that. What about the bad ones? How will you know that Joe Bloggs gave them an offer over the phone that wasn't passed on? Unless Joe Bloggs puts it in writing & drops a copy off at the vendors home, there really is no way to regulate this further.

You do have a point, it is nothing to do with regulation. There were plenty of laws being broken on that programme...

(1) Force all NAEA members to pass ax exam on the law (they do this for new members and have for a couple of years

(2) Make being an NAEA member compulsory.

[These two things will mean it is harder to become an EA therefore you have more to lose if you are banned. And the real lazy / dodgy / thick people will hopefully be put off from doing the exam and becoming an EA]

(3) 1 and 2 will reduce the numbers of EAs and allow the ones left to raise fees, which will have the knock on effect of increasing the quality of market entrants.

(4) Every agent should expect a spot check from trading standards and / or the NAEA every 3 years. Checking files, are there notes of everything? Do the notes on file match the letters? If something is sold with only one viewing recorded, get hold of the vendor and check their version of events matches the agent's records. etc etc

Not new regulation, just try to raise standards by enforcing the ones there!

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But it is the law that agents pass on offers to vendors. Good agents wll put the offer in writing and have a record of that. What about the bad ones? How will you know that Joe Bloggs gave them an offer over the phone that wasn't passed on? Unless Joe Bloggs puts it in writing & drops a copy off at the vendors home, there really is no way to regulate this further.

But we're not talking about offers, we're talking about the actual price that the house finally sells for. Surely some database can be created that records the surveyor's report and the final selling price to give a condition+price appraisal of every house that changes hands?

Here in Sweden, I'm trying to buy a house right now. The agents stand there and turn down low offers to your face rather than bother to tell the vendor. But they have a different system here where most offers are expected to be above the asking price, not below it.

Personally I wouldn't trust an EA as far as I could throw them. If I were to make an offer on a house I'd send a copy of it, in writing, directly to the vendor. There's no way I'd trust an EA with it.

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Surveyors can be sued for negligence. Relying on unverified data from the vendors agent, and not having procedures in place to monitor data quality - along with an inaccurate valuation - would seem to me pretty decent grounds for a claim if someone has overpaid.

Technically yes…Technically a guy sued McDonalds for

Serving him coffee that was too hot, at a drive-through?

Actually cases against surveyors are rarely brought up in court.

Even rarer, are they won, and even if they win, the compensation

Just about covers the legal expenses.

I was building some case stories for you to read in a thread I

Was going to post before my computer crashed and I lost everything!

Now I can’t be bothered.

A valuation isn't worth wipping yoir a5se on!

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A better place for my post here:

How would new regulations help when regulations already exist?

Instead of Tony Blair & GB writing some new set of rules, they should kick the back-sides of the authorities not enforcing the existing rules.

How do you think existing rules could be enforced to stop the sharp practices seen on the programme?

But it is the law that agents pass on offers to vendors. Good agents wll put the offer in writing and have a record of that. What about the bad ones? How will you know that Joe Bloggs gave them an offer over the phone that wasn't passed on? Unless Joe Bloggs puts it in writing & drops a copy off at the vendors home, there really is no way to regulate this further.

Well you seem to have answered my question already and are contadicting yourself in the process given you said the authorities just need to enforce the regulations already in place! The simple answer is that estate agents are not professionals and should never be trusted.

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How do you think existing rules could be enforced to stop the sharp practices seen on the programme?

Like I said on the thread I originally joined this topic on:

--------------------------

You know, I reckon it all comes down to the burden of proof. No matter what regulation is created, there will always be a way to challenge it by requesting proof of the allegation.

One way to sort problems of corruption out across the board, across all industries and regulations, would be to create a way of protecting whistleblowers and paying them rewards of years of salary for helping deal with serious problems. An insider is who is able to provide proof. Currently there is no incentive for an insider to become a whistleblower as they just lose their jobs, can't get re-employed in their industry as their name is smeared, then end up facing armies of lawyers if the allegations are ever pursued by the authorities.

A way of helping these people to dig up the dirt & be financially protected from the consequences would be good.

-------------------------------

I stand by this suggestion, but I strongly suspect no UK govt would have the balls to do it. The problem would be that govt employees would come forward as whistleblowers which would cause them no end of problems. We the public, would discover that the govt is the most corrupt of all organisations. Imagine if MI5 & MI6 staff could blow the whistle......

As a side note, I worked in the city administering custody of pension funds. I noticed years ago that the Scottish fund managers were buying up each others funds (which blew up into a crisis years later, losing fortunes for pension funds). I raised that to my bosses as we were employed to protect the clients assets from problems created by the fund managers. That went nowehere & I was encouraged to turn a blind eye. I also saw my own bank skimming these pension funds with bad practices on foreign exchange which gave the pension funds far worse FX rates than they were entitled to. I once had to explain to a fund manager at Barclays why they'd lost 10k on an FX deal (siphoned off by my bank). I raised this with the manager of the FX dept who was all too happy to tell me how they did it & how proud they were of doing it. If the fund manager didn't like it, they should phone each FX in & agree or disagree each rate. That's what fund managers are paid for you'd think, but no, they weren't interested in protecting the clients from our practices. So I saw with my own eyes that both the Fund managers and the custodian banks are skimming the clients, not to mention the brokers as well. I would have loved to have ben a whistleblower, because I was building my (much more efficient and less open to skimming) property portfolio & had a way out of the industry.

Edited by Time to raise the rents.

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Its time to get our own back.

What about starting a website called WRONGMOVE stating the facts about the house or flat. Its previous price, how many were sold the previous year, an upmystreet crime report on the area and percentage figures on how overpriced the property is.

For example, this 2 bed dump of a flat :

http://www.rightmove.co.uk/viewdetails-110...pa_n=4&tr_t=buy

which looks nice in the picture is in a drug rehab centre and was previously sold on :

03/04/2003 28 Churchill Road, Bournemouth, Bournemouth, BH1 4ES £77,000

There were no sales in 2005 at all for this road and the asking price now is £134,950

That is an 81% markup which is disgusting and proves how agents are marking property way too high.

Any web developers out there ?

Edited by debtfree

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You do have a point, it is nothing to do with regulation. There were plenty of laws being broken on that programme...

(1) Force all NAEA members to pass ax exam on the law (they do this for new members and have for a couple of years

(2) Make being an NAEA member compulsory. NO THANKS - The NAEA is a completely ineffective trade organization and is an apologist for the industry. I have lots of dealings with estate agents. Publications from the NAEA are generally thrown straight in the bin. Agents being honest (rare but it does happen) have admitted to me the only reason they are a member is to be able to but the NAEA logo in the window and in their adverts - just in case it sways the odd vendor to favour them with the instruction. NAEA branch meetings are rarely attended by more than a dozen agents from an area which may have up to a 1000 agents in it. Make membership of the Ombudsman scheme compulsory.

[These two things will mean it is harder to become an EA therefore you have more to lose if you are banned. And the real lazy / dodgy / thick people will hopefully be put off from doing the exam and becoming an EA]

(3) 1 and 2 will reduce the numbers of EAs and allow the ones left to raise fees, which will have the knock on effect of increasing the quality of market entrants.

(4) Every agent should expect a spot check from trading standards and / or the NAEA every 3 years. Checking files, are there notes of everything? Do the notes on file match the letters? If something is sold with only one viewing recorded, get hold of the vendor and check their version of events matches the agent's records. etc etc

Not new regulation, just try to raise standards by enforcing the ones there!

Its time to get our own back.

What about starting a website called WRONGMOVE stating the facts about the house or flat. Its previous price, how many were sold the previous year, an upmystreet crime report on the area and percentage figures on how overpriced the property is.

For example, this 2 bed dump of a flat :

http://www.rightmove.co.uk/viewdetails-110...pa_n=4&tr_t=buy

which looks nice in the picture is in a drug rehab centre and was previously sold on :

03/04/2003 28 Churchill Road, Bournemouth, Bournemouth, BH1 4ES £77,000

There were no sales in 2005 at all for this road and the asking price now is £134,950

That is an 81% markup which is disgusting and proves how agents are marking property way too high.

Any web developers out there ?

That domain is gone - looks like someone had the idea in 2003 but has not developed it. I like the idea though.

Edited by Marina

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I'd like to suggest that the people behind HPC.co.uk set up a new 'sister' website with an equally catchy name that specifically deals with esate agents and people's experiences of them.

If the name is catchy enough it could become people's first port of call for getting the lowdown on EAs and any dodgy practicies.

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Surely there simply needs to be a means of recording the actual sale price of a property and putting it somewhere safe where it can't be fiddled with but can be viewed by anyone. What about nethouseprices and things like that? Where do they get the prices from? Perhaps RICS themselves could hold a database containing all the prices.

Erm, I'm aware of nethouseprices.co.uk and things like that. What I'm suggesting is that RICs should be either checking themselves, or putting pressure on their own surveyors to make double checks that the prices they are given by estate agents are correct, so that abuses of the system can be spotted and action taken.

It's trivial to check the prices. What it requires is for surveyors or their organisation to get a finger out and do it. Otherwise they risk accusations that they are aware of the abuses and complicit in them. Much as some people accuse mortgage lenders of being aware of "lie to buy" but turning a blind eye.

Billy Shears

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Surely alarm bells should start ringing for the RICS valuer when the estate agent is pressuring them to increase their valuation?

Rather than accept "simmered" valuations of similar properties from the estate agent who obviously has a conflict of interest the valuer should get comps info from a neutral source?

I suspect it is far easier to play ball than risk future instructions.

Just shows you how rotten the system really is.

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A better place for my post here:

Why does everyone fly the regulation flag when they don't like something?

This country is over-regulated as it is. The trouble with new regulations as well is that you have to prove that the agent has done something wrong. How is that possible for the average person?

In Australia, agents are regulated. Do you think there are any less number of stories like this? Do you think agents don't get away with naughties every day of the week?

This thread was meant to be about surveyors being encouraged to check that estate agents aren't lying to them (AS IF!), not regulation.

But h o l y s h i t man, everyone sees serious fraud and all sorts of other crime going on right in front of your eyes and you're saying "when they don't like something?" they suggest regulation? I can't believe that you could make such a suggestion with a straight face. There are times when regulation is a good idea and when it is a bad idea. When you have an industry completely out of control engaging in a smorgasboard of criminal activity and ruining society and the country's future, I would have thought that even you would be awake enough to see that regulation is needed in this case.

And as for the case with Australia, what is needed is effective regulation. Certainly the practice of agents lying to surveyors could easily be solve. For example if the prices of "similar" properties are cited by agents, these should be quoted on the survey form so that if they are lies, there is clear documentary evidence that this is the case. And the buyers could see it and notice if the survey was based on lies. This would make the surveyors culpable, and make them check up on agents to prevent fraud.

Billy Shears

Like I said on the thread I originally joined this topic on:

--------------------------

You know, I reckon it all comes down to the burden of proof. No matter what regulation is created, there will always be a way to challenge it by requesting proof of the allegation.

One way to sort problems of corruption out across the board, across all industries and regulations, would be to create a way of protecting whistleblowers and paying them rewards of years of salary for helping deal with serious problems. An insider is who is able to provide proof. Currently there is no incentive for an insider to become a whistleblower as they just lose their jobs, can't get re-employed in their industry as their name is smeared, then end up facing armies of lawyers if the allegations are ever pursued by the authorities.

In this case a simple law change saying that when prices of "similar" properties are quoted are used to validate a price on a survey, that the houses and prices should be quoted on the survey given to buyers. That'd make cheating of that sort much more difficult.

As for the fake offers. It could be made law that all offers must be passed on and must include the name and contact details of the person making the offer. Not watertight by any means, but would make things a little bit more difficult. Of course the solution to the "fake offers" problem is to sell houses on a website where offers are made via a form and sent straight to the vendor by email. Oh, isn't there a "light" property sales website already. If I was the owner of that service I'd do some blitz advertising right now. "Worried about fake offers, of offers not being passed on? Sell your house with us, and you can sell your house from £70." And so on.

Billy Shears

Personally I wouldn't trust an EA as far as I could throw them. If I were to make an offer on a house I'd send a copy of it, in writing, directly to the vendor. There's no way I'd trust an EA with it.

What would you do if the EA refused to give you contact details? And the house was not occupied or occupied by tenants?

Billy Shears

And what do you suggest if it isn't recorded? How will you prove that it wasn't recorded?

Make it compulsory to list houses selling at comparable prices in the survey itself. Therefore if "high valuations" are not recorded in the survey, then the surveyor carries the can for a high valuation not backed up by documented evidence. I'm willing to be that while surveyors may want to turn a blind eye to what is happening, they don't be the one made responsible by the paper chase.

Billy Shears

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I have to agree with TTRTR on this one. I think the problem is with enforcement. What those Foxton agents were doing was ILLEGAL. If one of the largest agents in the country is acting so badly then what difference is another toothless regulatory body going to make?

More generally. A lucrative sales job will always attract a percentage liars, cheats and generally dodgy people, just like the police force will always attract a percentage of authoritarian nutters. It doesn't mean all agents/ policemen are dodgy, it just means that they are the sort of jobs that attract those sorts of people.

Seeing as a house perchase is probably the most important purchase of most people's lives, it is disgraceful that so little enforcement seems to take place.

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But they also need to ensure that the data they are getting is correct. All data that they rely on should go on their database as well as on the valuation they have specifically used it for. And yes, they should verify a selection of that data 3 months later. And if they have been lied to then they should do something about it.

BUT ABOVE ALL, why why why do so many surveyors ask the vendor's agent for comparables when there is clearly a massive conflict of interest.

I believe that surveyorss ask the vendor's agent for comparables when there is clearly a massive conflict of interest because they're prepared to play the game, but want to avoid responsibility if things go tits up. As it is, a surveyor prepared to turn a blind eye to fake valuations gets business. If they later get sued then they can turn around and blame the estate agent. And it will probably be possible to identify fake "comparables" at that point, allowing all the blame to be put on the estate agents, who can then blame a rogue agent on the shop floor and waffle on about their procedures in place to make sure that this does not happen again.

Billy Shears

I have to agree with TTRTR on this one. I think the problem is with enforcement. What those Foxton agents were doing was ILLEGAL. If one of the largest agents in the country is acting so badly then what difference is another toothless regulatory body going to make?

More generally. A lucrative sales job will always attract a percentage liars, cheats and generally dodgy people, just like the police force will always attract a percentage of authoritarian nutters. It doesn't mean all agents/ policemen are dodgy, it just means that they are the sort of jobs that attract those sorts of people.

Seeing as a house perchase is probably the most important purchase of most people's lives, it is disgraceful that so little enforcement seems to take place.

The regulatory body needs to have teeth then. Not many people like having the licence revoked if they then have to find another job or their business is closed down.

Changing the method of regulation might also make the existing rules easier to enforce. It could be something as simple as RICs informing its members that failure to review comparables given by agents is grounds for expulson, and then spot-checks.

Billy Shears

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This all seems quite simple, I'm not really sure why there needs to be a debate. The valuer should check the 'comparables' against the land registry figures as soon as they are available. If there is a ever discrepancy they should never trust that EA's comparables. It's not rocket science, it's just called doing the job properly.

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  • 301 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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