Rebecca Marsh, TPO, stated that consumers are becoming more aware of the options available if they can’t resolve a dispute with a property business and are increasingly demanding justice.
Vendors most dissatisfied
Sellers were much more likely to raise a complaint, making up 70% of the total. 61% were upheld in the consumer’s favour, with the average award more than doubling from the previous year to £745.
The report asserts lower stock levels increase the competition between agents, fuelling seller concerns around valuations, and making buyers more likely to worry about handling offers.
Undesirable practices
If an estate agent or sales rep pressures or incentivises a customer to use their mortgage broker, financial adviser, solicitor, or in-house services - for example by giving the impression that their offer will only be considered, or that the sale will go through more quickly if they do this - it is considered, conditional selling.
This practice is banned by regulations under Section 3 of the Estate Agents Act 1979 which states that every offer must be passed to the seller within two working days of receipt. Furthermore, agents must not discriminate against a buyer by misrepresenting their offer to the seller or passing it on less quickly than others.
Exerting pressure on buyers
TPO shares an example of an upheld complaint where the buyer had rejected the services of an in-house broker due to the £695 fee. They claimed that the agent told them that the sellers would only agree to accept their offer if they used the in-house services, as it would make the sale of the property ‘easier’. The buyers felt they had no choice but to agree to use the in-house broker and pay the fee.
The Ombudsman supported the complaint and considered that the circumstances merited an award of compensation reflecting the avoidable aggravation and inconvenience caused to the buyers.
Propertymark best practice guidance
Both buyers and vendors must be served with full transparency throughout the entire transactional process. Under current laws, agents must always forward subject-to-contract offers from prospective buyers to vendors regardless of their chosen financial arrangements to purchase.
There are robust codes of conduct issued by both Trading Standards and TPO which whilst requiring agents to confirm the financial abilities of the purchaser as part of the overall process also set the framework to ensure best practice. Whilst sellers will also want confirmation that a buyer has the necessary funds to complete the purchase agents should never insist only certain brokers or their in-house broker must be used for the mortgage application.
The final decision for the buyer’s choice of adviser should always remain with them once the affordability has been confirmed.
Sales Protocol Toolkit
The toolkit offers huge potential to speed up transactions, reduce fall-through rates and comply with Consumer Protection Regulations.
