Home sellers risk losing thousands as estate agents ‘refuse to pass on best bids’ | Personal Finance | Finance

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Some estate agents are failing to pass on all bids to home sellers potentially costing them thousands of pounds, it is claimed.

Trading Standards say a loophole in consumer protection suggests some sellers may not be getting the best price.

The problem relates to the fact that estate agents are pushing sellers to accept buyers who are signed up to partner companies, such as mortgage brokers, conveyancers and solicitors.

Many estate agents earn big commissions from these partner firms and so will push sellers toward buyers who are already signed up for these services.

The law states that agents are required to pass on all bids, but National Trading Standards say there is a get out clause.

This involves getting sellers to sign a contract that means they agree to only accept offers of a particular type, for example from buyers that have signed up to a particular mortgage broker or conveyancer.

Conditional selling – where an estate agent does not pass on an offer to a seller unless the buyer opts for their in-house services – is an ‘undesirable practice’ according to the law.

James Munro, of National Trading Standards, said: “Anecdotally, we’ve found agents can manipulate the offer process.

“One exception is if the seller says in writing that they don’t want certain offers.

“Agents get creative, shall we say, with the contracts they ask sellers to sign. We’ve seen them include lines such as ‘refuse buyers which have not been financially qualified by us’.”

Mr Munro said agents will often insist that buyers are financially qualified by an agent – even if they have already paid an independent broker and have a mortgage decision in principle.

If a buyer refuses, their offer might not be passed on. But if the seller has signed a contract only agreeing to offers which have been ‘financially qualified’, then the agent is technically not breaking the law.

Mr Munro told the Telegraph that trying to catch agents in the act and evidence the practice can feel like “whacking moles” or “nailing jelly to a wall”.

He said Trading Standards rely on buyers providing them with evidence of conditional selling.

But in many cases, buyers who opt for agents’ in-house services do not know the difference – and those that do just move on, because a rejected offer does not translate into a material loss.

For the seller, however, thousands of pounds could be at stake if some of the highest offers are not being put forward due to an uninterest in in-house services – but they would never know.

Mr Munro said: “Big corporate factories referring out like this often employ agents earning more through commission than selling houses.

“We do receive data from Citizens Advice and the redress schemes, but we ultimately rely on people feeding us information which can trigger an investigation. We only have finite resources.”

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