FOOL'S EYE VIEW
How To Find a Good Estate Agent

By Jane Mack (TMFJane)
May 4, 2004

Last week the Consumers' Association launched a major campaign to persuade the government to regulate estate agents. It poured scorn on a recent report from the Office of Fair Trading saying its recommendations were 'woefully inadequate' and claiming that the only way to clean up the industry is through mandatory licensing.

The OFT has given estate agents two years to put their house in order but the Consumers' Association says the government needs to act now. It's demanding an immediate review of the 1979 Estate Agents Act which they say is unenforceable, leaving consumers at the mercy of untrustworthy estate agents, who earn £4 billion in fees per year from property (an average of £2,100 per transaction).

Whether the government takes any notice remains to be seen but there's no doubt that estate agents aren't terribly popular with their customers. The Association's own research reveals that:

• Only about one in ten homebuyers and sellers strongly agree that estate agents can usually be trusted;
• 70% think that estate agents frequently give misleading information about properties;
• 70% think that estate agents and property developers frequently work together to line each others' pockets; and 
• more than half think that estate agents frequently invent offers from non-existent buyers to tempt buyers to up the price.

As the organisation points out, one of the problems is that anyone can set up as an estate agent. They don't have to pass any exams or apply for a licence. They could have years of experience in the business, or just have walked out of prison with a string of convictions for fraud.

Although there is an Ombudsman for Estate Agents who can fine agents up to £25,000 in the event of wrongdoing, membership of the scheme is voluntary and only 36% of the UK's estate agents have signed up. Membership of other bodies such as the National Association of Estate Agents is also voluntary and they have even fewer powers than the Ombudsman and, in particular, cannot order payment of compensation.

The key point, for sellers then is to use an estate agent that has signed up to the Ombudsman scheme (you can find your local members on the Ombudsman's website by typing in your postcode). Apart from suing an agent through the small claims court, this is the only way to ensure you can get financial redress if anything goes wrong and members are far more likely to abide by the Ombudsman's strict Code of Practice.

Make sure you get valuations from at least three different agents. That way you're more likely to get a genuine picture of what your house should be priced at. And don't choose the agent who gives you the highest value. He could be overpricing it in order to get your custom and, besides, it's for you to agree what price the house is marketed at so, if you want to chance your arm with a higher price, you can still do this but with an agent you trust more (one that has signed up to the Ombudsman scheme, for example!).

Don't be afraid to try and negotiate a lower fee. Let them know you're considering a number of agents and that the fee will be a deciding factor. You never know your luck.

Make sure you understand the contract and the meaning of certain terms. For example:

• 'Sole selling' means your estate agent is the only one with the right to sell your house. Even if you find a buyer yourself, you'll still have to pay the agent.
• 'Sole agency' also means the estate agent is the only one with the right to sell your house but if you find a buyer yourself, you won't have to pay the agent.
• 'Multi agency' means that you can choose several estate agents to market your house but you will only have to pay commission to the one who sells it.
• 'Ready, willing and able purchaser' is a contract term that should be avoided like the plague. If the estate agent finds you a buyer and you later withdraw from the sale, you'll still have to pay him.

Check how long the contract is for. Anything over eight weeks is probably too long and if an agent can't sell your house in that time period, you might want to take your business elsewhere. Check the length of the notice period too - it's often two weeks and you can't usually give notice until the minimum contract period is over.

Make sure you ask how your agent intends to market the property and what the charges will cover. It's all very well them putting a picture of it in the local newspaper and making the property details available to prospective buyers who ask for them but a good website is a must. Don't put up with a bad photo of your house or with descriptions of it that you don't like.

And finally, about a quarter of houses sold in England and Wales are bought without a mortgage but if your estate agent tells you he's found you a 'cash buyer' make sure you establish what he means by that as they can be a little loose with the phrase these days. A cash buyer should be someone who's got the money in the bank to buy your house outright. You might find that he really means someone who is 'chain free' but that there is a mortgage involved which could hold up the transaction.

Find out more about Selling Your Home and Mortgages.