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Record Rise in Complaints Against Estate Agents

by Sarah Halloran

The Property Ombudsman received a record number of complaints last year against estate agents.   The number of complaints raised in 2010 was the most the office has received since it was first established 20 years ago.  The previous peak was in 2008.

In total, there have been 1338 new cases raised; a number which the Property Ombudsman, Christopher Hamer, said was unacceptably high especially when property transactions were well below the normal levels.  He also blamed this dramatic rise on an increase in the number of disputes involving property sales.

The number of disputes was split quite equally between letting agents (672) and estate agents (646) whilst the rest of the reported complaints were related to the management of residential leaseholds, home information packs, and problems with advertising and marketing.

Agents operating in the South East of England received the most complaints accounting for approximately 26% of the total complaints raised.

Mr Hamer has called for the Government to impose stricter measures and improved protection for landlords and tenants so they do not become a victim of the practices performed by rogue letting agents.  Letting agents, unlike estate agents, are not required to belong to an ombudsman scheme.

The figure reported by the Property Ombudsman shows a 40% rise in complaints since the office first opened its doors.  So why the sudden increase and what are people complaining about?  Quite worryingly, the Property Ombudsman has admitted it is “baffled” by the sudden sharp rise, but that one obvious explanation could be the current slump in the market.  Seasonal factors may also play a part in these figures – general business in the housing market tends to slow down during the build-up to Christmas before picking up pace again in the New Year.

Desperate times call for desperate measures and this could also be a key factor in the number of complaints raised.  Many of the complaint cases released by the Property Ombudsman cite problems with underhand marketing, issues with estate agents taking commission even when they had been dis-instructed, and issues with the small print in contracts.

However, what should become clear is that the number of successful transactions far outweighs the number of complaints and there are a decent number of estate agents who are focused on doing a good job.  It’s simply a case of avoiding those agents who take shortcuts or who fail to deliver a good service.  A good estate agent will explain their contract to you, explain the fees payable and tell you exactly how they are going to market your property.  There are of course complaints that never reach the Property Ombudsman as they have been resolved by the estate agent themselves and it’s always a good idea to raise any concerns early on in proceedings.

If you feel you do need to make a complaint against your estate agent, the Property Ombudsman offers independent, impartial and free advice to members of the public who are not happy with the services provided by their estate agent.

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9 Responses to “Record Rise in Complaints Against Estate Agents”

  1. Very interesting thanks for sharing this post.I like it.

  2. James Hall says:

    I would imagine a fair few complaints in a testing market which is currently being experienced is that agents had valued the property much higher than the price actually achieved. After all somebody is accountable for why property is currently being priced nationally at 27% more than what Halifax and Nationwide are reporting as sales prices.

  3. It would be interesting to find out more detail on why there were so many complaints regarding sales. This from TPO is a bit vague:
    “The largest single cause of complaint was communication failure between the agent and consumer (214) followed by complaints handling by agents (163) and sales details / advertising / marketing (138)” So is communication usually the issue? Strange in a time when there are less sales, you would think sales agents would be falling over each other to provide a professional service.

  4. As with the removals industry, inactivity in the housing market can expose underhand tactics. Since 2008 the housing market has been in decline so the risks for the unsuspecting home mover are greater. Like the Property Ombudsman there is a Removals Ombudsman. The percentage of removers on the scheme is much lower so the risks are greater. It goes without saying that you should always choose a company that is on an Ombudsman scheme. In addition to this it is worth finding out how long they have been on the scheme and get a report on their track record.
    All members of the National Guild of Removers an Storers Ltd are obliged to be on the scheme and abide by the conditions.
    Great info I look forward to your next post.

  5. Estate Agents (Sales) must deliver on client expectations and this is the area where they let themselves down badly. In any given area each differing Agent values high, realistically or low as a tactic given their own business beliefs. What should actually happen is a realistic dialogue with the seller as to why they believe in a particular value could be achieved (what hard evidence do they have) and a recommendation as to what price to quote.
    This should be the “core” service that must not be altered at any time. As a Surveyor talking to sellers when a buyer has eventually been found I have lost count of the times buyers complain about the behaviour of Agents on the subject of valuation and what stems from it.

  6. Peter Hendry says:

    The problem with agents tending to over-value houses at market appraisal is that they are effectively trying to hedge their bets, incase an unexpected rise in market values may transpire.
    What they are in effect doing is guarding their own reputations in a situation where, prices may start start to rise when they hadn’t actually expect them to.
    Despite this, most people would be able to guess that such a rise in house prices at this particular moment in time would, in fact, be extremely unlikely, given the lack of general affordability in the economy currently.

    I suggest that over-valuing houses to win initial instructions, is offering a service which falls far short of normal expectations. If a vendor is asking for a market appraisal from an estate agent, one would generally expect a reasonably accurate guide is given as to what that house might fetch if marketed at the present moment. If this is not being provided, vendors are in fact being wronged, and many are finding it impossible to sell their houses within their envisaged time-scales as a direct result of this.

    I am saying that this needs to be looked into urgently by Government because it is causing the housing market to stagnate, just at a time when the Government needs the market to be performing more normally.

  7. Toby Wheatley says:

    As am agent I must say that the ideal is for a sensible discussion with a potential client before being instructed as to what the client wishes to do. The seller may have a time scale, he/she might need to achieve a highish price and can wait, it could be that they are not acutally certain they want to sell at the moment but need a value to help reach a decision. Clearly inflated price quoting to obtain instructions is very unhelpful. However, the slow down in the market has meant many clients are not getting what they wait from their agent, a sale. Clients who are frustrated will often blame the agent and complaining is one way to vent ones anger. Further, it is the job of the agent to be optimistic as he/she must look for the best price achievable so, unlike a surveyor, the agent has to try an asking price as high as he/she dares because this is the only way to ensure the property is not undersold. The agent also will then spend his/her money in advertising and marketing costs to attempt to sell.

  8. this is true but not for all agents. This may happened because of market scenario at the festive season. Agents are in hurry to gain some pace to after the festive season. In some cases they have valued properties higher then they actually were. I am curious to know more about it! Would like to come here time and again for more updates.

  9. Shawn (Property Sales) says:

    This must be a big NO. Agents must take good ethics in treating a customer. The more available they are the better agent they are to their buyers and sellers. People really want an agent that is exclusive to them, someone that they feel has their best interest at heart.

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