Estate agents complaints remain high

17 March 2009

Complaints regarding estate agents remain “surprisingly” high despite the housing market slump.

The Ombudsman for Estate Agents (OEA), Christopher Hamer, says that despite property sales dropping by up to 60% during 2008, disputes only fell by a nominal amount.

Hamer reports a 3% fall in sale disputes involving estate agents last year. “I am surprised that my workload in sales disputes has not reduced more significantly,” he says.

Meanwhile, as the rental market saw a boost from the credit crunch and frozen housing market, complaints regarding lettings agents jumped by a shocking 200% - and are set to rise further in 2009.

A whopping 1,043 new dispute cases arose last year, of which 743 were regarding property sales and 300 involved letting agents. In total, complaints are up 20% from 2007 and 78% from 2006.

Hamer suggests that people still have high expectations of estate agents, perhaps even more so considering the slow market. However, during 2008, he found in favour of the complainant in 65% more cases than the previous year, with compensation totalling more than £385,000.

The largest compensation in the 20-year history of the Ombudsman scheme was also awarded during the 12-month period, with an unnamed estate agent ordered to pay out £23,880. Staff were found to have given conflicting advice, and failed to act in the best interests of the client or negotiate effectively.

The maximum award the OEA can make under scheme rules is £25,000.

Despite the record pay-out, the majority of compensation last year was between £100 and £499 with just 18 case awarded amounts over £3,000.

Your rights when using an estate agent

* If you appoint an estate agent to help you sell your house then you will have to sign a legally binding contract. Before you sign, make sure you read the contract carefully and understand all the information within it.

* Make sure you check how long the contract runs for – it needs to be long enough to give you time to sell your property (especially in the current climate) but at the same time, beware of contracts that are too long.

* You should also find out whether you have the right to cancel the contract.

* The jargon used by estate agents can also be confusing; ‘Sole agency’, for example, means the estate agent you sign up with is the only agent with the right to sell your property. If you find a buyer yourself, then you can dodge having to pay it a fee (although you may still face other costs to cover advertising, for example). If your contract gives your agent ‘sole selling rights’ then you will have to pay the estate agent fee regardless of how you find your buyer.

* Make sure you know exactly how much you will have to pay the estate agent in fees before you sign. The total amount should include VAT.

* If you have a complaint about an estate agent, and have been unable to resolve the issue directly, then you should contact the OEA, which provides an independent service for dealing with disputes. If the estate agent is not a member of the scheme, the OEA will point you in the right direction to make your complaint.

* If the estate agent is a member of the National Association of Estate Agents, then you can also contact the trade body for help on 01926 496800.

* Since1 October 2008, people engaging in estate agency work in relation to residential property are required to join an approved estate agents redress scheme. When you sign up to an estate agent they must tell you which scheme they belong to.

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