At present, there are over 2,000 estate agents across the UK, but due to the industry being unregulated, anyone can practice as an agent, leaving the sector rife with rogue traders that cost homeowners thousands of pounds each year.
Due to this lack of regulation, ‘gazumping’, the term used when a seller pulls out of a sale to take a higher offer, has been on the rise. Leaving the property market in a tarnished state of affairs.
The Government has recognised that for too long buyers and sellers have been trapped in an unregulated system, and are due to bring in a number of new policies to make it easier for people to buy their homes. This will include a requirement for all estate agents to hold a qualification, as well as the opportunity for voluntary reservation agreements.
With buying a house said to be one of the most stressful events in a person's life, research carried out by the Government found that more than 6 in 10 people who bought or sold property have experienced stress due to delays in the property transaction process.
So, until these policies are set in stone to help regulate the industry, we’ve shared how you can spot a rogue estate agent before you make any big property decisions.
What is Gazumping?
Gazumping is the term used in the property industry for when an individual makes a higher offer for a property despite an offer already being accepted by the seller, and succeeding in acquiring the property.
As a buyer you can imagine how this situation is deeply frustrating. Not only did you believe you had secured the property, but you are now out of pocket from the many transactional fees that are incurred during the house buying process.
Unfortunately for many buyers, this has been a reality in the house buying process. A recent study by estate agents Countywide found gazumping was currently at a six-year high, affecting 3.6% of purchases.
Furthermore, 36% of people have said they had been gazumped on a recent purchase, up from just 13% in 2015.
Gazumping is not only causing millions of homeowners increased stress but according to HMRC a whopping £270 million a year is wasted by consumers on residential sales and purchases that don’t complete.
This situation can be greatly improved by the tighter regulations that the Government will implement, but it can also be dramatically reduced by choosing a reputable estate agent.
Check the agent belongs to a recognised professional body
The first thing to check before using an estate agent is whether they belong to a professional organisation such as the Royal Institution of Chartered Surveyors, National Association of Estate Agents or (for Letting Agents) the National Association of Residential Letting Agents.
Any estate agent who is well-established will share these accreditations within their office and on their website.
If you cannot find them, make sure you enquire so you have a full understanding of who they are associated with, and how long they have been a member.
Are part of the redress scheme?
The redress scheme is a Government policy that protects customers of estate agents, offering a free and independent service to help resolve disputes. This enables customers the opportunity to complain to the scheme about any of the estate agents actions.
Thanks to the redress scheme, agents must cooperate with any investigation that is brought forward.
Being part of the redress scheme shows that an estate agent holds their customer service in high regard, and wants to ensure they are fully compliant with Government policy.
If an estate agent is not part of the redress scheme, it would be wise to look elsewhere for a different representative; it may mean their practices are not always above board.
Appoint a licensed conveyancer or solicitor
Throughout your home buying experience, you should have a licenced conveyancer or solicitor, in order to help you understand the legalities that are included in any contracts.
As purchasing a property is notoriously filled with jargon, it’s important that you can clearly understand the process and exactly what is being promised.
Having a solicitor is vital as they will be your first support and council should anything go wrong during the purchase.
Talking to your legal representative as soon as your property goes on the market and getting a draft sales contract and title documentation sorted is highly recommended as it means as soon as you have agreed a sale the legal process can get underway thereby reducing the time it takes and the risk of gazumping.
Look out for hidden charges
While it is easy to gloss over terms and conditions, and lengthy contracts, it is essential you go through any paperwork and understand it fully.
If you feel overwhelmed by the language used, or have any concern about what has been detailed, then requesting your solicitor to analyse the documents will ensure that you don’t fall into any traps.
Hidden fees and charges are a clear sign that the estate agent will not be supportive or transparent about your purchase. This is an obvious sign that you should consider finding a company with a stronger focus on the services they provide.
Thanks to the digital age, reviews and testimonials can now be found online, and will soon reveal other people's experience of using the estate agent.
As well as checking their website, also ensure you review any of their social profiles and even the news. You may be surprised at what you will find! Investigating thoroughly will ensure you do not get burned by rogue estate agents who do not have your best interests at heart.
If you have any concerns about finding an estate agent or wish to understand the process in more detail, contact the Maxey Grounds team today.