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‘Murky’ world of estate agent fees and contracts revealed by new report

The overwhelming majority of estate agents are secretive about the fees they charge home sellers, and they often have blatantly unfair contracts, according to a new report which lifts the lid on sharp practices in the industry.

March 7, 2014

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Why the Mystery? –
 is based on one of the most extensive mystery shopping exercises ever undertaken in England and Wales, by visiting over 150 websites and speaking to 45 offices.



It finds that a lack of openness by estate agents leads to homesellers often paying far higher fees than they need to, with contracts that often leave them thousands of pounds out of pocket. Disputes with estate agents is the biggest single cause of complaint to the HomeOwners Alliance.

Findings of the report include:

  • Only 2% of estate agents openly mention their fees on their website
  • 82% of estate agent websites make no mention of fees at all
  • No major regional or national estate agents make any reference to their rates or terms and conditions on their websites.
  • One third of estate agents refuse to give their fees out over the phone to homesellers. Most independent estate agents are upfront about the fees they charge
  • Two thirds of estate agents insist on doing an in-home valuation before discussing fees
  • Estate agent fees range from under 1% to 2.5% plus VAT for a sole-agency contract – a nearly threefold range in cost
  • Estate agents often fail to state whether VAT is included in their fee, despite a legal obligation to do so
  • Sharp practices in unfair contracts include:
    – hidden fees charge such as “£99 registration fee”, “marketing incentive fee” of £200, or hefty non-refundable deposits of up to £500 if the homeseller withdraws from the sale
    – the right to charge commission beyond the term of the contract with the homeseller
    – fees being charged upon exchange even if the sale falls through at completion
    – lengthy sole agency lock-ins of nearly half a year, compared to some agents that require no more than 2 weeks written notice
    – fees chargeable both to the homeseller and the homebuyer

Paula Higgins, chief executive of the HomeOwners Alliance, said: “We are shining a spotlight on a murky world. Estate agents are handling the biggest transactions in most people lives, yet they can’t give a clear upfront answer to the question, what are your fees, how much will you cost me?

Estate agents are far too secretive about the fees they charge, and too often include blatantly unfair terms and conditions in their contracts. The result is that homeowners routinely pay thousands of pounds more in fees than they need to, and too often end up in disputes with their agents, adding massively to the cost and stress of moving home.”

She continued: “Estate agents do deals every day, putting them at a massive negotiating advantage to homesellers, who often have limited experience and don’t know what they should expect or what to watch out for. If estate agents were serious about cleaning up their industry, they would be more open and transparent, ensuring a more level playing field between themselves and their customers. “

Click here for the full report




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