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Special Report
Part 1:
1. Why do estate agents sell homes for an average of 3.7% less than they are worth?
2. Just how expensive are estate agents, really?
3. Why do estate agents deliberately overvalue homes (before they undersell them)?
4. Why do estate agents take 50% longer to make a sale than private sellers do?
5. How much poorer will using estate agents make you in retirement?
6. What are the other hidden costs of selling through an estate agent?
Part II: The 7 Things to Look For When You Sell
Methodology
1. Why do estate agents sell homes for an average of 3.7% less than they are worth?
2. Just how expensive are estate agents, really?
3. Why do estate agents deliberately overvalue homes (before they undersell them)?
4. Why do estate agents take 50% longer to make a sale than private sellers do?
5. How much poorer will using estate agents make you in retirement?
6. What are the other hidden costs of selling through an estate agent?
Part II: The 7 Things to Look For When You Sell
Methodology
6. What are the other hidden costs of selling through an estate agent?
There are many non-financial costs, but high on the list come dissatisfaction (maladministration, excessive fees and inaccurate sales particulars are the top three complaints), stress and frustration at not being kept informed and lack of trust.
Record complaints
For example, figures released by the Ombudsman for Estate Agents show that complaints about estate agents rose from 5,500 in 2004 to 11,201 in 2008. That's a doubling of complaints in just four years. When you realise that in 2008 the number of completions was barely half the number in 2004 (Land Registry figures) this doubling of complaints becomes even more appalling.
(Ombudsman for Estate Agents)
Despite this rise in complaints Malcolm Coles, commenting as editor of Which?, states that: "The current consumer protection system is hopelessly ineffective and allows rogue estate agents to get away with daylight robbery."
Another Which? survey revealed that 50% of sellers using estate agents were unhappy with the service they received.
Withholding information
A 21 month investigation by the Office of Fair Trading found the most common complaint from sellers was that estate agents failed to keep them informed about all offers made by potential buyers.In some cases this was because the property had been “ring-fenced” so it could be sold later for less than it was worth, either to a developer (in exchange for a back-hander), or to a relative or friend of the estate agent. As you would imagine, this practice is completely illegal.
Lack of trust
Another critical issue when dealing with estate agents is lack of trust. According to a YouGov poll, commissioned by ITV's Tonight programme, 64% of people do not trust estate agents, 77% think they are more interested making a profit than in their customers and 54% think they have a reputation for being dishonest.Similarly, research by More Than revealed that 69% of people are not comfortable letting estate agents show people their homes when they are not present.
Yet, despite all these problems, absolutely no qualifications are required to become an estate agent. And while a regulatory body for estate agents does exist there is no legal requirement to belong to it or to be bound by its minimum standards.
BBC Whistleblower documentary
For a truly shocking account of estate agents’ practices visit the BBC News website and read about the undercover investigation for BBC One’s Whistleblower documentary shown in March 2006.Meanwhile ...
... estate agents’ annual revenue has more than tripled from an estimated £1.75 billion in 1997 to £5.3 billion in 2007 (HMRC, ONS, Land Registry and Countrywide plc).
