How you can avoid rogue estate agents

Estate agents: don't you just love them? A recent undercover investigation by the BBC hasn't helped their image. Some agents duped sellers by offering fake bids, while others were in cahoots with property developers to push flats in return for cash backhanders, says Ellen Kelleher in the FT.

Estate agents rake in about £4bn in fees a year. But they are subject to no proper regulation, official training, or mandatory complaints procedure. The consumer group Which? is lobbying for a better system. It says: "Dodgy practice has left the public exposed to the unchecked, often illegal whims of rogue estate agents."

You can claim up to £25,000 compensation through the Ombudsman for Estate Agents (OEA) if you've been badly treated by an agent. The service is free and the Ombudsman aims to resolve complaints within two to three months. But the scheme is voluntary and less than half of all agents have joined.

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The Ombudsman received about 3,000 complaints last year, ranging from misleading property descriptions to agents enticing sellers with high valuations, then lowering it once they are locked into a contract, says Sebastian O'Kelly in The Mail on Sunday.

Some sellers come unstuck over badly worded contracts: you must distinguish between "sole selling rights" and "sole agency rights". If your agent has sole selling rights, you have to pay up even if you eventually sold your house to a relative or friend.

Some agents invent rival offers to persuade a buyer to increase their price, or lie to surveyors about the value of other properties they have sold in the area. Others fail to pass offers on to a vendor in the hope of a higher offer even though it's a criminal act.

Estate agents must treat all buyers fairly, so don't trust a firm that offers you preferential treatment if you sign up for a mortgage or a survey through the agency.

Tips for dealing with agents

Sellers

• Look on property websites to get some idea of the sale prices of homes in your area. Useful property websites include Landregisteronline.gov.uk and Nethouseprices.com.
• Ask several firms to value your property.
• Use an agent that is a member of the Ombudsman for Estate Agents or the National Association of Estate Agents.
• Ask agents for details of other houses they have sold in your area.
• Ask to see your agent's database of buyers.
• Read the contract carefully.

Buyers

• Register with a number of estate agents. You can also log onto property websites such as Rightmove.co.uk.
• Give the agents a clear idea of the sort of property you are looking for and maintain regular contact.
• Keep a written record of all your dealings with the agent.
• Once you've made an offer, the agent is obliged to send it on to the vendor by letter, so ask for a copy.
• Remember: the agent is working for the seller.