Can Estate Agents Lie About Offers? The Truth Revealed...
Can estate agents lie about offers? We explore the answer, as well as what other lies an estate agent may tell a seller and what to do if this happens to you…
Selling a property isn't something you do every day, and you will want to make sure you have everyone on your side, from the buyers to your solicitors, to your estate agent…
Notice how we paused after estate agents?
This is because it is questioned whether or not estate agents are really on your side or are just chasing the commission.
Can estate agents lie about offers? Do estate agents have to tell you about offers? What other lies can an estate agent tell me, as the seller?
All good questions, which we have answered for you right here!
Can Estate Agents Lie About Offers?
The first question that may come to mind when thinking about 'can estate agents lie about offers' is whether or not it's even legal for an estate agent to lie about offers. It is generally known that genuine estate agents cannot lie about offers, as this is against most codes of conduct they follow.
Rules and Regulations for Estate Agents
Whilst it's not strictly legal for an estate agent to lie to a buyer or seller about offers, it's unlikely that you will catch an estate agent going to jail for lying about an offer, but it goes against the legitimate code of conduct estate agents should follow.
By code of conduct, we mean that most respectable estate agents will be members of a property redress scheme for estate and letting agents, with The Property Ombudsman being the most well-known and well-respected.
The Property Ombudsman membership means that estate agents must agree to a Code of Practice and if an estate agent is found to be breaking these rules, they will be penalised and expelled from the scheme.
One of the rules is that estate agents must refrain from making up or inventing details about any offer that does or doesn't exist. Estate agents must also disclose offers to the property sellers promptly and in writing. The Property Ombudsman scheme encourages estate agents to notify the potential buyer that their offer has been given to the seller.
Along with any schemes, estate agents must also follow the Undesirable Practices Order 1991. Which is a set of regulations that specify certain practices that are considered to be undesirable by the Estate Agents Act 1979. These regulations include:
Having a conflict of interest.
Engaging in coercive or collusive practices.
It is an offence to withhold an offer from a seller.
The regulations also specify that any practice that could lead to material loss, insolvency, or asset dissipation is considered unsafe or unsound.
How else can you know an estate agent is legit?
Their estate agent contract will be clear and professional. The contract will include all costs, what you should expect from your estate agent, what is expected of you as the seller, and details of any other expenses. If the estate agent contract needs to be clarified, there's likely something they want to hide, showing you they're not 'legit'.
Also, a legitimate estate agent won't be too pushy. This is because they will trust their ability, have confidence in you seeing this, and won't need to force you to choose them.
Any estate agent trying to push you to choose them to sell your property likely doesn't trust their abilities and is, therefore, a tell-tale sign that you probably shouldn't trust them.
If you want to know what questions you need to ask your estate agent to ensure they're legit, this article has got you covered.
How Should An Estate Agent Behave When There Are Multiple Offers?
When there are multiple offers on a property, there are no set guidelines, but a trustworthy estate agent should act professionally and follow some, if not all, of the following:
Check the strength of each potential buyer and report the findings to the seller.
Take instructions from the seller and, if advised, tell the potential buyers of higher offers and negotiate with them to see if they will revise their bids.
In the UK, disclosing the exact amounts of an offer to other potential buyers is not standard practice as this could create a long-winded £1 increase bidding war.
Can Estate Agents Lie About Offers Anyway?
The rules of The Property Ombudsman should make it unlikely that an estate agent will try and make an offer, as it carries many risks. However, the reality is that an estate agent may make up a phantom offer and, provided they're not caught out, no one will ever know.
An estate agent lying to a buyer about an offer carries a negligible risk, as the likely outcome will be that the buyer increases their offer to 'match' the new bid the estate agent states has been put forward.
However, an estate agent lying to you as a seller about offers carries a lot more risk, as there's a chance you may turn around and test them on it…
What to do if you think your estate agent is lying about an offer?
The best thing to do if you need clarification on whether or not an estate agent is lying about an offer is to challenge them and ask them to give written proof of the offer. This could be as simple as writing you an email with details of the offer to asking a solicitor to sign off to say the offer is genuine.
If your estate agent is reluctant to give you written proof of an offer, this is a clear sign that the offer probably doesn't exist, and you can take this forward and escalate it to someone higher up, for example, The Property Ombudsman.
Do Estate Agents Have To Tell You About Offers?
In writing, an estate agent must legally tell you about every offer. Even if the estate agent knows it's below the price you will accept, they still have to tell you the offer to allow you the opportunity to say no.
When relaying the offers, estate agents can't try to sway you towards one particular offer over another. A buyer may have committed to using an estate agent's in-house services, for example, mortgage advice or conveyancing, which may lead to your estate agent wanting to sway you towards choosing this buyer.
Estate agents also can't try to make you take a specific offer because they believe the sale will move faster, for example, if a buyer has no chain, especially if the offer is lower than you would want to accept
Even though an offer may be lower, an estate agent would want you to take it because it will allow them to get their hands on the commission fee faster.
A buyer may ask for an agreement to try and stop you from accepting other offers and these agreements are:
A lockout agreement involves a buyer paying a deposit to the seller's solicitor while the seller takes the property off the market for a set period. This will allow the buyer to get the contract signed and removes some of the risks of a competitor putting in a last-minute bid.
Good Will Agreement
A good will agreement is when both the buyer and seller pay a deposit when the offer is accepted. If either party were to pull out, the other party would get to keep the deposit money.
Can I Escape An Estate Agent Contract?
If you have signed an estate agent contract and are conscious that the estate agent has lied to you, the good news is that you can leave the contract, but it will all depend on what kind of contract you have signed.
Some warranties will offer you penalties for leaving or signing up with another estate agent, so it's essential you read the fine print of the contract even if they've given you an outstanding estate agent valuation:
Ready, willing and able purchaser
If you sign this contract, you have agreed to pay the estate agent for just finding a buyer; if you try to leave this contract, they might present you with a non-genuine buyer, and you will be liable to pay them.
If you sign this contract, you have agreed to a massive pool of possible buyers which is excellent for competitive bids, but not if you want to leave. As you've had more exposure to more buyers, the fees are much higher due to more than one agent involved in the contract.
Sole selling rights
If you sign this contract, the estate agent has exclusive rights to sell your property within a certain period; once it runs out, you can leave.
If you sign this contract, you are in the best position to leave as a sole agency will allow you to have the same rights as an exclusive selling contract, but if you find a buyer yourself, you won't have to pay the agent's finders fee.
Typical Lies You'll Hear From An Estate Agent
If you find your estate agent is lying to you, you have a few options you can take…
Estate agents aren't limited to just lying about offers; there are other lies an estate agent may tell a seller, which we have listed here for you, so you know what to keep a lookout for:
1. Lying about viewings
One lie you may get from an estate agent is that your property is trendy, leading to you having many viewings.
The reality is that the estate agent may just be booking all the viewings back-to-back to make it appear as though it's in high demand.
They may also ask their friends to come and view your property and act as though they're interested in making the estate agent look like they have done their job creating lots of interest in your property.
2. Giving you an overpriced valuation
Another lie you may get from an estate agent is that your property is worth more than it is, as a way of getting you on their books.
If an estate agent knows they're competing against other estate agents for your property, they will likely overvalue your property to encourage you to sell with them, but this will likely lead to pain down the line.
By this, we mean your house could sit on the market with little to no interest, which will only lead to an estate agent trying to get you to knock down the price.
3. Pushing a mortgage advisor
An estate agent may lie and tell you that their in-house mortgage advisor will give you the best offers and make out it's in your best interest to choose their advisor.
However, they forget to mention that this may not always be the case and that they have an interest in you choosing their advisor, as they will likely get a financial reward.
4. Lies about their experience
All estate agents have to start somewhere but what they shouldn't do is lie about their lack of knowledge.
If they're found lying about their experience, you should get yourself off the books as fast as possible because if they can lie to you about their experience, what else are they lying about?
5. Lies about offers
This is probably the main reason you're here, as you search for the answer to 'can estate agents lie about offers'.
Although they shouldn't, estate agents can and do lie about offers to make it look to you as a seller that they're creating lots of interest in your property.
An estate agent may also lie about offers so they can push you in the direction of a specific REAL provider so that they can get their hands on their commission ASAP.
How To Prepare For Any Estate Agent's Tricks
If you still want to continue down the route of using an estate agent, understanding how you can prepare for some of their tricks can save you a lot of time and money in the long run. Here are some ways to prepare or even avoid their tricks:
Research the area
By doing your research into the local market, you will be able to get a general idea of sold prices and comparable properties. It would help if you looked at how long a property has been on the market, how fast they are selling, for what price they are selling, the specific postcode they are in and the condition they are in.
Get multiple estate agent valuations
Before you settle on one estate agent, you should have at least three estate agent valuations of your property. This will allow you to make an average, and when compared to the research, you can make an educated guess on the actual valuation of your property.
Keep them from knowing your budget
If you tell the estate agent your budget, they will try to work to the maximum budget limit. This is because the higher you sell your house, the more commission they will receive.
You can only occasionally prepare for the sneaky ways of an estate agent, as they will always be coming up with new ways to make money out of you. But there are many things you can do if you do manage to catch them lying to you…
What To Do If My Estate Agent Lies
If you find your estate agent is lying to you, you have a few options you can take… You could approach The Property Ombudsman to make a complaint, and they will let you know whether or not you have a case for suing the estate agent.
Or you could leave a review and make others aware of your situation.
Reputation is a big thing to companies, and word of mouth is one of the best advertising methods they could ask for. As a result, an estate agent will quickly notice your situation so that you will get a response from them ASAP.
However, neither of these options will sell your property for you, which is what you're after.
Having said this, we have an alternative which can sell your property FAST and do it honestly and openly…
Sell to us!
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Are you fed up with your estate agents' lies? Why not give us a call or fill in our online form today to receive a no-obligation cash offer for your property, which we could have in your bank in as little as seven days!