Buying a Home in UK
This section details the potential scams and unethical practices
to beware
of when buying a property in the UK.
Categories in section: Buying a Home in UK
| Viewings to Offer | Offer to Completion |
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Agent fails to pass on my offer to the seller
Who is the Rogue?:
Estate Agent
How does it work?: There have been a number of cases where the Estate Agent had deliberately withheld a higher offer from the seller. They may have another more profitable client who is willing to use their other services like mortgages. Or they could have a friend lined up for the property or be in collusion with a property developer. How to avoid this scam?: Estate Agents are required by law to pass on absolutely all offers in writing to the seller. Make sure you ask for a copy of the offer letter. If still in doubt, try and contact the seller directly to see if they received your offer. |
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Gazumping: Seller accepted offer but then takes a higher one
Who is the Rogue?:
Seller
How does it work?: Gazumping is legal although considered unethical. It's when a seller accepts an offer from one interested party, only to then accept a higher offer later on from someone else. It can prove disastrous and financially damaging for the buyer if it happens late in the process after he's paid for conveyancing and surveys. Usually, plain old greed is the major factor in gazumping. Sometimes, the buyer can provoke gazumping by procrastinating or stalling on the deal. How to avoid this scam?: First, ask your agent if they have a contract with the seller to prevent Gazumping. Many do. You should also ask to have the property taken off the market following your offer (or at least when valuation is instructed). Make sure you get it in "writing" or it means nothing. Don't forget an estate agent is legally obliged to inform the seller of any offers he receives up until exchange of contracts. |
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Agent threatens to withold offer unless buyer uses their mortgage services
Who is the Rogue?:
Estate Agent
How does it work?: Some estate agents use high pressure sales tactics to hawk finance related services to potential buyers. They often can make more money on these services than on actually selling houses. One fraudulent practice is preferential listing when buyers are told they will have priority over other buyers if they take the financial services like an insurance or a mortgage offered by the estate agent. How to avoid this scam?: Under the terms of the Estate Agents Act 1979, Estate agents cannot discriminate and must treat all buyers "fairly". You are under no obligation to accept any financial services offered to you by the estate agent. If the Agent specifically tries to link his products to the offer, call him on it and threaten to contact your Local Trading Standards officer. |
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Agent deliberately lied about the property
Who is the Rogue?:
Estate Agent
How does it work?: Agent puts down false information about the property on the sales description or lies about a key feature of the house to convince you to buy. In particular, be wary about anything they say about planning permission or opportunities to extend the house. How to avoid this scam?: Never ever believe the agent's word. They cannot be trusted. Always get written proof. If they confirm the information in a letter, watch out for caveats like "to the best of my knowledge" etc. By law, an agent doesn't have to point out any defects or problems but must answer direct questions accurately. If not you may have a claim under the 1991 Property Misdescriptions Ac. Also make sure you have a good solicitor who'll double check everything the estate agent leads you to believe. |
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Agent puts up For Sale boards next to properties that are not for sale
Who is the Rogue?:
Estate Agent
How does it work?: The Agent will put up For Sale or Sold signs outside properties that are not for sale as a way of generating cheap publicity. This practice is known as flyboarding and gives a misleading impression of the amount of business an estate agent is doing in an area. The Agents goal is to affect the choice of potential sellers when choosing an Estate Agent to market their property. How to avoid this scam?: If you encounter Flyboarding, call the estate agent on it and threaten to contact your local Trading Standards Authority. This is an illegal practice under the Trade Description Act and carries a hefty fine. Trading standards officers have successfully prosecuted several Estate Agents in the past few years. |
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