14 Jul

Estate agents warned over fixed fees

Estate agents warned over fixed fees

The ombudsman for estate agents has warned those working in the profession to ensure they are open and transparent if they opt for a fixed fee approach to commissions rather than the usual percentage of the sale price.

Christopher Hamer noted that he has recently seen a number of cases where an estate agent has opted for a fixed fee but not explained this adequately to the customer.

In addition, in situations where the property has been overvalued either carelessly or deliberately and sells for significantly less than the asking price, the agent has an unfair advantage by asking for a fixed fee.

He therefore advised that "the property valuation must always be supportable but reflect the market situation and the fee must be openly described as fixed irrespective of the price finally achieved for the property".

In related news, the Office of Fair Trading recently approved an estate agents redress scheme, allowing the secretary of state for business enterprise and regulatory reform to make an order requiring all UK agents dealing with residential property to join an approved scheme.
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