Interesting article from the Property Ombudsman

Homebuyers face same risk

as buyers of private cars

Changes to laws governing estate agency in Britain could see some homebuyers with no more protection than if they were buying a car in a private deal.

That’s the warning from The Property Ombudsman, Christopher Hamer, who says the Government, which is not prepared to make any attempt to change the Estate Agents Act to protect landlords and tenants, was now moving with unfamiliar speed to remove protection from homebuyers.

Under law changes proposed by the Department for Business, Innovation and Skills, intermediary websites that advertise properties for private sellers, and can offer “For Sale” boards making them look like genuine estate agents, would be exempt from the provisions of the Estate Agents Act 1979.

In effect, homebuyers would be entering into an entirely private arrangement with the seller, introduced by a website that would not be able to offer any type of help or advice with marketing or negotiations in order to remain within the constraints of the new rules.

“Just like a purchase of a second hand car on a private basis, there is the possibility that the buyer could be led to believe what they are buying is in a certain condition only to find out later that significant work is needed,” said Mr Hamer.

Simultaneously, the Government is also planning to repeal the Property Misdescriptions Act (PMA) that forces estate agents to ensure promotional material they use accurately describes property for sale. Instead, the Government intends they should be covered by the Consumer Protection from Unfair Trading Regulations (CPRs), which Mr Hamer says are intended more to apply to general retail sales.

Intermediary websites will be exempt from the PMA until it is repealed, probably next October. Adherence to the CPRs will only be proportionate to the level of service that intermediary websites offer which, in effect, mean that the CPRs will offer little protection to the consumer. Mr Hamer believes consumers will have difficulty understanding the nature of some of the businesses they deal with, little realising that they have no comeback against these intermediary websites should things go wrong.

“The changes to the EAA mean that intermediary websites are outside it and will therefore not have to offer any form of redress through one of the two approved Ombudsman schemes that all residential sales agents have been compelled to join since the Consumers, Estate Agents and Redress Act came into force in October, 2008,” explains Mr Hamer.

“I am also unclear as to how the intermediary business will be policed and how the possibility of such businesses crossing the line into full estate agency will be monitored.

“I am surprised that the Government has taken such steps. I, along with many other organisations, expressed a strong view that any changes to the EAA should bring about a tougher regime by way of the obligations placed on letting agents. The current economic climate has seen, and will see, more consumers moving into the private rented sector where significant amounts of money are being passed over.

“Despite strong evidence that consumers are at risk, the Government has claimed that regulation is not a priority.”

The consultation by BIS closed on August 10 and detailed changes to the legislation were announced in little more than a month, on September 13. Mr Hamer and Gerry Fitzjohn, deputy chairman of the company that provides the scheme, both made submissions to BIS highlighting potential detriment for consumers in the proposed legislative changes.

Mr Fitzjohn said the Government’s aim was stated as opening up estate agency to more competition and to make it easier for businesses to enter the arena.

“With 14,000 estate agencies already in existence, according to Government figures, there was little apparent difficulty in entering the industry already,” added Mr. Fitzjohn.

“These changes do nothing to enhance the experience for consumers, who will have difficulty understanding whether they are dealing with an estate agency covered by the demands for redress or an intermediary website that is outside the scope of every regulation.

“It may be a winning solution for people who want easy entry to the property sales arena but it’s a backward step because it puts every consumer potentially at much greater risk through lack of advice and the inability to seek free-of-cost redress via The Property Ombudsman when things go wrong, as I believe they inevitably will.”

Click the link for the complete response from Christopher Hamer:

http://www.tpos.co.uk/downloads/TPO%20response%20to%20amends%20to%20the%20EAA%20and%20proposed%20repeal%20of%20the%20PMA.pdf

Research before signing for a mortgage!

A personal finance expert at uSwitch, Michael Ossei has advised property owners to research their options before signing a mortgage deal.

His advice was given in a response to Santander raising their standard variable rate (SVR). Mr Ossei described the announcement as a blow to UK property owners.

He commented on houseladder.co.uk that: "Any homeowners worried about their mortgage payments should make sure they do their homework to make sure they get the best deal possible to suit their needs."

Local estate agents with their own Independent Financial Advisors (IFAs) are a great place to find the best mortgage deals. They offer expertise on the local property market and can help property owners to search through mortgage providers and deals, giving an individual assessment and answering any questions that may arise.

If your thinking of moving and need independent advice, call Your Home 7 days a week on 01522 620 510 to arrange an appointment with one of our approved Mortgage Advisors, or visit our office at 140 Burton Road, Lincoln, LN1 3LW. http://www.yourhomeproperty.co.uk/about-us

Property Transactions with the mentally impaired

Buying and selling a property can be a stressful experience for even the most relaxed and informed of people, but for those with learning difficulties or suffering from some form of mental impairment it becomes an almost insurmountable task.  For the agent it also presents a wealth of problems and to an extent, ethical questions in itself.

Over the past 3 months at YourHome we've been dealing with a client who suffers such difficulties. As far as equity is concerned they have a lot having inherited the property, and require only a very small mortgage.  The transaction in itself should be a simple one, however the condition of the seller has thrown up a number of questions.

To get help with the financial side of things from social services the person with the problem has to ask for the help, it cannot be imposed upon them.

The person however does not have the mental faculty to know that they need financial help, and that in itself cannot be established until someone has looked at their accounts. A catch22 situation.

The client, unable to read or write, is also unable to make sense of important documents and in order for somebody to look at their accounts has (in this case) handed over everything in the hope we can make sense of it.  This in itself leaves them vulnurable to identity theft. With information we previously held, less trustworthy individuals could have easily conned such a vulnurable individual into signing over their entire house and endowment policy and they'd have been none the wiser.

The questions we have asked have been;

Should there not be a social services system authorised to look after the affairs of such vulnurable people prior to them handing over information to relative strangers who could take advantage of them? If an agent encounters such a person, should there not be an obligation to immediately refer it to a social services department capable of dealing with property sales for those with mental disabilities?

The client is known to social services so how is it that they can end up dealing with this on their own?

In a targets driven industry is it right for an agent to charge a person with a disability significantly more to make up for the additonal time and effort involved to see the transaction through to completion?

Should there be a seperate party involved looking out for the specific well being of the person in question?  Okay, yes we are a trustworthy agency and have ensured a good price has been achieved for the property, but what if we were not, and had decided to aquire the property ourselves at 90% below the market value knowing we could sell it on for thousands more and make 60 times the fee? Who would have been looking out for them in that scenario?

It is our opinion from this experience that there is no clear process in place within social care for dealing with this sort of situation and it leaves vulnurable people open to being taken advantage of, potentially losing their home, savings and security.

Where are the weirdest buildings or hidden gems in Lincoln?

Apparently several years ago Monks Road got voted one of the top ten weirdest streets in the country for its blend of shops, houses, educational establishments, churches, parks and other quirky bits!  Steep Hill has just been voted the best street in the UK for its architecture and the way in which careful planning control has kept the character of the road over the centuries.  But what about the houses themselves.  There's probably none quite as wondefully bizarre as the piano house below, but if you've got any pictures of some, please share.

...

Why the cheaper agent sells quicker

The adage that you get what you pay for often rings true, ask anyone whose ever bought cheap beer...it generally comes with a totally free severe headache and a night on the tiles. Going for a cheaper agent isn't necessarily the best idea then and could come with an equally severe headache. From our point of view local knowledge and qualified staff you can actually meet, trumps price any day. But can you have the best of both, a cheap price and local knowledge?  Is using a low fee agency only a bad idea if their business model is exactly the same as the one charging a 2% fee?

This week, we've seen the first person join us specifically to benefit from what we've set out to do with our business model.  They've switched to us and saved, all be it at the point of sale, £4,500.  This is allowing them to put right a few bits and pieces that had been hampering a sale with their previous agent.  The agent had been doing a good job, but inflexibility on the contracted fee meant the property couldn't be improved to increase the chance of a sale at a price the vendor wanted.  Our 1% fee has meant the improvements can now be made.  Having a realistic valuation, the property will now probably sell fairly quickly in the new year and at the desired price.  We'll bank a decent ammount for a few weeks work and everyone's happy.  With a sluggish sales market, are agencies really still happy to throw away business for the sake of being flexible, as though its 2004?  Surely its better to sell quickly, keep the vendor happy, not waste staff time on a property going nowhere, and take a lower fee, than it is to be stubborn and lose business entirely?

Holidays are coming!

First blog post for the business.

It may be a bit late in the year but its always a good time to get ready for the new year surge!  It looks set to be an interesting year in the world of Lincoln estate agents.  For our part the great rates for sellers and landlords are set to continue into the new year. 1% fee for sellers and 0% for the first 3 months for landlords. Challenge us to beat your current deal by calling 01522 620 510.   We may even chuck in a box of mince pies!