Can estate agents lie about offers?
Reading time: 8 minutes | Posted: 26th Jan 2021
While there are plenty of decent and honest agents out there, estate agency is not exactly thought of as the most trustworthy profession. With high fees at stake and a range of sales techniques under their hats, it’s certainly true that many agents excel at getting the best possible price for their clients. But while it’s one thing to create a buzz around a property, it’s another to tell an outright lie.
If you are looking to buy a property, then you may have concerns about being lied to, particularly when it comes to offers other than your own. In this blog post, we’re going to go over what safeguards are in place to protect buyers and sellers, why estate agents aren’t likely to lie, and what you can do when faced with a dishonest agent.
All good estate agents are registered with the Property Ombudsman, which resolves disputes between consumers and estate agents when they arise from either party. This scheme is one of the key things that will safeguard you against lies from an agent.
To register with the Property Ombudsman, estate agents must agree to their Code of Practice, which specifically includes rules around not making up or lying about offers. Specifically, it states:
‘By law you must not misrepresent or invent the existence, or any details, of any other offer made or the status of any other person who has made an offer.’
While it’s unlikely that an estate agent would go to prison if they were found to be lying about an offer, going against the Code of Practice would have severe repercussions for their business. They could be expelled from the Property Ombudsman (and placed on a list freely available on their website).
Being a member of the Property Ombudsman is a sign of a trustworthy estate agent, and being expelled would hugely decrease the number of vendors willing to work with them. With few vendors on their books, estate agents would struggle to stay afloat for long.
Estate agents may not be renowned for their honesty, but the truth is that, even if they wanted to, there is little benefit in lying about an offer.
For example, say an estate agent has a genuine offer of £375,000 for a property. If they pretend that someone else has offered more and encourage you to do the same, you may then offer £380,000 instead.
If your offer is accepted and the agent is working on a standard 1.5% commission, they would only have increased their fee by £75. If you were already at your maximum budget and so instead decided to withdraw your offer, then the estate agent’s lie would have cost them £5625.
As you can see, it’s a big risk to take for the sake of an extra £75. It’s not to say it doesn’t happen, but it’s certainly a risk most agents won’t be willing to take.
If an agent tells you that someone else has made an offer but won’t give you a concrete number, it might make you feel suspicious. However, it doesn’t necessarily mean that they aren’t being truthful. Though the Code of Practice stipulates that an estate agent can’t make up or lie about an offer, there is nothing that states they must disclose how much someone else has offered.
In the UK, it is standard practice for agents to give potential buyers a range of any other offers on a property as it means it can be used as a negotiation tool. After all, the estate agent is working for the seller rather than the buyer, and it is in their interest to get as high a price as possible. If all potential buyers were to know the exact amount that another had offered on a property, there would be no incentive to offer significantly more. Not disclosing the amount is simply a way for the estate agent to encourage higher offers.
However, you are well within your rights to ask for written proof that a legitimate offer has been made. This will usually be a letter written and signed by the seller’s solicitor. If the estate agent seems reluctant to provide this or even actively tries to discourage you, then that is definitely a cause for concern and you should make a point to question it.
As a buyer, you are in a tricky position in that you have no control over which agent is selling the property you want. However, for extra peace of mind, there are a few things you can do to make sure the estate agent is trustworthy and honest.
As we touched on above, membership with the Property Ombudsman can give you some peace of mind that you are dealing with a decent estate agent. To check if they are a member, you can simply search the company name on the Property Ombudsman website here.
On the same page you can also find a full list of expelled members. Any agent that appears on that list will have been reported to Trading Standards, so you know that they are best avoided if possible.
Estate Agent Reviews are a great way to make sure your estate agent will provide a good and honest service. While website testimonials are useful, be sure to check third party sites like Estate Agent Finder where estate agents have no control over what is posted.
If an estate agent is willing to lie about offers, then you can almost guarantee that it is not a one-off occurrence but part of their standard sales patter. You can also guarantee that they will have been caught out before. If that’s the case, then it’s likely that someone will have posted about it on Estate Agent Finder. Similarly, if other people have had good experiences, then chances are that you will too. Simply search for the name of the agent and you’ll instantly find their review score posted on the page.
For extra peace of mind, you can also ask friends or colleagues in the area if they have had any dealings with the estate agent before. A personal recommendation is as good a signal as any that you won’t run into any problems.
At times, the buying process can feel uncertain and it’s natural to be a little wary when there are such large sums of money involved. However, if something genuinely doesn’t feel quite right, then listen to what your gut is telling you.
If you do genuinely suspect that an agent is lying about offers and they have discouraged you from asking for proof, then the best thing you can do is report them to the Property Ombudsman. They will then offer a meditation service, and if the agent is found to be untruthful then the Property Ombudsman will offer compensation.
There’s little more frustrating than having an offer accepted only to be told weeks down the line that someone else has offered more. There are a couple of ways you can avoid being lied to at this stage in the buying process (and decrease the chances of other genuine offers).
You can enter into a Lockout Agreement that prevents a seller from negotiating with another party for a certain period of time, usually around 6 weeks. This will require a holding deposit but will mean that no other offers can be made in that time, genuine or otherwise. Some agents now also offer a Good Will Charter, where both the seller and buyer pay a deposit. If one party pulls out of the deal, then the other will get to keep the deposit money. With this in place, there is little motivation for the estate agent to make up another offer to get you to increase yours.
If you are reluctant to spend more money or slow down the process, then just make sure to ask for proof if any other offers come in. This is particularly important if the property has been taken off the market for a few weeks as you know that no one will have been viewing it.
There’s no way to guarantee that an estate agent won’t lie about an offer, but fortunately it is a rare occurrence that you needn’t worry too much about. Not only is it rarely worth the risk, but there are huge consequences for those who get caught in the act.
As long as you do a bit of research into the agent and keep your wits about you, then you will easily be able to avoid dishonest offers interfering with the search for your dream home. If in doubt, always ask for proof and make sure to trust your gut if things don’t feel right.Share this: