Elderly woman charged agent’s commission after property failed to sell, allegation

| Rosalind Renshaw

An elderly woman who sold her home to her own son after the property failed to sell through an agent was charged over £4,000 in commission.

The claim has been made in a letter to the Solicitors Regulation Authority.

It comes from Susan Larwood, a conveyancing manager in a law firm.

She told the SRA that her long-standing client had placed her home on the market with the firm which, after 18 months, had not sold the property.

The elderly home-owner’s son then agreed to buy the property, enabling her to move on, and she advised the agent accordingly.

Larwood said: “The agent wished her all the best – and then delivered an invoice for in excess of £4,000 for their services.

“When challenged, they then advised our client that they had a rolling contract and as she had not served adequate notice, their fee was due and payable.”

Larwood told EYE that her client paid up after being threatened with legal action by the agent.

The incident is one of several alleged in Larwood’s letter to the SRA about estate agents’ behaviour, in which she calls for the abolition of referral fees paid by conveyancing firms. She has also raised concerns about buyers being forced into using agents’ mortgage brokers.

In one incident Larwood said that a first-time buyer who worked for a bank and had a mortgage from them agreed, had her offer accepted on a property.

The seller instructed the agent to withdraw it from the market.

However, the buyer found it was still being advertised as available.

The agent told her that the property would not be withdrawn unless she saw their financial advisor and warned that if she did not, she could lose the property.

“My client panicked, spent 15 minutes with their financial advisor who filled in a form for a mortgage with the company that she works for, and which had already been agreed, and levied a fee of £500,” Larwood told the SRA.

Larwood alleged: “There are numerous transactions where this particular agent has advised my clients that they would prefer not to deal with me and that they should use their preferred solicitors as they would be able to act for both parties, which would make the transaction quicker and cheaper.

“This is a blatant lie on the part of the selling agent.

“This particular agent receives a referral fee for anything from £100 to £450 per transaction, which is added to the estimate of costs for the potential buyer/seller.

“Unfortunately there are so many cases that I can cite where estate agents have bullied, brow-beaten and threatened clients that if they do use their preferred solicitors, they will not acquire the property they wish to purchase.

“Bear in mind that these preferred solicitors are normally 100 to 200 miles away and have no personal knowledge of the area, as any local firm of solicitors would have.”

In her letter – written by Larwood in a personal capacity and not on behalf of her firm – she alleges: “Estate agents try everything they can to pull a client away from their existing solicitor if that solicitor does not agree to pay referral fees.”

Larwood also cites difficulties with three separate agents who sold properties via ‘sale by tender’, whereby the buyer pays the seller’s estate agent’s commission.

Larwood said she advises such clients that if they purchase through sale by tender, they will have to pay additional Stamp Duty.

The agents concerned told Larwood’s clients to go with their preferred solicitors, “as no additional Stamp Duty would be payable”.

The Inland Revenue, however, confirmed that Larwood was correct in her advice.

Larwood has asked for a meeting with the SRA to discuss referral fees and other matters relating to agents.

She has also told the SRA that she will name names.

EYE has been given the names of two of those that Larwood alleges engage in poor practice. Both are well-known brands.

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27 Comments

  1. Robert May
    June 30, 2017 at 06:57

    Paralegal?

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  2. smile please
    June 30, 2017 at 07:22

    Well she sounds an absolute joy to work with!

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  3. nextchapter
    June 30, 2017 at 07:25

    If it’s the same Sue Larwood I think it is, then she is an incredible solicitor.  She has never been a fan of Estate Agents, so calling her to get an update is not always met with happiness, but do you know what? She does ana amazing job, to the point where you don’t have to chase her, and things get done and push to an exchange of contracts very quickly,   In regards to the client being charged £4,000 after selling to her Son, after not being sold for 18 months on the market, the Estate Agent needs to sort it out.  It’s ludicrous that they would even consider raising that invoice. It’s not fair on them, that her Son purchased, but sometimes it goes that way, and it wasn’t like it was a distant relative. It was her Son!

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    1. sb007ck
      June 30, 2017 at 07:29

      If you dont chase her, how do you update your vendors and purchasers? Do you just merely say “dont worry Super Sue is on the case, it will be going brilliantly”?

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      1. nextchapter
        June 30, 2017 at 07:44

        Oh please!  She constantly keeps her clients up to date and the other sides solicitor.  I’ve not had one complaint from either side whenever we’re involved in a chain wth her. She gets the job done, and they’re always the fastest turnaround to exchange.  It bothers me, that solicitors are generally so poor, that you have to keep chasing them just to ask why they haven’t sent out draft contracts or raised searches, after weeks and weeks of initially chasing with no joy.  Are you happy with that? 

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    2. MRD201794
      September 20, 2017 at 13:45

      Without wishing to be picky, she’s not a solicitor. There is a big difference.

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  4. Emmersons46
    June 30, 2017 at 07:27

    We don’t pay referral fees to estate agents. We do pay referral fees to some of our introducers who are mortgage brokers.

    We have had a few clients tell us that the estate agent has then said all sorts of things to encourage them to sack us and to instruct the Solicitors who will pay them a referral fee. So far no one has been duped by this.

    Referral fees between Solicitors and anyone who is not subject to Statutory regulation so there is an enforceable code of conduct and a proper, independent complaints system and a system of compulsory professional indemnity insurance should be banned.

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    1. sb007ck
      June 30, 2017 at 07:31

      At the end of the day once referral fees are paid in any form there will always be a question over why some people recommend some firms. Be it estate agents or mortgage brokers recommending solicitors, mortgage brokers recommending one lender over another (variation in proc fee) or a multitude of other situations, referral fees are here to stay and people just have to get on and deal with it.

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    2. smile please
      June 30, 2017 at 07:36

      Why do you pay referral fees to mortgage brokers and not estate agents?

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    3. sb007ck
      June 30, 2017 at 07:48

      Well she sounds brilliant, if only i could recommend her

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  5. Essjaydee51
    June 30, 2017 at 07:38

    Despicable practice, we hate owners getting a private buyer and investigations are done to the degree possible to make sure of the facts but you take it on the chin, bite your tongue and move on as for the other practices, I’m sorry but very poor form however the solicitors claim of using a local sol doesn’t wash either as a lot of sols travel in to work thus not being local either so her argument there is weak.

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  6. Rob Hailstone
    June 30, 2017 at 08:11

    Why didn’t the elderly client (or the son), after receiving the invoice, discuss the situation with Susan Larwood, who might have been able to resolve the issue? Has Ms Larwood contacted the agent concerned?

    This isn’t really about referral fees, they look like they are here to stay (and will only go underground if they aren’t). This is about the dodgy practices that some agents use. Problem is the SRA doesn’t regulate estate agents (no one does). Pointless meeting with the SRA methinks.

    Best possible outcome, the agent does the decent thing and refunds the £4k.

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    1. Robert May
      June 30, 2017 at 08:29

      If there is a contractual reason why the client should pay I’m not aware of an upper age limit that says anyone can dip out of their responsibility because they’re old.
      If the legal advisor failed to notify the client of the potential of an invoice, that says quite a a lot about the service they offer.
      ‘What does the contract with your agent say?’ is a  basic, basic.  I’m surprised given the apparent reputation, but while being all super and brilliant  someone forgot the humdrum stuff. Whoops!

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      1. smile please
        June 30, 2017 at 08:44

        Robert is right.
         
        Two sides to every story.
         
        On the face it has been presented its not great PR from the agent.
         
        BUT. If they had sole selling rights, not sole agency (still surprises me the agents that do not know the difference). They were in contract.As bad as it seems the agent is due a fee. Also look at 18 months worth or work that went into the the property.
         
        And again as Robert points out, when agreeing the sale, why did the amazing conveyancer (they are not solicitors in my eyes) not ask her to check her agency agreement or check it for her.
         
        The conveyancer sounds like she has a spud on both shoulders not a chip!
         
        Biting off heads for estate agents that dare ask for an update, wondering why agents do not want to work with her and recommend other conveyancers they have a working relationship with. 

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  7. steps56
    June 30, 2017 at 08:16

    I’ve know Sue for around 25 years, when you call for updates she will bite your head off…but that’s not a bad thing, i would definitely want her in my corner if i was buying or selling.

    As for the agent, i would guess that’s why Mr Spiro got out years ago.

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  8. Beam Splitter
    June 30, 2017 at 08:50

    An elderly woman charged commisson as per their contract?! They can’t keep getting away with it! BAN ESTATE AGENTS NOW!

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    1. smile please
      June 30, 2017 at 09:03

      Oh Come on Beam Splitter,
       
      I am sure the conveyancer waived the fee as she was selling it to a family member 😉

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  9. Headache
    June 30, 2017 at 09:41

    Tip of the Iceberg.

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  10. Jon
    June 30, 2017 at 09:59

    She should have gone to one of the on-liners!  They too, wouldn’t have sold the house, but would have charged a lot less!!!!!  Guess the Agency was not a “no sale, no fee” agency.

    At least next time there are comments about on-liners charging and not selling, the on-liners can remind us all about this story.  BTW, I do NOT and have never worked for an on-liner and nor do I have any desire so to do.

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    1. cyberduck46
      July 3, 2017 at 07:13

      >At least next time there are comments about on-liners charging and not selling, the on-liners can remind us all about this story.
       
      Just bookmarking it now 🙂 On the market for 18 months and had to pay £4000 for not selling. Funny that, when I read all the comments about PurpleBricks you’d thing that high street agents sell everthing above listing price within a couple of weeks.
       
      Still I’m sure it was considered at the time she signed the large print contract whether she was vulnerable or not and everything was explained to her.
       

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      1. Jon
        July 3, 2017 at 13:04

        I’m sure it was all explained to her.  Hopefully the agency did explain the implications of their contract or at least recommend that she take independent legal advice.
        If you are bookmarking this story, it saves me a job!!  Ta for that.

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      2. PeeBee
        July 3, 2017 at 15:42

        “Funny that, when I read all the comments about PurpleBricks you’d thing that high street agents sell everthing above listing price within a couple of weeks.”

        Point me in the direction of all these comments you refer to please, cyberduck46.

        I must have missed all of those. Every single frickin’ one of them.

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        1. PeeBee
          July 4, 2017 at 14:41

          Well… where are they?

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  11. gk1uk2001
    June 30, 2017 at 11:08

    So someone had to pay a fee that they were contractually obligated to pay? Not sure that there is actually a news story here is there?

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  12. El Burro
    June 30, 2017 at 12:26

    Someone has charged a fee when they haven’t sold the property? Disgraceful, she should have used an online agent like Purple*ricks, oh hang on . . . . . . . .

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  13. Robert May
    July 1, 2017 at 07:30

    This story had me thinking. If a clueless remote listing rep mis-values a property and agrees an easy sale due to the undervaluation, the conveyance is handled by the firm’s in house conveyancing firm  where minions  shuffle and  stamp bits of paper but nothing else. Where is the safety valve on the duty of care to the client?

    With no separation of the fiduciary duties to, effectively, a single client there is no-one to ask the simple questions “are you sure about this?” “Do you really want to sell your property at this price?”

    Agent conveyancer relationships  have always and will always have room for friction as the conveyancer provides and equal  duty of care to their client as the agent. Where there is one commercial, package deal vested interest that essential obligation  to the client effectively evaporates.

    Should passive intermediary lister firms be allowed to provide a conveyancing service where there this obvious conflict of loyalties exists?

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  14. NickTurner
    July 3, 2017 at 14:44

    Robert, although this story is going slightly away from the original thrust ( that happens in many discussions on EYE and makes them educational and interesting) you make the important correct point about the ‘fiduciary duties to….’ returns nicely to the business model of the 1980’s and why it did not work then. The likes of Nationwide, Abbey National, etc were only ever interested in financial services and selling pensions, mortgages etc with referral fees being paid. Estate agents were the conduit to the leads and thats why they bought them up rather like a road sweeper searching for dirt on a clean road.Any office location will work as long as we cover the area. Oh,by the way it didn’t work then either.

    It may have, and may work in the USA where the idea came from, but in the UK then the vendor/buyer preferred their own advisers in the various stages of buying and selling. Nowadays those younger but less wise than me; who knows?

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