OPINION PIECE:
A couple of dodgy geezers knock on your grandmother’s door and tell her they’re doing some roof work for the council nearby and they’ve noticed one of her ridge tiles is loose.
‘We could fix it for you if you like?’ they say.
Of course, when they ‘inspect’ said roof they assess that it needs a lot more work and it’s ’dangerous’.
Grandma is worried and agrees to give Bodge and Leggett her life savings of £10,000 to remedy the loose tiles that, of course, aren’t really loose at all.
This is fraud.
Under s.2 Fraud Act 2006, fraud by false representation requires a person to make a representation dishonestly, knowing that it is or might be untrue or misleading, intending thereby to make a gain for themselves/another or cause/expose another to loss.
Would some estate agents be ‘roofing chancers’ if they were not selling houses instead, in that the perils of overvaluing a property in order to hoodwink the seller into instructing them, is no different from the scene I’ve described above?
Placing a false estimate of achievable value on a potential client’s home is malicious. It not only gives false hope to that seller but also leads them to believe they have a higher budget for their ongoing purchase than they really do.
The swindle I’m setting out here also messes with timescales and delays a potential sale considerably. Especially if you imagine that many owners are selling specifically because they have found an onward purchase.
They may go on to spend money on that purchase… survey fees, mortgage booking costs, legal fees etc.
Yet the agent they’ve relied on as their selling expert has bamboozled them. They’ve lied.
The oldest trick in the book is to win an instruction by purposely inflating the actual achievable price then shackling the owner into a long sole agency contract. This is where the deception really turns nasty.
The lie is the bait. The sole agency is the mechanism. Then the repeated calls to reduce the inflated asking price becomes the real grift.
This practice, carried out daily by hundreds of ‘valuers’ is despicable. Yet it’s legal.
It plays with people’s lives and their emotions. It’s dishonest.
Government should intervene to outlaw this charade and to criminalise those that practice it and indeed those that encourage it from Head Office.
In the absence of long overdue licensing for estate agents, if I were Housing Minister one of my first jobs would be to table legislation to hold estate agent fraudsters to account.
Disagree with me. I dare you.
Russell Quirk is co-founder of ProperPR, a property industry public relations specialist
Comments (26)
Why give the author air…??
Quirk by name, quirk by nature?
Basically everybody involved in selling houses agents and vendors alike tell fibs. Overvaluing is common enough followed by the suggestion after a few weeks of no viewings that the price be dropped. While frustrating a vendor could view this as testing the market. It’s probably better than having a property undervalued and snapped up leaving the vendor wondering if they could have got more or wondering if they are the victim of some sort of stitch up involving the agent and a favoured buyer. Of course, it would be nice if the selling price set by the agent formed a binding contract and the agent were liable to refund any difference between the asking price and selling price to the vendor- but that ain’t gonna happen.
Failed estate agent becomes professional rent a gob and posts click bait.
I’ve got a better question for you Quirky, should politicians who lie and willingly mislead the public be sent to prison? Bet you won’t answer that one.
It is disappointing that it appears this is the usual vexatious opinion rather than the debate we were offered.
The author concluded with “disagree with me, I dare you.” I took that as an invitation, not the usual opinion piece dressed up as settled law. So I disagreed, with a legal argument and case studies, not an insult.
The author replied twice in these comments. Both times to the same anonymous poster, both times about their grammar and their credentials, neither time about the substance of whether overvaluation can even be defined, let alone criminalised.
Michael gave the author a real case that tests his framework directly. Nothing. The auction question went unanswered too. If the dare only gets taken up against people who insult him and ignored against people who challenge him, it wasn’t a debate. It was opinion, not debate.
I double dare the author to show each poster the same time and respect they afforded him.
What ridiculous article. Talk about agents talking nonsense – maybe stop doing it yourself. Define overvaluing. Why would agents waste their time and money on a property they can’t sell unless they take the model from some un-namable agents who do this with regularity (we all know who they are). Most professional agents try to provide the right advice but we have to allow for humon error too and many vendors and landlords are greedy and push for a silly high price even when guided correcly. That’s it I forgot – always blame the agent.
Ridiculous article on so many levels
Imbecile
We don’t have enough prison space!!!
Overvaluation cannot be a crime until someone defines it, and nobody has, including you.
I have spent the last few weeks demonstrating exactly why. A case study on portal AVMs showed there is no mechanism for correction once a bad number goes live, so the market itself manufactures the misinformation you are blaming on agents. Chris Watkins told me it is all ego, agents who cannot bear to lose an instruction. Charlie Lamdin tried to make a point so far off topic it had to be deleted. Then I showed a property that went sale agreed 17 per cent above the lowest of several agent valuations. Was that an overvaluation, or did one agent simply fail to see value the market later confirmed was there.
Your Bodge and Leggett analogy only works if the agent knows the number is false when they give it. Fraud by false representation requires that knowledge and that intent. Nobody in my case studies, and nobody in yours, has shown that. What you have shown is that a high number that later gets reduced feels like a con to the seller who lived through it. Feeling conned and being misled are not the same thing.
And even where an agent has been careless or wrong, that is a civil matter, a tort, not a crime. Misrepresentation has a remedy already. It is called suing them. Reach for the Fraud Act because you cannot be bothered to define your terms and you end up criminalising pricing itself, because pricing is a range, not a fact, and every valuer in the country works from an incomplete picture of demand.
Define overvaluation, then decide whether it can be criminalised. But before you do, look at the AVMs quietly outputting confidence bands of plus or minus 9.9 per cent and plus or minus 15.3 per cent, guiding consumers toward valuations that are currently unachievable. Blame the industry that is turning a collective blind eye to the cause.
It’s a conundrum. Let me pose a real-life example. I had a flat for sale in West London (quite a while ago, as you will see from the numbers, but the principle stands). I asked three agents to value and quote. The valuations ranged from a low of £99,000 to the next at £118,000, with the final agent coming in at £155,000. I instructed the last agent. Price achieved? £153,000. How would any overvaluation sanction have dealt with this case, I wonder?
A bit of click bait if ever I saw it but it would clear the Corporates out of our town pretty sharpish!!! Good luck proving it though…
If over pricing is dishonest Russell, where do you stand on the Modern Method of Auction?
An Estate Agent that lies! I’ve never found one that didn’t.
Totally agree and well done for calling it out, despite the predictable backlash from agents. You only have to look at the number of reduced and withdrawn properties to see there is a problem with the current model, especially in a falling market. Either the estate agents are 1) knowingly over valuing to win instructions (which we all know is happening), 2) not doing their job well enough of explaining the current market effectively to sellers in order to manage expectations on price, or 3) behind the curve themselves and chasing the market down with their sellers. All three reflect badly on the agent but its clearly widespread given what we’re seeing. Know and understand your market and behave honestly… its not a big ask.
Buyers smell blood when they use add ons like Property Log and can see properties withdrawn, re-listed, repeatedly reduced etc. They’re not stupid. Price accordingly, stop overvaluing, get people through the door and create a market for the property.
Seems insane to me the lack of oversight and regulation in the industry given the sums of money involved for the seller, in many cases their entire pot of wealth.
Hang the b++tards !
Crikey @thewayahead you have woken up on the wrong side of the bed. I don’t feel that you are way ahead at all. Perhaps you should rename your user name to @stayinbed
Actually agree with this, at least the principal idea behind it. The most important line in this article is the fact that the wrong marketing plan can ruin a persons plans and it’s actually very dangerous.
Just means my job in the living room takes a little more time explaining the pros and cons to a Seller and if they can’t be bothered to listen and will just look at the highest price with lowest fee on their Excel sheet, then good luck to them.
Failed Estate Agent makes ridiculous statements. Your better off weeding your garden than interferring in our industry. We don’t need people like you in our business, so get out and stay out.
What’s wrong with failure? Only those without courage fear failure as a route to success.
May I suggest that instead of weeding YOUR garden you take some lessons in grammar… it’s ‘you’re’ not your. And your spelling is atrocious (that means it’s bad).
Incidentally, it’s my industry too and has been for 25 years.
Your comment also seems to infer that you support the practice of conning sellers with an overvaluation.
Shameful. Perhaps it’s you who needs to leave the sector. May I suggest ‘Find the Lady’ on Westminster Bridge as a new career for you?
Doughnut.
Actually Russell, I have been in the industry for 43 years and still going. I don’t agree with overvaluing or conning sellers, but the market is the market and each property will find its own value. A property is only worth what someone is prepared to pay for it. Failure is fine, but monumental failure like you experienced leaves you little room in my opinion to comment further on our industry. I think you need to look at yourself when you use the word Doughnut, because there is no bigger Doughnut than you!!
Why are you anonymous? What are you scared of?
I completely agree and witness the consequences daily. Those who have dared to disagree with the report should in my opinion be ashamed of themselves. I find many estate agents are in the business of wrecking peoples lives. It is certainly a profession I would be ashamed to be a part of.
that is ridiculous
what a load of absolute nonsense, have you seriously nothing better to write about. Agent A values it at £400,000, Agent B £420,000 Agent C £435,000, who would you sell with? You’d probably put it on at £400,000 by the sounds of it sell it straight away and forever wonder could I of got more. Also not many sensible owners spend money on onward purchasers till they have sold, not sure which agents you have dealt with but if your not proceedable you ain’t having an offer accepted are you.
In a falling market, if you over value a property you are costing the seller money with every month that passes and the house stays on the market. If £435K is over valued, it’ll get reduced and then any buyer worth their salt will offer much lower as they know the seller is desperate to sell. I certainly would. You only need to look at the stats to see how many sellers are chasing the market down to know what you’re saying is nonsense.
£435k maybe over valued but then sells for say £410k and that agent gets paid and the one who gave the correct advice doesnt, who is the real winner? from my experience, the agent that values high is always the cheapest. Good advice is good but it often dont pay the bills. I’m sure we have all sold properties for more than we ever thought they were worth, You can give the client the right advice and price but how often do they come back with’ can we try a bit higher ‘ ?