Published on : Thu, 12 May 2005 00:00GMT
by : Sadat Sayeed

Be careful while selling your home or having your home valued, several valuations may be the order of the day as a new research has revealed that estate agents have been treating the sale of property somewhat like a lottery, by valuating homes differently, creating massive differences in house prices and valuations.

Consumer magazine, Which? found in a survey that agents were purposefully valuating homes differently, for raking business. While some agents overvalued property in order to add customers, others offered incorrect prices, because they were ill trained or less competent. On the other hand, many estate agents were even undervaluing property to make a quick buck.

Which? surveyed 14 homes that had been valued by 56 agents in different regions of the country. An outrageous variation of 25% and above was found in six of the valued properties. Which? stated that discrepancies in property valuations could result in sellers facing huge losses or even failing to find a buyer because of the overvalued price. Author of the magazine, Pete Tynan said, "Touting for business, deliberately overvaluing, is a common problem, according to a property expert questioned by Which?. Some agents give high valuations to get a customer's business, then suggest a more realistic price once they've locked sellers into a contract."

Halifax was found to value a house during the research at £200,000, and at the same time a competitor, Moody and Co, calculated the same property’s worth as £325,000. Meanwhile, Bradford & Bingley valued a property in Liverpool at £125,000, whereas Halifax placed a price tag of £180,000 on the property.

In view of this, owner of a property firm, Phil Spencer, who presents Channel 4's ‘Location, Location, Location’, commented that overvaluation was indeed a serious problem. He was quoted as saying, “Overvaluing attracts sellers who are then tied in to an exclusive contract. After a few months, agents will lower the price to the market level.”

Therefore, which? has appealed the government not to take the matter lying down and to pose stringent rules and regulations for such estate agents who swindle customers blatantly to gain business. It reminded the government of its last year’s pledge of placing all estate agents under a body that would be duly monitored by officials to prevent unfair trade practices. The government had also planned to grant the Office of Fair Trading the authority to raid agents anytime to catch them at work.

Nevertheless, nothing substantial had been done by the government regarding the matter, till date.

Thus, estate agents were operating at their free will under no supervision whatsoever. This independence was encouraging more and more people to choose the profession without comprehension of the rules and regulations concerning the trade.

The editor of Which?, Malcolm Coles, assessed the entire situation and said, “The current consumer protection system is hopelessly ineffective and allows rogue estate agents to get away with daylight robbery. For two years, we have been demanding that all estate agents are members of an independent redress scheme. A home is the biggest purchase we make - but the whole process is clouded in secrecy with estate agents holding all the cards.”

Meanwhile, the chairman of the Ombudsman for Estate Agents (OEA) board, Bill McClintock, which Malcolm criticized, attempted to clarify the board’s functions saying that the magazine had ‘misunderstood’ the basic implications and operations of the OEA Scheme. He said, "What Which? appears to be asking for is a regulator, with powers to impose punitive fines. An ombudsman scheme is not set up to punish erring estate agents and to sort them out. It is set up so that unresolved disputes can be referred to an independent third party for settlement.”