Whenever a property is being sold, there are certain unethical tricks that estate agents can do in order to get a buyer to offer more or force a sale of a property with an added sense of urgency.
The answer is that yes, it is certainly possible that an estate agent is lying to you but in this article, we go over whether this is against the law, what you can do about it and the common ways for you to pick up on how estate agents lie.
On top of this, landlords should know what it actually looks like when there are multiple offers on a property so they can approach negotiations with the confidence that they aren’t being pressured or manipulated when making such an important decision.
Do estate agents lie about offers?
To put it simply, yes, a landlord is able to lie about offers on a property whenever they want in order to benefit them in a deal or negotiation. There is very little that a homebuyer can do about this but knowing what is required by law may help you out.
If you are able to arm yourself with the right information, you, as a landlord, may be able to play estate agents at their own game and be able to anticipate when they are lying and gazumping.
Is it a requirement for estate agents to tell you about offers?
When selling a home, it’s critical to understand the legal obligations that estate agents have when presenting offers to you. Estate agents are required by law to notify you of any offer they receive, even if it is less than the price you had in mind. This allows you to decline the offer if it is not suitable for you.
It’s also worth noting that estate agents cannot try to persuade you to accept one offer over another. For example, if a buyer has agreed to use the estate agent’s in-house services such as mortgage advice or conveyancing, the estate agent cannot force you to accept that buyer’s offer.
Furthermore, estate agents are not allowed to force you to accept an offer simply because they believe it will expedite the sale. This is especially true if the offer is lower than you would have preferred.
It’s understandable that estate agents would prefer you to accept a lower offer so that they can collect their commission fee sooner. And this is when you will pay your estate agent fee.
However, keep in mind that the final decision is yours, and you have the right to reject any offer that falls short of your expectations.
Both estate agents and letting agents commonly charge fees so this isn’t something that should generally be avoided.
A lockout agreement
Let me describe two types of contracts that buyers and sellers can enter into. First and foremost, there is the lockout agreement.
In essence, the buyer pays a deposit to the seller’s solicitor in exchange for the seller agreeing to remove the property from the market for a specified period of time. This allows the buyer to get everything in order and sign the contract without worrying about any last-minute rival bids.
Using a goodwill agreement
A good will agreement seen here, is another type of agreement in which both the buyer and seller pay a deposit when the offer is accepted. This deposit is kept secure and can be used as insurance. If either party withdraws from the transaction, the other party retains the deposit as compensation for lost time and effort.
What are the usual lies you may hear from an estate agent?
Typically, even the best estate agents may lie about the mortgage services they offer and the price of your home. Of course, they may also lie about offers but this is just one of the many things they can lie about in the sale of a property.
A house sale for an estate agent or letting agent working on commission could mean a lot of money so a lot of agents will do everything in their power to close a deal if it means getting to the next level in their career.
Pressure to use their mortgage brokering services
Sometimes, an estate agent may be affiliated with a certain mortgage broker or even a lender. So, as they list your property for sale they may recommend certain services that aren’t the best for you as a buyer.
This may not be an obvious lie but you should look at any recommendations an estate gives you with caution and still seek a second opinion, even if you seem happy with your mortgage deal.
The incorrect pricing of your home
When an estate agent is trying to sell a property, they could lie about how valuable it is to attract the seller and attract you to work with them, drawing you in by being able to benefit from a bigger deal.
On the other hand, if they are an estate agent who is working on commission and trying to sell your property as soon as possible, they may undervalue a property so they can sell it quickly.
Making up offers
Offers being made up to get a buyer to have a greater sense of urgency is a common tactic. For example, if you made an offer for a property that is perhaps the best offer yet, an estate agent could say there is a higher offer to get you to pay even more.
This is typically where a buyer isn’t quite happy with the offer given to them and asks an estate agent to do their best to up the offer from a buyer. To avoid this, have a budget and stay away from any emotional buying decisions.
Click here for more on how to form a budget as you begin the process of buying
The commission they receive
An estate agent may also lie about the amount of commission they receive. This is because there is a good chance that the buyer will be sceptical about the decisions an estate agent makes if they know they have an incentive to sell it.
In order to lower a buyer’s guard, they could lie about this to appear more genuine. Unfortunately, there is no way to truly know if an estate agent is making a commission.
What are the rules and regulations for estate agents?
There is no specific regulation for estate agents regarding offers. However, there are some things to be aware of that the estate agent industry generally follows. So, get familiar with the following questions
If there are multiple offers on a property, what happens then?
If there are multiple offers, it is the estate agent’s job to communicate all of these to the seller in an exact form. However, they do not have to give an exact figure to another buyer about the offer of another person if they don’t want to.
What is the right way to disclose an offer on a property?
The right way would be to tell the seller exactly what the offer is and ask them to come to a conclusion as to whether to accept or deny the offer within a certain timeframe.
Are there any laws around lying about offers?
Unfortunately, apart from the contract that is signed between estate agents and buyers and estate agents and sellers, there are no laws regarding an estate agent lying.
When dealing with estate agents you will have to accept that this is always a possibility and if you are an estate agent, consider if this is okay with your morals as you become an estate agent.