A case that The Property Ombudsman (TPO) was asked to review came from a seller against a Quick Sale agent. The sellers felt that they were misled, poorly communicated with and treated badly by parties engaged by the agent. They subsequently raised three complaints:
Complaint 1 – Misleading claims re a “quick sale”
The sale process did not proceed quickly as had been previously stated by the agent in their advertising and their communications with the seller; a speedy transaction was an important selling point for the sellers to use the agent’s services.
Complaint 2 – Agent’s £3,000 Fee
Having proceeded on the basis of a £75,000 valuation for the property, the sellers were told a month later when the eventual buyers were found that a fee of £3,000 would be taken from the Sale Proceeds; by this time, the completion date set out in the Agreement was fast approaching. It was not explained by the agent exactly what this fee would cover. The sellers
believed the fee itself was questionable and not justified.
Complaint 3 – Behaviour at the Property and complaint handling
It was reported to the agent that the employee sent to the sellers’ property to complete identification checks was rude to the sellers. They said the employee also tried to take monies from the sellers unlawfully and that it was not explained to the sellers that they could use their own conveyancing firm.
Complaint 1 - Misleading claims re a “quick sale”
The agent’s headline marketing described them as nationwide quick house sale specialists. They give an example on their website of a sale agreed for a property in 3 days for over the asking price, which had been on the market with another agent for 12 weeks. They also advertised themselves as cash buyers who could buy a home in as little as 28 days.
The agreement between the parties stated that the agent would pay the sellers £70,000 to buy the property from them subject to contract and that this would be completed on or before a specified date. The file noted the seller’s wish to sell within a month.
The agreement was subject to a further sale and purchase agreement to be finalised following a conveyancing process and the results of a survey being taken into account; this was reflected in the terms of the agreement. There was no guarantee that the sellers would receive £70,000 for the property and that the sale would complete by the agreed date, but this agreement reflected the sellers’ understanding at the time. The presence of a sitting tenant was also noted.
An offer was agreed and the sellers sought clarity as to whether the buyer would proceed with a sitting tenant. The sellers then agreed directly with the buyers that they would complete the purchase with the tenant remaining in situ. At this stage, the sellers sought confirmation from the agent as to whether they were on track for the agreed completion date. A few days later, the sellers learned from discussions with the buyers that there were errors with the contracts issued and other delays. The sellers understood and were evidently disappointed that the sale would not complete by the agreed date.
The Ombudsman did not hold the agent responsible for the delays with the transaction and the failure to complete the sale by the agreed date as the role of the parties’ conveyancers and the lack of progress were not within the control of the agent.
However, the agent gave the sellers the impression from the outset that; they could achieve a sale within a month; that pursuant to the initial agreement entered into, they would ensure they would complete the purchase by the agreed date at latest; and the sellers would receive £70,000 for the property.
The agent should have been aware of the potential impediments to the transaction completing quickly as such matters as the time it takes for local searches to be received are commonly known to property professionals. However, there was no evidence that the agent sought to clarify this to the sellers and explain the likely conveyancing process and the realistic timescales, choosing instead to leave the sellers with the impression that the sale would complete in under a month.
Complaint 2 – £3,000 Fee
The agent initially agreed to buy the property for £70,000 based on a valuation of £75,000. In the end, the property was sold with a sitting tenant in occupation to a buyer found by the agent for £70,000, with the sellers receiving £67,000.
Based on the statement and communications the Ombudsman saw, £3,000 was deducted from the proceeds of sale in respect of the agent’s fee, net a deduction of £856.80 to cover the solicitor’s fees and disbursements. The sellers questioned the £3000 and sought an explanation for what that covered.
The agent explained that after an agreed time of marketing the property and conducting viewings, it was mutually agreed that buyers were not willing to offer £75,000 which was the target price. They also explained that it was further agreed with the sellers that £67,000 after costs was acceptable and a new agreement was signed and solicitors instructed. They also explained they did not know the final costs of the transaction but a difference a £3,000 between what the buyer was offering and what the seller was receiving was needed to be achieved in order to cover and costs of selling including the Solicitors fees.
The agent also emphasised that the costs of the transaction were not finalised at that stage.
The Ombudsman did not find that the agent deliberately misled about the price they were willing to pay, or how the property would be valued or that they deliberately misrepresented the property price (4d). The Ombudsman accepted that there was scope for the sale price to change and therefore the fee.
However, the Ombudsman was concerned that by providing the sellers with the initial agreement in the way they did and approaching the transaction in the way they did, they did not clarify with the sellers how the fee would be calculated using the actual selling price rather than the target price. The Ombudsman was therefore critical of the agent for failing to set out from the outset the nature and extent of their potential charges and the impact on any sale price.
Complaint 3 - Behaviour at the Property & complaint handling
The agent engaged the services of a third party provider to meet the sellers and help them complete the paperwork to help progress the transaction, which primarily seemed to include the engagement of conveyancers/solicitors and provision of related documentation.
It was evident that the visit to the sellers’ home to complete the related paperwork caused some upset. The Ombudsman could not hold the agent primarily responsible for the way the face to face meeting unfolded however, the primary concern was the reference to an upfront payment to the solicitors to enable them to progress the transaction. The agent confirmed that they covered this upfront payment not the sellers, but it was apparent that some confusion may have arisen and the agent could have done more to clarify the arrangements the third party would present to the sellers prior to the visit.
The Ombudsman supported elements of all three complaint issues and considered that the circumstances merited an award of compensation to reflect the avoidable aggravation, distress and inconvenience caused to the sellers. Accordingly, an award of £500 in compensation was made.