Can Estate Agents lie about offers? Introduction

Can estate agents lie about offers? It is broadly understood that truthful estate agents cannot fabricate offers, as this contravenes the various codes of conduct they must adhere to.

The Guiding Principles for Estate Agents

While it's not outright illegal for an estate agent to misrepresent offers to a buyer or seller, it is unlikely to lead to a jail term. Still, it certainly infringes upon the professional conduct code that estate agents should uphold.

The professional conduct code implies that reputable estate agents are likely to be part of a property redress scheme for estate and letting agents, with The Property Redress Scheme being one of the most renowned.

Being a member of The Property Redress Scheme means that estate agents must conform to a Code of Practice, and should an estate agent violate these guidelines, they will face sanctions and be ousted from the scheme.

A key guideline is that estate agents should abstain from creating or falsifying details about any existing or non-existent offer. Estate agents are also required to promptly relay offers to the property sellers in writing. The Property Redress Scheme promotes transparency in estate agents by encouraging them to inform the prospective buyer that their offer has been passed on to the seller.

Alongside such schemes, estate agents are also obliged to follow the Undesirable Practices Order 1991. This legislation outlines certain actions that are deemed undesirable under the Estate Agents Act 1979. These include:

Distorting offers. Possessing a conflict of interest. Participating in coercive or collusive actions. It's an offence to withhold an offer from a seller.

Moreover, the legislation stipulates that any action that could result in significant loss, bankruptcy, or asset reduction is considered unsafe and inappropriate.

How Can You Verify an Estate Agent's Authenticity? - Can estate agents lie about offers?

A legitimate estate agent's contract will be explicit and professional. It will encompass all charges, expectations from your estate agent, obligations as a seller, and details of any additional expenses. If the estate agent contract appears ambiguous, they might be attempting to obscure something, thus indicating they're not 'authentic'.

Moreover, a genuine estate agent won't resort to pressure tactics. They trust their skills, are confident in your perception of their abilities, and won't need to coerce you into selecting them.

An estate agent persistently pressuring you to engage their services to sell your property probably lacks faith in their own abilities, which should raise a red flag about trusting them.

If you need advice on what questions to ask your estate agent to verify their authenticity, this article offers helpful guidance.

What Should Be An Estate Agent's Conduct When Handling Multiple Offers?

In situations where multiple offers have been made on a property, there are no explicit guidelines, but a reliable estate agent should behave professionally and adhere to most, if not all, of the following:

Assess the financial standing of each potential buyer and report their findings to the seller. Follow the seller's instructions and, if advised, inform the potential buyers about higher offers and negotiate with them to see if they are willing to revise their bids.

In the UK, revealing the exact amounts of an offer to other prospective buyers is not common practice as it could initiate an extended bidding war with incremental increases of £1.

Can Estate Agents Lie About Offers Regardless?

The guidelines of The Property Redress Scheme should deter an estate agent from falsifying an offer due to the associated risks. However, the reality is that an estate agent may concoct a phantom offer and unless they are exposed, no one will be any the wiser.

An estate agent misrepresenting an offer to a buyer carries minimal risk as it will likely lead to the buyer increasing their offer to 'match' the new bid claimed by the estate agent.

However, if an estate agent misleads a seller about offers, the risk is considerably greater as you might decide to challenge them...

What Steps Can You Take If You Suspect Your Estate Agent Is Misrepresenting An Offer?

The optimal approach if you require confirmation about an estate agent's honesty regarding an offer is to challenge them and request written evidence of the offer. This could range from a simple email detailing the offer to requesting a solicitor's verification of the offer's authenticity.

If your estate agent hesitates to provide written evidence of an offer, this is a clear sign that the offer is probably non-existent, and you can proceed to escalate this matter to a senior figure, such as The Property Redress Scheme.

Do Estate Agents Have To Inform You About Offers?

In writing, an estate agent is legally obliged to inform you about all offers. Even if the estate agent is aware it's below the price you will accept, they must communicate the offer to give you the chance to reject it.

When conveying offers, estate agents can't attempt to bias you towards a particular offer. An estate agent may try to sway you towards a buyer who has committed to using their in-house services, such as mortgage advice or conveyancing.

Estate agents also can't pressure you into accepting a specific offer because they believe the sale will proceed more swiftly, for example, if a buyer has no chain, especially if the offer is lower than your preferred price.

Despite a lower offer, an estate agent might push for acceptance to expedite their commission.

Buyers may propose agreements to try and prevent you from accepting other offers, such as:

Lockout Agreement

A lockout agreement involves a buyer placing a deposit with the seller's solicitor while the seller takes the property off the market for a set period. This gives the buyer time to finalise the contract and minimises the risk of a rival bidder submitting a last-minute offer.

Good Will Agreement

A good will agreement requires both the buyer and seller to pay a deposit when the offer is accepted. If either party decides to withdraw, the other party is entitled to keep the deposit.

Can You Exit An Estate Agent Contract?

On the topic of 'can estate agents lie about offers?', if you have signed an estate agent contract and suspect that the estate agent has misled you, the positive news is that you can terminate the contract, but it largely depends on the type of contract you have signed. Some contracts may impose penalties for leaving or switching to another estate agent, so it's crucial you scrutinise the small print of the contract even if they've provided an excellent estate agent valuation:

Ready, willing and able purchaser

If you sign this contract, you have agreed to pay the estate agent for merely identifying a buyer; if you attempt to terminate this contract, they might produce a non-authentic buyer, and you will be liable for their fee. Multi-agency - If you sign this contract, you gain access to a vast pool of potential buyers which is beneficial for competitive bids, but not if you wish to leave.

As you've been exposed to more buyers, the fees are significantly higher due to the involvement of multiple agents. Sole selling rights - If you sign this contract, the estate agent has exclusive rights to sell your property within a specified period; you are free to leave once this period expires. Sole-agency - If you sign this contract, you are in the strongest position to leave as a sole agency grants you the same rights as an exclusive selling contract, but if you find a buyer independently, you won't have to pay the agent's finders fee.

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