Estate agents and parties with vested interests in promoting agents love to state that when dealing with a private seller direct, a buyer does not enjoy the same protection of the law that they have if they deal with an agent. Specifically, that private sales are not covered by the Property Misdescriptions Act 1991 or the Estate Agents Act 1979.
It is quite correct that private sales are NOT covered by these acts as they give buyers rights against AGENTS for malpractice and misrepresentation of property particulars and negotiations. Of course these acts don’t apply to private sales, because they are regulations intended to control illegal activities of ESTATE AGENTS!
Buyers however do have the SAME protection, but under DIFFERENT laws – namely consumer laws such as the Sale of Goods Acts, which cover the (private) advertising of property sales in the same way. In other words, sellers must not misrepresent the particulars of the property being sold in precisely the same way that an agent must not mislead buyers.
The Consumers Association (WHICH?) have confirmed this in their own press releases and discussions.
What many buyers do not appreciate is that an estate agent is acting for the seller, NOT the buyer. The behaviour and manner of agents towards buyers (who they are anxious to please) suggest to many people that agents have the buyer’s best interests at heart, but this is essentially naïve. A buyer must look out for their own interests at all times, especially when dealing with an agent who is skilled in negotiating on behalf of their client (the vendor) when the buyer has, in fact, no-one to act professionally for their interest.
Buyers who deal directly with sellers are not faced with the conflict of interest that arises with an agent (1) trying to sell them financial services whilst at the same time (2) trying to sell them a property on which the agent will make commission.
There is also the question of whether information passed back to buyers from an agent is true and /or correct – a buyer will never know, this is especially true of the case of passing on offers, whether such offers are acceptable or whether ‘another’ higher offer has been made – buyers are not entitled to know the details or identity of such ‘other’ offers and hence can be disadvantaged or easily misled by agents into increasing their offer unnecessarily. Many agents intimate to buyers that they can only forward an offer on condition that the buyer takes the agent’s financial package /mortgage advice – there is widespread practice whereby agents will insist that the buyer needs to be ‘qualified’ by their in-house mortgage advisor before offers can be considered or passed on, or that an offer will be treated less seriously if the agent does not arrange a mortgage consultation for the buyer – this is both incorrect and illegal. An agent is legally bound to forward ALL offers without delay to the vendor and without qualification or discrimination.
This and other risks are not faced by buyers who deal directly with sellers.
Better communication, equality of bargaining, honest dealing and smoother transaction are often quoted as major benefits where agents are NOT involved in property sales.