Estate agents: the checks that are legally required

Which checks does an estate agent legally need?

Residential estate agents in the UK must belong to a government-approved redress scheme. There are two: The Property Ombudsman and the Property Redress Scheme. Letting agents and property managers in England and Wales must belong to one as well.

The scheme matters because it is your route to an independent decision if something goes wrong. It can award compensation, and it costs you nothing. An agent who cannot name their scheme is telling you something important.

How do I check an agent?

• Ask which redress scheme they belong to.
• Check the scheme's own member list on its website. Do not rely on a logo.
• For lettings, ask to see their Client Money Protection certificate.
• Ask whether client money is kept in a separate account.

What is Client Money Protection?

Since April 2019, letting agents in England who hold client money must belong to an approved Client Money Protection scheme. They must show their certificate at their office and on their website. Wales and Scotland have their own rules for letting agents.

The point is simple. If the agent goes bust while holding your deposit or your rent, the scheme pays it back. Without cover, that money can be lost.

How do estate agent fees work?

Selling fees are usually a percentage of the sale price plus VAT, and they can be negotiated. Ask for the exact percentage, whether VAT is included, and what you would owe if you pulled out. Also ask whether any fee is still due after the contract ends.

Do not choose on the fee alone. A cheaper agent who sells for less, or takes much longer, can cost you more than a dearer one.

What kinds of contract can I sign?

The type of agency changes what you owe, so read it before you sign.

• Multiple agency: you can use several agents. The fee is usually higher, and only the agent who finds the buyer is paid.
• Sole agency: one agent only. You may still owe a fee if a different agent finds your buyer during the contract.
• Sole selling rights: one agent only. You may owe the fee even if you find the buyer yourself.
• Tie-in and notice periods: how long you are stuck with the agent, and how much notice you must give to leave.

How do I judge a valuation?

Ask two or three agents for a valuation, and ask each one to explain it with sold prices of similar homes nearby. Be wary of an agent who simply gives the highest number to win your business. A price that is too high can leave a home sitting unsold.

You can check what homes on your street really sold for. In England and Wales, HM Land Registry publishes sold prices free. Ask the agent how many homes like yours they have sold recently, and how close to the asking price they got.

What must an agent tell me about a property?

National Trading Standards guidance says agents must give certain key facts in a listing. These include the asking price, the tenure and the council tax band, with more details to follow, such as the length of a lease, service charges and known problems. Leaving out something that would change a buyer's mind can break consumer law.

If a listing is silent on ground rent, service charges or lease length, ask directly. Get the answer in writing.

What should I ask an agent?

• Which redress scheme are you in, and can I check?
• What fee do you charge, and is VAT included?
• Which kind of contract is this, and how long is the tie-in?
• How many homes like mine have you sold nearby?
• How close to the asking price do you usually get?
• Who will deal with me day to day?

What are the warning signs?

• A valuation far above the others with no sold prices to back it.
• Pressure to sign on the spot.
• A fee for services before you have sold anything.
• A reluctance to say which redress scheme they belong to.
• A contract with a long tie-in that you were not told about.

What are the rules for tenants?

In England, the Tenant Fees Act 2019 bans most fees for tenants. You can lawfully be charged rent, a limited deposit, a limited holding deposit and a few other defined items. Anything else, such as a charge for referencing or an inventory, is banned.

Scotland and Wales have their own rules. In Scotland, sellers also have to provide a Home Report, a single survey and valuation, and the way offers are made is different.

What if an agent behaves badly?

Complain to the agent in writing first, and give them a fair chance to reply. If you are not satisfied, take it to their redress scheme. It is free to you, and it can award compensation. Trading Standards deals with breaches of consumer law, and Citizens Advice can help you decide what to do.