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Communicating with clients

"Communication is child’s play these days, so keep in touch with your clients", says Katrine Sporle, The Property Ombudsman.

Katrine Sporle
COMPLAINT

Katrine Sporle imageA case that The Property Ombudsman (TPO) was asked to review came from a seller concerning the lack of communication from her agent about her buyer’s financial position.

The seller said that when the buyer’s offer was presented to her, the agent did not inform her that they had a property to sell, and claimed that she did not find out this information until some ten weeks after she had accepted the offer. The seller accepted the offer on the basis that the buyer was ready to move and wanted a quick sale.

Communicating with clients imageIn response, the agent said that they did fully explain the buyer’s position to the seller and that they included details of the buyer’s chain within the Memorandum of Sale, which was passed to the seller’s solicitor. Nonetheless, the agent did acknowledge the complaint and confirmed that they will review their offer letters to ensure that all relevant information is conveyed to a consumer in writing going forward.

The agent made a goodwill offer of £200 to the seller, but this was rejected.

INVESTIGATION

In accordance with Paragraph 10a of the Code of Practice for Residential Estate Agents, at the time the offer was made, the agent had an obligation to take reasonable steps to find out from the buyer the source and availability of their funds and pass this information on to the seller. Such information should include whether the buyer needs to sell a property, requires a mortgage, claims to be a cash buyer or any combination of these. This information should be included in the Memorandum of Sales and/or disclosed to the seller, ideally in writing.

By not informing the seller of the buyer’s ongoing sale, the agent may have affected the seller’s decision.

Under Paragraph 10c of the Code of Practice, the agent was also required to continue these steps after the seller had accepted the offer and regularly monitor the buyer’s progress in achieving the funds up until the exchange of contracts.

The Ombudsman carefully looked at evidence provided and all documentation, which included communication and activity relating to the sale. It was noted that the agent communicated the buyer’s first rejected offer to the seller via a voicemail. The notes indicated that the agent had informed the seller that the buyer required a small mortgage and had a deposit available.

It was also noted that a Sales Negotiator from the agency queried whether the remaining funds required were to be sourced from the buyer’s own sale. It was confirmed by the mortgage adviser that this was in fact the case. Consequently, the Ombudsman was satisfied that the agent was aware of the buyer’s requirement to sell soon after the seller accepted their offer.

In the circumstances, the Ombudsman expected the agent to have promptly informed the seller of the buyer’s exact position following the communication with the mortgage adviser and to have included this in the Memorandum of Sale. This information was however not detailed, only the buyer’s requirement to obtain a mortgage and it was clear that the seller was not made aware of the buyer’s ongoing sale until some 10 weeks after she had accepted the offer. The Ombudsman was therefore persuaded that by not informing the seller of this information at the earliest opportunity, the agent may have, to some extent, impacted upon the seller’s transactional decision.

OUTCOME

Based on the evidence available, the Ombudsman was not satisfied that the agent had fully met their obligations under Paragraphs 10a and 10c of the Codes of Practice. That said, it was clear that they did regularly monitor the buyer’s progress in achieving the funds, regularly updated the seller over the progression of the sale, and kept in contact with all parties involved, in line with their obligations under Paragraph 12a of the Codes of Practice. These factors were considered when reaching a decision.

It was evident to the Ombudsman that the impact of this situation was that it raised an element of uncertainty in the seller’s mind during the conveyancing process when they discovered the linked sale, even though, in the event, the process was completed.

The Ombudsman did support this complaint to the extent that the agent did not inform the seller of the buyer’s exact position at the earliest opportunity.

The agent’s goodwill offer of £200 constituted a reasonable level of compensation and the Ombudsman reinstated this offer. This award was to reflect the avoidable aggravation, distress and inconvenience caused to the seller because of a short period of uncertainty.

July 26, 2017

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