Walthamstow MP Stella Creasy has hit out at “double-charging” estate agents.
The shadow consumer minister claims new evidence shows estate agents, including at least one in Walthamstow, are taking advantage of the intense demand for properties by charging up to 2.5 per cent to introduce prospective buyers to properties.
She pointed the finger this week at Douglas Allen estate agents in Hoe Street, Walthamstow, saying their use of the fee, known as sale by informal tender, forces some buyers to offer a lower price in order to recoup the fee.
Douglas Allen admits it does charge the fee, along with many other agents, on a minor percentage of its properties but says it is a standard and legitimate practice.
The business strongly denies the claim that fees are doubled and said sale by informal tender achieves the best price for clients while ensuring transparency for buyers.
Ms Creasy is urging swift action before the practice becomes more widespread.
“This means they have to offer a lower price for a property as they have to cover this cost as well as the purchase price,” Ms Creasy said.
“Consequently sellers could get less money for their property despite also paying for the estate agent’s service.
“The only people who do well out of these kinds of ‘sealed bid’ deals are the agents who get a nice fat fee from both the buyer and the seller.”
A spokeswoman for Arun Estates, Douglas Allen’s parent company, said the approach is welcomed by both buyers and sellers.
“Sale by informal tender is far from a new concept and has traditionally been used in the marketing of land,” Loretta Strong, client liaison director of Arun Estates, said.
“Whilst the majority of properties we market are still by the more traditional private treaty method, I reiterate that our buyers and sellers who are willing to enter into the sale by informal tender process find it straightforward and productive.”