An elderly woman who sold her home to her own son after the property failed to sell through an agent was charged over £4,000 in commission.
The claim has been made in a letter to the Solicitors Regulation Authority.
It comes from Susan Larwood, a conveyancing manager in a law firm.
She told the SRA that her long-standing client had placed her home on the market with the firm which, after 18 months, had not sold the property.
The elderly home-owner’s son then agreed to buy the property, enabling her to move on, and she advised the agent accordingly.
Larwood said: “The agent wished her all the best – and then delivered an invoice for in excess of £4,000 for their services.
“When challenged, they then advised our client that they had a rolling contract and as she had not served adequate notice, their fee was due and payable.”
Larwood told EYE that her client paid up after being threatened with legal action by the agent.
The incident is one of several alleged in Larwood’s letter to the SRA about estate agents’ behaviour, in which she calls for the abolition of referral fees paid by conveyancing firms. She has also raised concerns about buyers being forced into using agents’ mortgage brokers.
In one incident Larwood said that a first-time buyer who worked for a bank and had a mortgage from them agreed, had her offer accepted on a property.
The seller instructed the agent to withdraw it from the market.
However, the buyer found it was still being advertised as available.
The agent told her that the property would not be withdrawn unless she saw their financial advisor and warned that if she did not, she could lose the property.
“My client panicked, spent 15 minutes with their financial advisor who filled in a form for a mortgage with the company that she works for, and which had already been agreed, and levied a fee of £500,” Larwood told the SRA.
Larwood alleged: “There are numerous transactions where this particular agent has advised my clients that they would prefer not to deal with me and that they should use their preferred solicitors as they would be able to act for both parties, which would make the transaction quicker and cheaper.
“This is a blatant lie on the part of the selling agent.
“This particular agent receives a referral fee for anything from £100 to £450 per transaction, which is added to the estimate of costs for the potential buyer/seller.
“Unfortunately there are so many cases that I can cite where estate agents have bullied, brow-beaten and threatened clients that if they do use their preferred solicitors, they will not acquire the property they wish to purchase.
“Bear in mind that these preferred solicitors are normally 100 to 200 miles away and have no personal knowledge of the area, as any local firm of solicitors would have.”
In her letter – written by Larwood in a personal capacity and not on behalf of her firm – she alleges: “Estate agents try everything they can to pull a client away from their existing solicitor if that solicitor does not agree to pay referral fees.”
Larwood also cites difficulties with three separate agents who sold properties via ‘sale by tender’, whereby the buyer pays the seller’s estate agent’s commission.
Larwood said she advises such clients that if they purchase through sale by tender, they will have to pay additional Stamp Duty.
The agents concerned told Larwood’s clients to go with their preferred solicitors, “as no additional Stamp Duty would be payable”.
The Inland Revenue, however, confirmed that Larwood was correct in her advice.
Larwood has asked for a meeting with the SRA to discuss referral fees and other matters relating to agents.
She has also told the SRA that she will name names.
EYE has been given the names of two of those that Larwood alleges engage in poor practice. Both are well-known brands.