Agents in secret deal for Home Information Packs |
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19th May 2009
Channel 4 News have alleged that some Estate Agents have been involved in secret deals with HIPS providers. I would like to report that this is
absolutely true . I know of many agents who receive commissions for simply introducing a vendor to a HIP provider. Others will provide a HIP, instruct a provider and pay them a lower figure keeping the profit.
HIPs are as competitive as any other product. As such, there are some good deals out there. Yet we have heard that the cost of a HIP can vary by as much as £200! Some HIPs providers have approached Bushells and offered us a commission for referrals. Such commissions vary from £50 per HIP to a fixed price which we could sell on to the vendor at a profit.
This practice is widespread and not something we support. Far from it. However, its not unusual for Agents to receive commissions from contractors, solicitors, inventory companies and a whole host of service providers. Whether it's wrong or not is not our decision. The National Association of Estate Agents Rules of Membership requires disclosure of additional fees and secret commissions from other sources. If agents do this, then frankly, they have done nothing wrong. However, we choose not to accept any such payments and rather ask the supplier to pass on any sums offered as a discount to our customers.
We have two preferred HIP suppliers - Moving House and The Home Information Bureau. We recommend vendors to them and Vendors pay them directly.
Bushells do not receive any commission - instead we demand speed of delivery and quality of service. We receive a copy of the Floorplan which we are permitted to use in marketing at no cost to us in return for our recommendations, but never a penny in commission. In the interests of transparency, I confess to one good lunch at Roast in Borough Market, but some things are hard to resist!
We ask the seller to pay the HIP provider so that the vendor has ownership of the same. If the agent pays for the HIP and agrees to recover the cost from fees in the event the property is sold, then the agent owns the HIP and should the vendor wishes to dis-instruct them, has to commission a replacement.
Our HIPs cost from
£185 plus the cost of a Local Authority Search and plus VAT for a freehold property.
OK, so its not a scandal of the magnitude of moat cleaning, or claiming a second home allowance on a home you don't have, but Bushells is pleased this matter has been highlighted at last.
