Although many people are working with 'sourcing agents' to help them find properties for their portfolios, it still amazes me how few know about the recent changes within the industry to protect consumers who use their services. This article is to make you aware of those very necessary changes and what you need to check about the people you work with going forward.
In case you are not familiar with the term, or have never used a property buying agent or sourcing agent before, let me enlighten you. A Buying Agent is someone who receives instructions from a person to act on their behalf to search for property and negotiate the purchase price. Someone who employs the services of a sourcing agent is looking for help to purchase property (either their own residence or property for investment purposes, etc) for a number of different reasons. These could range between the following:
- To purchase property outside of their own immediate area
- Due to lack of time to find property themselves
- Don't like the activities involved in having to source
- Want to be as 'hands off' as possible
- Want to work with someone else due to lack of experience
- Etc, etc
In reality, there are numerous people and agencies who have set up and operate under this type of remit across the UK. In essence, there is nothing wrong with this. The problems occur when people are unaware of what can happen if something goes wrong and they end up with something they are not happy with.
Whilst there are indeed some very reputable sourcing agents in the market, I have also worked with several clients who have previously fallen foul of working with a sourcing agent and ended up in a nightmare situation for one reason or another. This is due mainly to peoples' naivety about how this business works, which means that they can become easy targets for the less scrupulous or perhaps inexperienced sourcing agent. I have even come across people who I meet at various property events who call themselves 'sourcing agents', yet on further questioning, some have barely any experience in the world of property at all. They may never even have bought a property before themselves! This, alongside agents who try to hide important facts from people, who rip people off by taking their registration fee and then disappear and even those who advertise amazing deals only to try and fob people off with unsuitable or 'second rate' properties. It's no wonder there has been the need for a change of regulation!
So what are the changes and when did they come about? On the 1st January 2014, The Property Ombudsman Scheme launched a brand new 'Code of Practice' for Buying Agents. Details of this can be found by visiting this website
and clicking here
for the actual Code of Practice. To give you an idea of what buying agents must now adhere to, here is an indication:
- Comply with all laws relating to residential estate agency
- Be a member of a client redress scheme
- Adhere to anti money laundering regulations
- To name but a few...
In my opinion, it warrants taking a really close look at who you are working with or thinking of working with in this respect and it would be worth asking a few pertinent questions as to their business operations. Just as any industry, this is a 'buyer beware' situation and you must do your due diligence and research before you buy. Can you afford not to?
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Safe Property Sourcing!
Hazel de Kloe
Property Investor | Property Mentor | Speaker | Author
The contents of this article are for educational purposes only and we make no recommendation of any particular investment. The price of property can decrease as well as increase and you make any investments in property at your own risk.
© Why Property Works 2015 | www.whypropertyworks.co.uk