Sunday Independent Article - Prime Time Investigates Estate Agents
Illegal activities of estate agents revealed on TV
Sunday December 10 2006
AN RTE Prime Time Investigates programme to be broadcast tomorrow is set to expose some of the worst activities of Ireland's estate agents.
The programme will reveal that some auctioneers acting for the sellers of property are in collusion with mortgage brokers acting for the buyer - directly contravening the Data Protection Act.
Where such information - the personal financial details of prospective buyers - is exchanged, it could allow the selling auctioneer to know how much money was available to a potential buyer.
According to an RTE source, the show will reveal underhand dealings, illegal practices and unscrupulous behaviour by estate agents.
Breach of the Data Protection Act is a serious offence and, according to the programme makers, the exchange of information on the buyer's financial strength is widespread in the estate agency industry.
The programme, which took several months to make and used undercover agents in its research, will also give examples of estate agents deliberately underselling property for their own advantage, despite their role as acting for the seller.
Another widespread malpractice discovered by the programme has long been suspected by critics of auctioneers. Several instances of fake bidders used to make dummy offers for properties are highlighted.
One insider is seen saying: "I actually witnessed one situation where there were two false bidders, there was one, there's a couple of genuine bidders, but there was a couple of false ones as well - on different sides of the room, so the auctioneer could look from side to side in the room and it worked very successfully. It got the prices up very quickly, everyone got involved in the bidding . . . it worked extremely well."
Claiming that the investigation, Buyer Beware, finds that public distrust of some estate agents is justified, RTE says it shows how a "lack of regulation has left house-hunters exposed to unscrupulous practices, before, during and after they make the biggest purchase of their lives."
Auctioneers have somehow escaped the stricter regulation imposed on most other players in the investment industry. More than two years ago, Minister for Justice Michael McDowell set up a Commission on Auctioneering to recommend reform, including the need for stricter controls on entry to the business (no exams or training are needed), misleading guide prices, sealed bids and gazumping.
The Commission reported more than a year ago, but there is still no sign of new regulations being implemented. One of its recommendations - that the controversial guide prices should be replaced by "Advised Minimum Value" has already been adopted by some agents, but has made little difference.
Last week, an impeccably placed political source told the Sunday Independent that it was unlikely that the new legislation or a regulatory authority would appear before the General Election. Auctioneers have traditionally exercised significant political clout, particularly at local level where many are county councillors.