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Secret estate agent payments add £100 to HIPs

With many estate agents hiring HIP providers to supply home sellers with a HIP, the Law Society is calling on sellers to check carefully how much their agent is charging for the HIP.

Law Society President Paul Marsh said: "The cost of the HIP charged to the home seller by the estate agent could be much higher than necessary and more than the agent actually pays the HIP provider.

"Because of these hidden referral fees the estate agent is overcharging the seller and making a secret profit.

"Sellers should ask for details of the exact costs to discover if the agent is charging them more than they should be, and more than the HIP actually cost the estate agent. They should also ask if the estate agent is receiving a hidden commission from the HIP provider, which would mean the estate agents are keeping part of the cost themselves.

"If the agent is paying £300 to the HIP provider and then charging their client £400 the client is paying an extra £100 unnecessarily. With the other costs involved in selling, these added costs are unwanted extras.

"If sellers do find their agent is charging extra for their HIP they should ask their solicitor if they provide a HIP instead, as solicitors are required to be fully open with their clients about fees. The added benefit of using a solicitor is that they are all strictly regulated and required to follow stringent rules, unlike estate agents."

The Law Society has also raised concerns over the new PIQs, which are now a feature of HIPs, requiring sellers to complete a questionnaire about their home.

Marsh said: "PIQs are supposed to provide information for potential buyers about the property, but if they are not completed correctly it could harm the relationship between buyer and seller, which is the last outcome anyone wants, especially now when the market is so slow.

"A solicitor will be able to assist in completing the questionnaire to ensure it is accurate."

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