Hidden costs in “free” sole-agency Hips

Following the full roll-out of Home Information Packs (Hips) last week, the BBC’s Money Box programme has pointed out that house sellers who sign up for a free or discounted Hip with their estate agent could be liable for a charge, if they withdraw their property from the market or change agent.

Estate agents maintain that the charges, which are frequently between £400 and £500, reflect the costs that have been incurred in preparing the Hip.

However, the average price most vendors are being charged for the packs is between £300 and £400 for a freehold property.

According to the Moneybox programme, one estate agent was offering a HIP for around £200 in return for sole agency, but an additional fee of £300 to £400 would be charged if the property was withdrawn from the market or placed elsewhere.

AHIPP, the home information pack providers’ group, believes that the fees being charged by estate agents are justified and Trading Standards has confirmed that estate agents are free to set their own withdrawal fees, as long as the client is aware.

The Estate Agents’ Ombudsman has stated that any vendor whose estate agent has not listed the pack as having a separate fee in the agency agreement may not have to pay a withdrawal fee.

Peter Bolton King, the chief executive of the National Association of Estate Agents believes that the fees should be proportionate and not be used as a profit making device.

Discuss this in the Finance Markets forums

Story link: Hidden costs in “free” sole-agency Hips