Inadequate supervision increases the risk of precarious housing transactions

House purchases are usually the largest purchase made by households, in a complex field in which buyers and sellers may find it difficult to safeguard their interests. Therefore, the Swedish National Audit Office has examined central government supervision of estate agents.

The overall conclusion is that the Swedish Estate Agents Inspectorate, which has the main responsibility in this field, could design its supervision to contribute more to a reliable housing market for both buyers and sellers.

“The Swedish Estate Agents Inspectorate needs to have systematic planning to balance the severity of the problems with the benefits of supervision. This is not currently happening,” says Auditor General Christina Gellerbrant Hagberg.

The Swedish Estate Agents Inspectorate performs its supervision effectively once a case is opened. However, one challenge is that certain types of violations are more difficult to investigate. Based on developments in recent years, the Swedish National Audit Office notes a risk that the Swedish Estate Agents Inspectorate too often refrains from initiating supervision based on reports or violations that are difficult to investigate.

In 2024, the Swedish Estate Agents Inspectorate introduced a supervisory strategy with criteria for prioritising between different interventions. The Swedish National Audit Office considers that these criteria do not provides adequate guidance for decisions on which reports should lead to supervision.

Furthermore, the fact that the Inspectorate does not fully use available statistics from its supervisory activities as a basis for planning adds to the risk of supervision not being effective.

The Swedish Estate Agents Inspectorate has recently expanded its authority-initiated supervision, which is not based on reports. However, this supervision has not targeted the most serious violations. Instead, it has mainly addressed non-payment of annual fees to the Swedish Estate Agents Inspectorate, or checks of whether estate agents have debts or are convicted of crimes.

“For supervision to be effective, more authority-initiated supervision is needed with a focus on risks that can directly affect consumers. The Inspectorate needs to develop its approach to risk-based selection, as many problems are difficult for consumers to detect and report,” says Erik Trollius, project leader for the audit.

The Swedish National Audit Office also notes that while it is relatively easy for consumers to report estate agents to the Swedish Estate Agents Inspectorate or the Property Market Complaints Board, many people who are dissatisfied do not take advantage of this opportunity. This is probably due to a lack of knowledge about estate agents’ obligations and the possibility to file a report.

The audit also shows that supervision by the Legal, Financial and Administrative Services Agency of the Property Market Complaints Board has been very limited.