CHANGES to legislation may lead to companies including supermarkets and banks entering the house selling market by offering a cheap but basic “online marketing” service for people looking to sell their home.
These changes to the Estate Agency Act 1979 have been met with anger by many estate agents and membership associations, for three main reasons.
Firstly there is a great potential for house sellers who are merely placing an advert online to fall foul of the many and varied pieces of legislation that estate agents have to adhere to. These laws cover a multitude of considerations from the way an estate agent is allowed to measure, describe and market a property, to guidelines relating to how buyers must be treated when offers are received. Furthermore, house sellers who go it alone without the support of a good estate agent are at a greater risk from “rogue” buyers.
Adam McHenry of Cadman Homes in Rugby, said: “Stories are sadly commonplace about buyers lying about their funds, house sale or any chain they may be in, just to get an offer accepted. Buyers have been known to then renegotiate the offer once solicitors are instructed or worse, hold the vendor to ‘ransom’ over some points, or fixtures and fittings, for example.
“Unfortunately we have many people come to us after trying to sell a house themselves and experiencing problems with that buyer. Equally we have buyers that tell us some really scary stories of vendors mis-measuring rooms, or for example promising to complete certain works as part of a sale and then reneging on that agreement”. Adam continued.
The second big concern is that traditional estate agents will lose out on business, as sellers that are feeling the pinch of the recession look to save costs, especially with a lot of people in or near to negative equity. This is a great concern to the industry as estimates have predicted that up to 500,000 jobs may be at risk as large national chains are forced to lay staff off to keep shareholders happy, and smaller, local firms will also have to potentially scale back recruitment and expansion plans.
Obviously with internet only advertising, and therefore a cheaper cost to the consumer, traditional estate agents are also worried about the affect this will have on the fees they can charge the public.
“Many high street estate agents will look to achieve circa 1.5 per cent +VAT of the selling price. Some local agents will try to achieve upwards of 2 per cent + VAT which is several thousand pounds more than a cheaper, and albeit less effective internet advert,” Adam added.
“You cannot compare the services and advice offered by a good local agent with what is in effect an advert on a few websites. It’s basically like advertising a car on Autotrader - you have to sort the wheat from the chaff when people come to look at it.”
“The main factor to consider is that many estate agencies are locally owned, and that means money going back into the local economy. At Cadman Homes we are a wholly family owned and operated firm, and we all live and work in the Rugby area which means as we grow there is a lot of reinvestment in and around Rugby, if the faceless corporations can enter the market this money will be taken out of the area and put into the pockets of shareholders and executives”.
For more information telephone (01788) 560 905 or 024 7622 2262 today, or pop into 1 Castle Street, Rugby - next to the Advertiser. If you can’t call during office hours remember their office number is staffed 24/7 for your convenience.