The government department of Business, Innovation and Skills has issued new guidance, saying that private sales portals do not need to conform to the Estate Agents Act.
The department's updated guidance now reflects changes introduced yesterday via the Enterprise and Regulatory Reform Act 2013.
Exempt businesses will be allowed to provide For Sale boards.
However, if the board contains the intermediary’s own contact details and if the intermediary deals with potential buyers on behalf of the sellers, the exemption “is unlikely to apply”.
Exempt business will also not be obliged to make disclosures, such as any self-interest in a property transaction, and will not have to belong to an ombudsman scheme.
Exempt intermediaries can also only pass on to prospective buyers the information provided by the seller in their advertisement.
In a statement, BIS said that private sales portals “facilitate private sales by allowing the seller to advertise their property and prospective buyers and sellers to communicate with one another without using a third party”.
It said its move follows the “OFT study into home buying and selling when we said that we believe that the best way to tackle the lack of price competition is through promoting and encouraging new business models”.
The new guidance continues to list letting agents as also being exempt from estate agency obligations.
The OFT’s updated guidance is at the link below.
Yesterday also saw another landmark for the industry – the repeal of the Property Misdescriptions Act came into force. The PMA is replaced by the Consumer Protection from Unfair Regulations 2008 (CPRS).
https://www.oft.gov.uk/OFTwork/publications/publication-categories/guidance/estate-agents-act/oft1508
Comments
Richard - I guess what you are saying is caveat emptor when it comes to buying property from an offline estate agent. They will sell you something you didnt want when you walked in the door for 16% over what the property is worth? Buy from private property portals and sell from regular estate agents I think in summary.
This I would say is great news! Now any private sale company has to take responsibility for what is on their details, as any agent has to. This would suggest that the pressure Tesco et al brought to bear to get rid of the property mis-description act has completely back fired on them and now means that anyone doing anything other than giving a board with which the vendor can put their own telephone number on, will need to be very careful about property details, measurements etc!
@ Richard. I agree with you, but the pity is there will now be a proliferation of unhappy sales (initially at our expense). I predict a hefty increase in unethical behaviour.
“OFT study into home buying and selling when we said that we believe that the best way to tackle the lack of price competition" - they clearly did not come to our town where agents are cutting their own throats for less than 1%.
But that would not be surprising.
Don't worry - this is not a threat. Selling privately is more likely to promote the benefits of using an agent than not. Just wait until you compare your speed of sale v private sales and your sale price v asking price. Even in the US, where savings of over 6% can be made, only 11% attempt to sell privately (and half of those are "in family" sales anyway). The NAR says that agents secure 16% higher prices than private sales.
The one thing a private seller does not have is a database of buyers. They are ignorant of the fact that most buyers buy something they would probably have not considered without an agent.
Don't get me started! Have a good day.
Richard