An online auctioneer has hit out at exclusive partner agreements between agents and traditional auction houses.
Stuart Collar-Brown, co-founder and director of online property specialists My Auction, warns that tying agents into long-term exclusivity contracts is resulting in lost business for firms and a lack of choice for sellers.
He told Estate Agent Today: “We recently tried to work with estate agencies in Leeds and Blackpool for the sale of three properties which we had been instructed to sell by auction and found that they were already tied into contracts with other auction houses.
“This meant they were unable to work with us on the sale of these properties, resulting in thousands of pounds in lost fees for these agencies and our seller unable to work with the most suitable estate agent in that area.
“These exclusive partner agreements are outdated and should no longer be used within the industry.
“Most estate agents are signing these contracts without reading the fine print and fully understanding the ramifications of the contract.
“Those who break the contract risk paying a fine that is typically a percentage of the fee they would have earned from the property sale.”
He highlighted that agents don’t have exclusive agreements with other third party suppliers such as solicitors or mortgage brokers so queried why they should limit themselves on auction partners.
Collar-Brown added: “With the typical length of these contracts being 12 months with a six-month termination period and an automatic renewal, many estate agents are unaware of the fact they are even still in contract with an auction house they potentially signed a contract with many years ago but don’t actively work with.
“In a situation like this, the partnership is not tried and tested and there is no track record that the partnership is one that would guarantee the best results for the particular property nor give the best service to the seller which has to be paramount in any recommendation an estate agent makes.”