Earlier this year, the Regulation of Property Agents (RoPA) working group announced the initial details of plans for mandatory qualifications and industry-wide regulation of estate and letting agents.
I believe that these measures, if implemented correctly, are essential for the future of the sector and will help to improve the public reputation of the industry.
They can contribute towards agents being treated with more respect and allow for a more transparent and hassle-free moving process with less friction.
Here at LetsBid Property, we have partnered with over 150 agents and circa 200 branches to provide a Modern Method of Auction service. During this time, we have encountered hundreds of staff and while most experiences have been positive, some estate agents are still way off the pace in regards to technical knowledge.
These deficiencies are mostly in regards to what happens after a sale is agreed, including the financial and legal processes and therefore mandatory qualifications must cover these areas comprehensively.
What should we expect from the best estate agents?
What really differentiates the good estate agents from the outstanding ones is a commitment to continuous professional development and investing in themselves.
It’s not just about getting a mandatory qualification and stopping, it’s about becoming the local expert and restoring the trust in the property sector.
Consumers should be able to expect their agents to know the market inside out and here are just some of the things the best agents always have a handle on:
• Recent local sales as well as those of their competitors.
• What properties are currently available on the market.
• Where current prospective buyers are coming from.
• How long local searches are taking on average.
• The latest with the local planning system.
• Understanding the basic principles of construction.
• Details of the major developments and infrastructure projects in the local area.
• The best local schools and their catchment areas.
Industry improvement will take time
Some people may think that introducing industry regulation and mandatory qualifications is solely about ridding the market of rogue operators. While this is clearly an important objective, I believe the remit should go further than this and be about creating better agents across the board.
However, this sort of progress is not going to happen overnight. Once an agent has a qualification, they are not automatically going to become a ‘super agent’. This comes with experience and is not anything you can buy or achieve by putting letters after your name.
The more agents are exposed to, the more they will learn but the introduction of a compulsory qualification will start that groundwork and accelerate the learning.
As an industry we need to be prouder of our estate agents as the public trust them with one of the single biggest transactions of their lives. In most cases, agents do a good job, however we need them to go from good to great. More dedication to being a property expert through learning can kickstart that process.
I’ll never forgot the experience I had with an agent when I purchased a property in South West London in 2017. The property was intended as a project to refurbish and sell. However, due to market conditions, I decided to sell for a quick profit without refurbishing.
I believed I bought well and although the market for prime properties was not great, the agent I worked with blew me away.
• They knew exactly what was happening in the local market.
• They understood I was after a quick sale, but managed my expectations by letting me know. searches taking 6-8 weeks were needed to facilitate an exchange.
• They were prepared with local planning advice in terms of what kind of extensions I could do due to the area being a conservation zone (they had previously helped next door with their home).
• They recommended local tradesmen to help me make the house more presentable.
Because of my property background, I was well aware of the above and I had my searches ready.
However, this agent was the only one of four to wow me and guess what? Their valuation was the lowest of them all, but the most realistic.
They subsequently sold the property for me within three weeks of instruction without using a portal.
What are the potential downsides of mandatory qualifications?
Despite the obvious need for mandatory qualifications, there are likely to be some teething problems and are several potential downsides.
The first is cost. How much it will it cost to qualify a whole team and will this have a negative financial impact on smaller independent agencies?
Current market conditions have been tricky for some time, due to Brexit and a range of other factors. The effects on small high street agencies have been demonstrated clearly in a number of reports. The most recent - published by PwC earlier this month - shows that 143 estate agents’ offices closed in the first half of 2019.
The government must consider the modern challenges of running a successful high street business and seek to ensure independent agents are not priced out of getting qualified and subsequently out of business.
Another potential cost issue for agents is if mandatory qualifications will lead to staff demanding higher salaries from their employers as they’ll now be considered more professional.
Time will be another key consideration. How long will it take to gain qualifications and how much time will agents be expected to take away from their core office duties to gain their accreditation?
If all staff are required to gain their qualifications by a certain date, this could provide business owners with some headaches when it comes to making sure the office is adequately manned at all times.
An industry-wide system like this could also pose question marks over recruitment, particularly as there is a high level of churn in the agency sector. For a while it may not be so easy for larger corporate agencies to have such a high level of staff turnover as all staff will need to be qualified.
As with all industry regulation, once it is introduced the main challenge will be enforcing it effectively. There is no point introducing mandatory qualifications with the aim of ridding the industry of rogues if no-one is checking to see that everyone working as an agent has the necessary accreditation.
It will be interesting to see how long agents are given to get their affairs in order and if there will be any grace period provided.
All in all, however, the new qualifications can be a success and contribute towards showing the public just how valuable it can be to work with a professional and knowledgeable estate agent.
*Milton Rodosthenous is director of LetsBid Property