The Government looks set to encourage the growth of private ‘for sale by owner’ websites, in order to encourage competition in the market.
It will look at the definition of ‘estate agency work’ in relation to online property businesses.
The announcement is part of the Government response to last year’s OFT market study report on Home Buying and Selling, which wanted to see more new business models enter the estate agency market, including ‘for sale by owner’ websites.
In its response, the Department for Business Innovation & Skills says the Government will consider the OFT’s recommendation “to amend the definition of estate agency work as part of a limited review of estate agents’ legislation, on the basis that we think it is sensible for activities that do not pose a risk to consumers to be outside the scope of the Estate Agents Act.
“However, we will need to balance the benefits to consumers from increased competition with the risks of reduced consumer protection. Customers need to know who they are dealing with and what level of protection they have.
“Consumers that do not use an estate agent are not covered by the protections in the 1979 Act, which now include access to free and independent redress for residential sales.
“If different business models can be properly signposted, consumers will be able to make an informed choice between a bespoke agency driven approach with all the protections of the Estate Agents Act, and a stripped down passive approach with reduced protection.
“They should also benefit from increased competition. Greater choice will also provide increased value for buyers.”
In its response, the Government also says it will consider giving Trading Standards greater powers to inspect estate agency premises, to ensure they are complying with legislation. Currently, Trading Standards must have a ‘reasonable suspicion’ that this is the case before they can enter an estate agency, but this could be dropped.
The Government did, however, reject an OFT proposal that larger ‘headline’ fines be imposed on agents who continue to trade after being prohibited. It also rejected the OFT’s suggestion that a ban on referral fees should at least be considered. But it does say that if the OFT comes up with ‘clear and robust’ evidence as to consumer detriment, it would consider a ban.
Finally, the Government makes it clear that it has no intention of re-introducing HIPs or Scottish-style Home Reports, but does say it is supportive of a “voluntary industry-led approach to improving the consumer experience”. It also wants to see the take-up of e-conveyancing.
https://tinyurl.com/3tdaema
%20A%20property%20tale%20for%20our%20times.png)
Comments
www.internet-homes.co.uk These guys are a for sale by owner company who dont charge a very cheap price and no commission on completion and do the same as estate agents and more i.e post propertys across the UK search engines and ones in europe and also search for buyers aswell. The internet is clearly the way forward with everything and i feel for sale by owner websites such as this will overtake estate agents one day.
Its simple, people who try and deal with the petulence and attitude that most EAs do on a daily basis will FAIL. If pople could acutally communicate in a chain without throwing their dummy each time they don't get 100% their way EAs would be out of business.
Thats without the professional knowledge they will lack.
SImply as stated before if there is going to be more and fair compettition then all have to abide by the same rules, not as stated where agents and their clients have to cover all bases but private sellers can do what they like.
AC - I agree its what is required not sure if the many esatblished EA's will convert to this methodology, they often claim %fee is the only show in town!
The 'fool' stated! (FTB Dan) To clear up the confusion I shall repeat myself.
For many buyers an EA will be invaluable.
For some buyers they will be happy to sell themselves.
What a joker!
1. For "MANY BUYERS", what is he saying? I will answer him anyway (even if it means lowering to his level). A buyer will go to an estate agent if they are marketing the house that buyer wants to buy (fool) and yes, the service they get will be invaluable.
2. I guess he means some OWNERS, may have a go at selling their home privately (fool). I will answer this too. Yes, there will, there will always be someone ploughing his own furrow. I have 2 houses up for sale 'by owner' in my area right now. Both overpriced, both asked me for 'FREE' valuation both went higher than I advised, neither have sold. There will also be some bright spark who wants to do his own conveyance too. I had one selling through me this year who did this. What a laugh. Despite all the advice he wanted to cut out the solicitor (save a quid). Guess what happened when deposits needed to be held on exchange? I got it through because I am experienced and helped, with more advice.
Sure, there will always be one or two 'privateers, but it will never be the norm.
Sorry to pop any bubbles.
These sites will be a magnet for the sort of cheapskates who frequently are price fantasists as well. I don't think any of us should be worried.
A good EA provides local market nous, communications services, good marketing facilities and most importantly, negotiation skills at the point of closing a deal followed by sometimes very hard work to keep a deal on track.
Get a reputation for these things and we have nothing to fear from a web site.
@FTB Dan. You seem not to know who was behind Rightmove and and since it's selloff who it's biggest rivals Zoopla's major shareholders are. The big corporate agents.
Yes I can hardly see Connells, LSL and Countrywide allowing their biggest sales tools to be piggybacked by individual vendors.
http://www.estateagenttoday.co.uk/News/Story/?storyid=3320&title=Seats_on_board_at_Zoopla_for_big_three_agency_chains&type=news_features
@Trevor Mealham INEAmls on 2011-07-29 08:06:34
Another spot on.
I know people who wouldn't give a second thought to sexing up their property description to make it more saleable.
@AceofSpades on 2011-07-29 17:19:39
Spot on.
My post (biased towards it as I may be) shows you WHY the 'sell it yourself ship' has been here for years, but never left the docks.
Yes, SOME people will ALWAYS sell privately. But the vast majority of people will get someone to sell it for them. A more likely situation than a 'sell it yourself revolution' is a more American style approach - we are kind of seeing it now through some successful personal franchise run outs.
Taking on the role of an agent yourself to negotiate, arrange/carry out viewings, manage/resolve/rescue chain collapses and co-ordinating with soicitors is a backward step to many sellers - plus they have no experience in the vast majority of cases!!
We all want quick, easy and hassle-free services. We pay someone, they get the job done.
How many sellers have the time and availability (all day everyday) to sell a property properly? Let alone with no experience or expertise.
Private selling is an option to some people and good luck to them. The lion's share of sellers won't even bother.
I feel a bit foolish replying to you as it is becoming apparent that there is some truth in the post by FTB Dan real indentity on 2011-07-29 16:04:58 .
Why are all you EAs so concerned?
It won't be a threat to your businesses. I remember agents worrying about TESCO and their 'estate agency' activities, and they are hardly mentioned today.
If a seller wants to sell privately then let them carry on. Some will be successful but the majority will still use an agent.
To clear up the confusion I shall repeat myself.
For many buyers an EA will be invaluable.
For some buyers they will be happy to sell themselves.
Of course, of course, you can list situations where it would be impractical, but I find it astonishing that so many of you simply refuse to countenance the idea that anybody might actually want to sell themselves online, and that the major portals might take their business. That is really not controversial, surely??
Secondly, given that volumes are low, and the majority of you also refuse to countenance the idea that prices will crash, surely you accept that volumes will also remain low. So a combination of X% of vendors going direct online, and continued low volumes will in turn result in fewer EA’s in the next decade compared to the last, characterized by a booming market.
Or is everyone sticking to the idea that at the next super secret bankers bosses global meeting they will decide that the world’s financial system is not really over indebted and they can start lending silly money to poor credit risks again with no consequence?
I had that worked out ages ago 'real identity'.. Light Drizzel
Theory?????? - Is FTB Dan real or part of EAT, sent to post absolutely ignorant views to make us post to correct him. I am never responding to him again!
FTB Dan - The travel agent comparison is a bit of a loose one. For a holiday, you choose a location, enter your details and click pay. After that, all you have to do is turn up at the airport!
Imagine if a housing transaction was the same? What a World it would be and your comparison would be valid!
We live in a World where you get a any takeaway delivered to your door in 40 minutes. You can do your supermarket shop from your desk at lunch time and have it delivered to your home. You don't even need to go into your bank these days. You do an airport check-in online. So many examples.
Some people refuse to use the 'self-service' tills at Tesco!
In an age where we 'click and go', do people genuinely have the time/can be bothered to sell their own property, manage chains (that will collapse) and deal with disputes themselves? I'd say not now, or in 10 years time.
Here you go Mr or Mrs Agent, sell my property (you will probably get a better price than me too) and take 1.5%. I'll get on with my life!
There will always be a charge to sell privately (if you want to market it well/properly) and in many cases, the cost involved is worth paying that bit extra to get a reputable agent to do it for you.
FTB Dan
When RM offer a full service to private sellers I imagine EAs will leave en-masse.
It's gonna take a lot of private sellers to replace that revenue!
Sounds like whoever wrote this at the 'Department for Business Innovation and Skills' has read a lot of corporate mumbo jumbo buzz words but has never worked in the real world...
..."If different business models can be properly signposted, consumers will be able to make an informed choice between a bespoke agency driven approach with all the protections of the Estate Agents Act, and a stripped down passive approach with reduced protection"...
In all seriousness, if they do introduce 'a stripped down service with reduced protection' it will only take the Press a few months to champion the cause of a little old granny who has been scammed or robbed after trying to sell her house privately on one of these 'for sale by owner' websites.
It will be another shortlived fiasco, just like Hips.
Chain checking will be impossible. How will data protection apply? Property Misdescriptions will be rife.
There is no way I would become embroiled in a chain of 5 private sellers.
Sales will fall through ad infinitum as seller and purchaser 'communicate'.
At the end of the fiasco the public will realise why a good estate agent is worth the fee. I've lost count of the number of vendors/purchasers who thank us and say they'd never have completed without our help and advice!
Started in this job 25+ years ago and private adds existed then as now, great source of instructions as most fail and the poor folk then realise all they have done is lost money and valuable time and will now get less as they have ruined the marketing.
Another one to boggle the mind! £59 per month.
http://www.myhouseadvert.co.uk/
Good web page, but do the maths! If they want income £10k pcm they need 170 listings. Do you have any idea how many calls 170 listings would generate? They couldn't service it unless they pay people less than minimum wage to sit on their phones. Also note, no VAT. Not big enough yet?
In fact they have 43 listings, 4 seem sold. Again, no frenzy from the public to sign up?
Come on! Its the biggest asset of most people. Is £3k too much to have an experienced, hands on professional look after the transaction for you? I think not.
That’s it! FTB Danny guarantees it it must be so, debate not required he has spoken!
FYI lad/lass sorry to disappoint, for the last 10 years such commentators such as you, have preached the end of EA due to the internet and like you, quote the Travel industry and like you, are wrong of course.
The choices are already there, the worry is the quality of service and the kind of people behind the lovely web page.
Look at this bunch, spelling mistakes, warts 'n' all. 200 or so listings, hardly taking the maket by storm, maybe it's the quality???
http://www.freepropertyadd.com/index.php
If RM decided to go 'public' how big would the call centre need to be? You know the one? Viewer wants Saturday, buyer can only do Sunday, 10 calls later the viewing gets booked at a time/day agreed by all. Try that with 800,000 properties on the books!
Could drill deeper with all the other calls that come in, but hey! Whats the point, who am I educating?
I suppose you can hardly expect EA’s to be in favour of people have the opportunity to bypass them. But there will be some who would not dream of selling a house themselves, others who would feel perfectly confident in doing so.
Besides, I absolutely guarantee that within ten years Rightmove will have a whole suite of online tools for people to market and sell their house themselves through the site. The future will not see an end to EA’s but certainly fewer of them.
Just like what happened with Travel agents.
Its already here thats the point. Its called a free market. What isn't fair is that someone can sell privately and not have to adhere to the same standards expected when selling through an agent. thus people buying privately are much more at risk than those buying through an agent.
Yet again those in power who know nothing of where the issues like are seeking to meddle.
Then again none of the parties can run a country so guess its to be expected.....
In the end there will be a middle ground.
A mix between normal high street estate agent and online agent.
They will charge customers to put it on the market (Gold/ Silver/ Bronze).
They will charge for added extras.
They will charge a completion fee.
But they will be "real" estate agents with shops & everything.
It is coming.
Maybe we should encourage more competition in the Government so that people will try and keep their costs down and provide a better service? Maybe do something constructive with their time?
Maybe rather than more EPC regulation from Europe we could do the same their and reduce the members nations payments and improve their financial situations.
Just a thought anyone want to offer me odds of it happening?
It will be the general public who will decide whether to use Estate Agents or Private to list websites. In the UK Estate Agents score far more highly judging by the number of Estate Agent For sale boards prominently displayed.
Why do governments get all this stuff sooo wrong. The idea that there isn't enough competition in the marketplace.
Can you imagine a nice chain of 5, all private selers?
If our leaders conducted any research into our business, not looking at 'potential' buyers or focusing on 'potential' vendors, but asked real vendors with sales agreed and progressing towards completion, they would finfd the overwhelming frustration of both vendors and buyers are the financial institutions and the solicitors.
Look there first if uou want to improve the Great British home buying experience.
Can you imagine a nice chain of 5, all private selers?
If our leaders conducted any research into our business, not looking at 'potential' buyers or focusing on 'potential' vendors, but asked real vendors with sales agreed and progressing towards completion, they would finfd the overwhelming frustration of both vendors and buyers are the financial institutions and the solicitors.
Look there first if uou want to improve the Great British home buying experience.
This is a bad, bad idea....
So my corporation tax, national insurance, VAT and income tax is going to be used to attempt to cut my own business.
Cuckoo. Cuckoo. Cuckoo.
Apologies to all for my typing being a bit off in my quotes this morning!
Its a pity that the OFT just refuses to believe that the public, despite having access to sell it yourself models or, on-line models actually PREFER to use 'real' estate agents in the main. They vote with their feet
Certainly there is a small market of successful on-line agents but the public take up has not been strong. The market works fine; it just needs better policing and a better conveyancing system
Fiddling while Rome burns, indeed.
Anyone selling a house should do so under the same contraints thus creating an 'equal' and 'competative' market.
There is a house in my area that needs structural work - the vendor just goes on with another agent and hides the fact - illegal and will get found out however this is the situation when there are professionals involved.
If the Government is so interested in such competion why not deregulate Doctors and we can go back to back street surgery?
Time they stopped fiddling in Rome burns.
Be it agent or FSBO (private sellers) any Act to "protect" the consumer should be on equal grounds. A buyer buying from an agent has redress and agents have guidelines to operate under.
To encourage private sellers who don't know the first thing about PMA etc, etc is dangerous. So how does the government intend to police the private sellers who will mislead buyers. PMA and the EA Act should apply to the process not just agents. If a private seller wishes to save a fee, then they should accept paying the PMA fine when they get things wrong.