Estate Agents Could Lose Out in OFT Shake Up

We’ve heard a lot about house prices recently, but the latest research from Hometrack suggests that house prices are rising in just 7% of postcodes. The table below is a comprehensive list of the postcodes in which prices are rising.

 

The Office of Fair Trading has indicated that it may try to make it easier for people to sell their own home.  Its studies have shown that a lot of sellers are getting a raw deal from estate agents and it wants to shake up legislation that dates back to 1979.  This legislation, on what counts as an estate agent, has hindered firms such as Tesco and Google trying to set up online services that would allow people to sell their own houses for a one-off fee.

The OFT’s studies also concluded that failure to shop around and to negotiate with agents was costing sellers £570m per year.  Indeed 32% considered the fees they had paid to a traditional estate agent to be poor value and 64% of sellers in England and Wales had admitted to not trying to negotiate a better fee.  More than a quarter of sellers (27%) had considered trying to use a different service to an estate agent.

If the legislation does get changed, then this could open the door for Google and Tesco, who have both previously tried to set up online services to enable people to sell their own homes.  Tesco were charging a one-off fee of £199, but estate agents and the online property portal ‘Rightmove’ successfully argued that by offering ‘for sale’ boards, Tesco was acting as an estate agent, and because it was not signed up to the estate agent ombudsman, it was forced to pull its online Tesco Property Market venture.

Potential changes to the current legislation could help people who are currently signed up to sole agency agreements.  A sole agency agreement means that you must pay the agent their percentage on successful sale, irrespective of whether they’ve introduced the buyer or not.  It could also increase the choice for vendors, giving them another outlet in which to sell their home, rather than the traditional estate agent or simply going it alone.  Buying agents, who act for home buyers in finding the right property and negotiating the best deal, could also be set to benefit.

Auctioning Properties Online

A US auction house, Real Estate Disposition Corporation (REDC) and a British property website, zoopla.co.uk, have recently joined forces to auction 57 properties online.  Held over four days, Zoopla said that the auction drew 75,000 visitors and 1,000 potential buyers registered for the sale.  Properties sold ranged from studio flats for £30,000 to a £750,000 farm in Lancashire, with the average property selling for £104,000.

REDC has shelved its venue-based sales in the UK to concentrate on its online operations after a drop in the number of repossessions.  The pair are now planning to hold more online auctions from 25th February; they will run from Thursdays to Sunday evenings.  Initially the site will be auctioning repossessions but it is intended to open it up to estate agents who will not be charged for listing the properties and will receive a ‘standard’ fee after the sale.