The Inside Edge
In recent months there has been a drive by some property vendors to move away from the traditional estate agents and to look to sell their property by other means. Previously, many private websites had to be treated as Estate Agents by law but new government plans could be set to do away with that legislation and make the whole process much simpler.
The benefit of selling privately is obvious and anyone who is able to complete a sale in this way is able to dispense with estate agents’ fees. Private Websites offered a money saving alternative until they were brought under the estate agent classification but the government now plans to allow both types of business to operate under entirely separate rules.
This could lead to an even bigger move away from traditional forms of selling but there are those within the industry that are concerned over the proposals.
“These [planned changes] mean that prospective homebuyers and sellers will find it harder to distinguish between intermediaries and traditional estate agents,” said Peter Bolton King of the Royal Institution of Chartered Surveyors.
“Consumers could, perhaps unknowingly, be left responsible for undertaking their own detailed sale negotiations without the advice and guidance of a property professional.”
Mr Bolton King also felt that a greater move towards private sales could lead to more aborted transactions which could, in turn, impact on the property market as a whole.
“This could lead to delays, increased costs and even sales falling through, causing frustration and stress for all involved,” he added.
However, the government believes that the moves are necessary and that they will encourage and increase transactions in the months and years following their implementation. In short, there is a clear suggestion that lower fees might attract more vendors and lead to quicker completions.
One of the problems under previous legislation was highlighted in the case of Tesco. The supermarket giant had a website back in 2007 that charged a flat fee of just £199 for sellers to list their properties. However, once that site came under the estate agent umbrella, Tesco couldn’t justify the additional costs or time that was involved and the portal inevitably shut down.
“These intermediaries help buyers and sellers contact each other at a low cost, but do not engage in other estate agent activities, so it is unfair to expect them to go out and check all the property details of all the sellers on their websites,” said Jo Swinson, Consumer Affairs Minister.
“Reducing the regulations for these businesses will open up the market and increase choices for consumers looking to save costs when buying or selling a property.”
At first glance, it does seem that there are clear benefits for both buyer and seller but will the proposed changes really give a boost to the housing market once they are put into place?