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A Body Blow for Estate Agents

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The role of a traditional estate agent could now be under threat following proposals to lift restrictions on private web-based sellers.  The Department for Business Innovations and Skills has proposed amendments to the Estate Agents Act, so that web-based ‘intermediaries’ – which allow sellers to advertise their home online direct to the public – will no longer be treated in the same way as estate agents.

This could be particularly good news for the likes of Tepilo – run by TV’s property guru, Sarah Beeney, which offers a free advertising service for anyone wishing to sell their home privately.  Other sites market properties for a fixed fee – well below estate agent fees, which typically account for around 2% of a property’s sale price.  If the proposals are implemented, websites like this will no longer be classed as estate agents and will not have to carry out the same expensive checks on property listings that estate agents are obliged to.

Jo Swinson, the consumer affairs minister said: “These intermediaries help buyers and sellers contact each other at a low cost, but don’t engage in other estate agent activities, so it’s unfair to expect them to go out and check all the property details of all the sellers on their websites.  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.”

Sarah Beeney, who has been involved in the BIS consultation, said that good estate agents would “have nothing to fear” from the changes, as they would be able to easily justify their fee with added value.  She also pointed out that the UK should look to the way things are done in the States, where between 20 and 30% of property sales are made without agents.

On the flip side, estate agents have warned that sellers will be misled into thinking that a ‘passive’ intermediary will provide a full estate agent service.  In fact, the global residential director at RICS (The Royal Institution for Chartered Surveyors), Peter Bolton King, said that home buyers and sellers alike would be placed at “significant risk” when they were left responsible for undertaking their own detailed sales negotiations without the “guidance of a property professional.”

Sources: thisismoney.co.uk, rics.org (image courtesy of introducertoday.co.uk)