The report released by the Office of Fair Trading (OFT) has not only suggested a shake-up in how homes are sold is needed, but also has intimated that internet property sales benefit consumers…
The report found that the housing market remains dominated by traditional estate agents with weak competition between them on price. As property prices rise during housing booms, so too do estate agents’ fees. Overall satisfaction with estate agents, however, has improved in recent years, according to research conducted as part of the study. Where there are problems with transactions, consumers generally do not think the estate agent was at fault. The OFT believes that innovation in this sector, in particular through online services, could have a dramatic impact on the cost of buying and selling a home.
An internet estate agency company, The Little House Company, has said that the report supports internet property sales and helps consumers understand the cost-efficiency of cutting estate agents out of the equation. Nick Marr, Director at The Little House Company said, “Fat cat estate agents that have been living off outrageous commissions need to realise that consumers have become internet savvy and that they see online buying and selling as a natural progression in the UK property market. “We are not anti-estate agent – the majority of estate agents do a great job and the report acknowledges this, however their service comes at a price people no longer wish to pay.
Consumers are moving away from the High Street to doing most things online including buying and selling property. “All want to save money by undertaking the marketing aspects of a sale themselves. We recommend that once a buyer is found that the legal process is handed over to a conveyancer or solicitor. “It is those at the higher end of the housing market with most to gain from a private sale, estate agents commission is based on house prices and does not bear resemblance to the work that they put in.” “Many estate agents feel that property valuation is their trump card, however it has become very easy to value your own home.
Websites such as Zoopla or mouseprice.com can provide home owners with sold house price data while other online property sites are great to compare like for like. Many people don’t appreciate that estate agents only express an opinion when they value a property,” he added. John Fingleton, Chief Executive of the OFT, said, “Encouraging new business models, online estate agents and private seller platforms could put useful competitive pressure on traditional models and lead to better value for buyers and sellers. “The government can help this process by updating legislation and making sure regulation only applies where it is essential to protect consumers,” added Mr Fingleton. The OFT is also encouraging more consumers to negotiate on commissions paid to estate agents.
Whilst almost a third (32 per cent) of those who had used a traditional estate agent believed that the fees they had paid to their estate agent represented slightly or very poor value for money, 64 per cent of sellers in the OFT’s survey in England and Wales did not negotiate a lower fee. Failing to shop around and negotiate on estate agents’ fees could be costing these house sellers up to £570 million a year, according to OFT analysis. The OFT’s advice service, Consumer Direct has created key tips for consumers which can be found at http://www.consumerdirect.gov.uk/hometips