In 2010, an Office of Fair Trading (OFT) consumer survey found that the housing market is dominated by traditional local agents. No surprises there – but they were also of the opinion that there is little competition with agents charges.
Further, the OFT were forthright in encouraging consumers to negotiate on agents fees – but they found that in practice most don’t.
At that time, John Fingleton, OFT Chief Executive, said: “In the present economic climate it is more important than ever that people get a good deal when buying or selling a home.
“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”.
One of the direct to consumer property sites I came across recently stated, and I quote “Rightmove is the main advertising point for selling houses. Rightmove sells your house, not a high street shop window, not the advertising in the local papers and not the estate agents reputation ! “.
I found that a bit “sharp” to be honest. Whilst I agree with the implied marketing power of Rightmove, I would robustly challenge the notion that a computer screen sells a property.
Rightmove is an internet based shop window that attracts potential buyers – but the negotiations to conclude a property sale are carried out by real people – not computers !
Having said that, I’ve come across many agents in my time – some good and very well run – others that couldn’t run a bath.
Once a sale is agreed, the champion agent doesn’t put his or her feet up and wait for solicitors to whirr into action – they regularly get on the blower and make sure the sales conveyor belt keeps moving along.
The challenge for the direct to consumer merchants, is the same as the contents of my crusty old kettle – scale. In other words, whilst there will always be some demand from penny pinching “cheapest is best” clients – it’s an uphill battle for traditional agents competition (as proposed by the OFT) to break through into the mainstream.
In the past 30+ years of buying and selling properties, I’ve steadily accumulated a wealth of experience of the inner workings of the property market. That said, I’ve always treated the agents I’ve had dealings with as equal partners.
Reason being, we both want the same thing – a sold property. Not an agreed sale, not a SSTC (sold subject to contract) – not even an “under offer”. No, what I mean is a sale that actually concludes with money changing hands swiftly followed by the handing over of keys.
Traditional agents are here to stay, although I do wonder how long the practice of charging a commission on the sale (as opposed to a fixed fee) will remain. But that lively debate is best left for another day.