Should estate agents relinquish their super injunctions – a view
Should estate agents relinquish their super injunctions? Is an article written by respected property journalist Graham Norwood. My take on the crux of Graham’s article is that the way property is sold is too secretive and that more information should be out in the open.
Since its publication a couple of days ago, a number of estate agents and property people, myself included, have commented on his views on Twitter. Most notable of these commentators is property guru and TV talking head, Ed Mead of Douglas and Gordon in London.
Although Twitter offers some fantastic benefits, its strict 140 character limit makes a fully balanced and informed debate rather tricky. Consequently Ed and now, I have responded to Graham’s original post by posting ourselves.
Here are Graham’s three crucial ideas with my expanded (from my original Twitter response) view below:
1. Why should the contents of a structural or lesser survey of a home, not be shared between all prospective buyers, instead of each purchaser having to arrange and fund their own? (After all, an MoT applies to a car beyond three years old, so anyone buying it second hand will have to be aware of it – but will not have to arrange their own).
2. Why not have formal feedback after each viewing, so the potential buyer undertaking the next viewing can see it? (Ridiculous, you say? Well there are public reviews of the quality of almost every other commodity these days – why not homes?)
3. Why not record an offer on a house for sale and let that offer be known, formally, to other prospective buyers? That way, rival bids may develop. These may increase the eventual sale price and income for the seller (and indeed for the estate agent), while removing the lingering belief that many would-be purchasers have that interest in the property is actually just being talked up?
1a) I am all in favour of a survey being carried out prior to a property being put up for sale and that this is made available to any serious potential buyer. In fact, my own company, PDQ, used just such a system some years ago. The ability for a buyer to be able to make an offer based on as much information as possible helps reduce the number of nasty surprises and emotional re-negotiations half way through a sale. From the sellers point of view, a pre-sale survey, also helps to highlight any unknown problems, allowing works to be carried out and a better price achieved. Additionally, knowing anything that may require work with a property in advance, allows a seller to obtain genuine quotations for the work from reputable trades people, giving them and their agent a stronger hand in any negotiations and, of setting and achieving a genuinely saleable asking price. Ed Mead makes some valid points about who owns the survey but, these were overcome by having the survey independently commissioned. A similar service is now operated in Scotlandby OneSurvey.org whom, I had great pleasure in working with and whose expertise I rate highly.
2a) Whilst such an idea may have its merits, I am not convinced that many homeowners are ready for the bare facts quite yet. House buying and selling is a very highly charged, emotional time for most people triggered, in the majority of cases by other life changing events (new baby, job move, divorce, death or illness in the family etc). It is bad enough that a viewer doesn’t like your home enough to want to buy it and to be told in as diplomatic as possible terms(occasionally kind half truths) quite WHY they didn’t want to buy it but; to have a buyers ‘warts and all’ views published on the internet for all to see…? Think of your most stressy/ house proud friend or relative. Imagine them selling. Now imagine someone publishing how much they hated their taste in decoration/ garden design etc having been to see their pride and joy. I rest my case.
3a) Before I respond to this idea, I think it worth pointing out something that a large minority of people (including some agents and some very senior government ministers and civil servants in the last government that I met) are unaware of. Estate agents work for the seller. It is our legal duty to work on behalf of the seller to obtain the best price. It is not our job to give away the sellers lowest price they would take or to work for the buyers to ‘beat the owner down’. By the same token, agents are not allowed to invent offers or misrepresent interest (that, sadly, however, does not prevent many from doing so!). By making the amount of an offer known, an agent/ seller is immediately giving away a chance to negotiate the best price. Not only does it hamstring a negotiating position, an open offer also encourages silly and petty offer wars that increase an already tense and emotionally charged time for buyer and seller. By keeping all offers private (which is what we advise our owners to do at my company), the prospective buyers are treated equally and a ‘best and final offer’ may well, and often does, turn up a far better price for the owner than was expected or, could reasonably have been expected in an open bidding war. There is also an argument that disclosing the level of an offer has data protection implications*.
Sadly the way in which property is bought and sold in the UK is dreadfully outdated and in need of a major overhaul. I include Scotland in this as I do not believe that the Scottish system offers a fairer or better system, just a different, equally flawed one. And whilst estate agents are, believe it or not, one of the most heavily regulated sectors in sales, there is no will or ability to enforce the Laws which are flouted or ignored on a daily basis by agents who know they will get away with it or, have no knowledge of the Laws and rules in the first place. There is still no bar to entry, no minimum standards. Believe it or not, you need more qualifications and licensing to work as a nightclub security officer (what I always knew as a ‘bouncer’) or to sell burgers from a van than you do to value and sell someone’s property.
So what do you think? Join the debate 😉
*When I spoke to the Information Commissioners office about this point in the past, they were unable to give me a definitive answer as to whether releasing the level of an offer by a buyer to a third party (i.e.another buyer) breached the Act.