Call For Agents To 'have To Buy Properties' They Cannot Sell

[Pent Up]

A very sensible idea if you ask me and from

An estate agent too. Unfortunatly property match seems to be alone on this one.

http://www.estateagenttoday.co.uk/News/Story/?storyid=3619&title=Call_for_agents_to_%27have_to_buy_properties%27_they_cannot_sell&type=news_features

Friday 15th October 2010

The Estate Agents Act should be amended, so that estate agents have a legal responsibility to sell a property at, or close to, their initial valuation.

If they fail to do so within an agreed timescale – say, three months – the seller would be able to require the agent to buy the property.

The proposals have come from an RICS member with more than 30 years of experience in the housing market.

Peter Hendry, of Property Match, in Mapperley, Nottingham, has written to the president of the RICS suggesting an approach to the Government.

He wants agents to stop over-valuing houses.

He said that the housing market needs to function more successfully, and to keep “functioning this way through several consecutive economic cycles”.


He says that if agents were confident in the accuracy of their valuation advice, they should be prepared to buy properties on the assumption that they could be sold-on within a reasonable timescale.

He said: “In this situation there should be an even chance that the agent will make a profit on half of the properties s/he is required to buy in this way, and so this new provision would not, in itself, penalise a genuine agent.”

He went on: “The great benefit of enacting such legislation would be that the housing market would be unblocked. People would, at last, be able to move more frequently and more confidently.

“An added benefit would be that the property market would remain open for business throughout changing economic cycles.”

Hendry said: “Even when the main economy is going into a downturn, the housing market could be insulated from the effects by using this method of pricing.

“Similarly in an upturn, the housing market could be insulated from over-exuberant pricing by these methods, which would self-regulate the prices estate agents chalk up.”

He said that good agents would not find the proposed new responsibility too onerous. He thought that they would be able to buy a property outright, from commission, after about 50 sales.

However, he said it would be a burden on firms which over-price properties.

Hendry said he had recently seen a property for sale through an estate agent. It was in very poor condition and yet its asking price was higher than that for which any comparable property in the area had sold.

A second property in the same road, on with another agent, had gone up 62% since being sold seven years previously – a rise of 9% per year. Yet the only material change was that this property had lost part of its garden. It emerged that the property had been on the market for a year.


Hendry said: “These two recent experiences underline the problems facing buyers, as a result of the methods used by estate agents to market houses, even in what are undeniably, extremely tough market conditions.


“No wonder agents are generally regarded with scant respect. The way they market houses needs substantial improvement.”

Hendry also proposes that vendors should have to commission an open-market valuation of their property at the same time as getting an EPC produced. He suggests a Domestic Energy Assessor could be trained to do this, using Land Registry information.

He said: “The need for the Government to intervene in the workings of the housing market is obvious.”

[Harry Monk]

A much simpler solution would be to ban estate agents altogether and make it law that all property can only be traded on eBay without reserve. An auction is the best way of determining the true market value of anything.

[Laughing Gnome]

A very sensible idea if you ask me and from

An estate agent too. Unfortunatly property match seems to be alone on this one.

http://www.estateagenttoday.co.uk/News/Story/?storyid=3619&title=Call_for_agents_to_%27have_to_buy_properties%27_they_cannot_sell&type=news_features

Interesting idea.

I have often wondered that estate agents don't hold a home or two and a storage facility to facilitate chains. They could step in when a chain broke down and utilise the home as a temporary rental where a sale succeeded and a purchase fell through.

That would be a genuine service, and involve the agents in putting their money where their mouth is.

[exiges]

A very sensible idea if you ask me and from

No, it's not a sensible idea.

You'll get agents putting in really stupid low valuations to cover their backs, rather than achieving the best price.

I'm all for an HPC and sensible pricing, but this would go the other way.

Some houses are oddball type properties, expensive stuff where only a very small percentage of people would be interested, and it's a case of waiting for the right buyer to come along. To penalise an agent because that person hasn't come along is just wrong.

In a normal environment trying get a house to sell isn't usually a problem. This proposal is just trying to tackle the current problem (nobody buying) the wrong way. We just need sellers to get with the program.

If they're penalised for not selling a house, then they will also argue that they should keep the money they manage to achieve over that price too.

Edited October 19, 2010 by exiges

[leicestersq]

It is a daft idea.

If you dont believe me, try it. Set up your own estate agency based on those principles, raise some capital from the Dragon's Den or your mates, and see what happens.

You will end up having to put in super low bids, and the sellers wont want to sell at that price. They will keep going to estate agents who may give them an optimistic price or maybe a realistic price, not the suidicidally pessimistic price you are forced to offer.

Things are like they are for a good reason.

Most of the time at least.

[The Knimbies who say No]

What a load of nonsense.

Talk about treating the symptoms, the problem ultimately lies with sellers being stupid and not being bright enough to twig that the 21-year old spiv delivering the valuation knows jack! Hence why they feel 'unlucky' that their house sits for 18 months without selling. It is just a basic, fundamental misunderstanding of buying and selling. I ain't defending ramping agents, but it seems to me that a little investigation of a valuation by the seller is not an unreasonable expectation given the sums of money involved and the ease with which this information can be obtained these days via houseprices.co.uk zoopla etc etc

Just another example of it being someone's 'fault' if something doesn't meet expectations. Ramping agents exist because the people they are talking to are thick.

[Pent Up]

It is a daft idea.

If you dont believe me, try it. Set up your own estate agency based on those principles, raise some capital from the Dragon's Den or your mates, and see what happens.

You will end up having to put in super low bids, and the sellers wont want to sell at that price. They will keep going to estate agents who may give them an optimistic price or maybe a realistic price, not the suidicidally pessimistic price you are forced to offer.

Things are like they are for a good reason.

Most of the time at least.

Don't agree.

If all agents had to work to the same rules a vendor cannot go around all the agents until they get a stupidly high valuation like they do now. They will al be realistic sensible valuations that should achieve a sale within the three months.

Also. If all all agents are undervaluing what's the problem? If the demand is there they will get above AP offers/ sealed bids and the properties would get bid up to current Market values.

Edited October 19, 2010 by Pent Up

[pablopatito]

“The need for the Government to intervene in the workings of the housing market is obvious.”

Rubbish. The market is working fine. There are plenty of estate agents (so good competition), plenty of buyers and plenty of sellers. It works fine.

If a seller has three different agents value their house and chooses to go with the highest valuation, and it doesn't sell in 3 months, unless the seller is an idiot, he knows what the problem is. Its his choice. He sets the price at the end of the day.

Under his proposal I suspect you would end up with fewer, bigger estate agents less competition, bigger commissions, and a generally more imperfect market.

[Kyoto]

The market has given us people who will do this with housing, though at the cost of a huge spread between what they buy and sell at. If this was a profitable exercise, more private companies would have entered that market and closed that gap.

Houses are just too illiquid for this to work.

[tomandlu]

Don't agree.

If all agents had to work to the same rules a vendor cannot go around all the agents until they get a stupidly high valuation like they do now. They will al be realistic sensible valuations that should achieve a sale within the three months.

Exactly - however, I suspect that gazumping would become epidemic due to low valuations... and, thinking about it, there might be a permanent downward pressure on house-prices at the same time. It would lead to an incredibly schizophrenic market.

[blankster]

The idea of being able to buy a vacant possession, freehold and chain-free house from a "house dealer" does sound sensible. they'd have to put a mark-up on the seller's price, of course, but that would be in place of commission.

[SarahBell]

i think it'd be fun if they had to give people written valuations with "your valuation: selling price ratio may vary."

[bomberbrown]

Seems like it's just dawned on a certain Peter Hendry that its the volume of sales going through that matters to EA's rather than unrealistic valuations in price.

Give that man a carrot.

[we the sheeple]

A much simpler solution would be to ban estate agents altogether and make it law that all property can only be traded on eBay without reserve. An auction is the best way of determining the true market value of anything.

no fees if you list at 99p

[davidcameron]

The idea of being able to buy a vacant possession, freehold and chain-free house from a "house dealer" does sound sensible. they'd have to put a mark-up on the seller's price, of course, but that would be in place of commission.

Gosh, that sound's a bit like a "bank" doing wicked things like "trading" and maybe making a "profit". We can't have that can we because we all hate them.

[Dave Spart]

Gosh, that sound's a bit like a "bank" doing wicked things like "trading" and maybe making a "profit". We can't have that can we because we all hate them.

Yep, I mean who else could deal us our fix of mortgageamphetamine?

[red]

“The need for the Government to intervene in the workings of the housing market is obvious.”

Rubbish. The market is working fine. There are plenty of estate agents (so good competition), plenty of buyers and plenty of sellers. It works fine.

If a seller has three different agents value their house and chooses to go with the highest valuation, and it doesn't sell in 3 months, unless the seller is an idiot, he knows what the problem is. Its his choice. He sets the price at the end of the day.

Under his proposal I suspect you would end up with fewer, bigger estate agents less competition, bigger commissions, and a generally more imperfect market.

Exactly.

It's the seller that ultimately sets the price, regardless of how much smoke the EAs blow up their @rses with high valuations to gain instructions.

If there was an EA 'regulation' to give 'sensible' valuations that didn't meet the seller's expectations, they'd just market the property privately for whatever they thought it was worth.

[erranta]

Exactly.

It's the seller that ultimately sets the price, regardless of how much smoke the EAs blow up their @rses with high valuations to gain instructions.

If there was an EA 'regulation' to give 'sensible' valuations that didn't meet the seller's expectations, they'd just market the property privately for whatever they thought it was worth.

This thread has been seriously nagging me

The hidden trip-up which tightens the noose around our throats is that behind the scenes/smokescreen the financials/banksters own the huge chains of EA's.

Now if you've ever touched a bank loan/credit card/a.n.other the only way is up the profit for the financials thru hidden fees, redemptions and any other trick they can scam the public with.

They will then be in complete charge of the housing market - widening the gap between what they buy at and what they will sell us at.

They will tie you to their shitty, overcharging mortgage products to sell you the house in the ea's window!

(just like they were testing this out with inhouse financial advisors within their wholly owned ea's who started refusing to show houses to people not signed up with the bankster frontman, financial advisor)

Deposits will go thru the roof (they already are to get the next generation used to the 'norm') so they have virtually no risk of exposure to loss.

(Just like insurance fix their terms and premiums)

By the way has anyone ever looked to see if house mortgage/life insurance premiums are dropping over the decades - coz their own industry says we are all healthier and living longer than ever before.

Therefore life insurance premiums should have dropped by Billions £££'s - if not, it's another City scandal ripping off the population (Panorama staff )

Edited October 19, 2010 by erranta