Estate Agents:
high fees, poor service - and that's official
We’ve moaned about them for years but at long last we have official
confirmation of just how bad they are
An Office of Fair Trading report published this week has slammed estate agents
in England and Wales. It found that one in four people (26%) who sold their
homes recently were dissatisfied with the level of service they received.
Typical complaints from sellers were:
Estate agents offer poor value for money (38% of those surveyed said this
was a problem)
Poor communication by the agent (19% were dissatisfied in this area)
Delays in the sale (about 14% blamed their agents for sales taking longer
than expected)
An even larger proportion of buyers (28%) said they were unhappy with estate
agents. Their gripes included:
Poor communication from the agent was poor (24%)
About 6% thought the agent was responsible for a prolonged transaction process
Although fewer than one per cent of buyers thought that they had lost a house
because their offer was not passed on, this is a particularly serious issue
as it represents a potential breach of the law.
The OFT also identified some serious complaints such as failure by agents
to pass on offers or declare a personal interest, and suggestions that buyers
would be more successful if they used financial services offered by the agent.
How you should fight back
The report found that agents earned an estimated £2.5 billion from the
sale of residential property in England and Wales in 2002. But it also claimed
that price competition between agents is limited. “At present, there
is widespread use of fixed 'pricing points', with the majority of fees being
set at quarter-point increments from 1% to 2%,” said the report
Consumers, the report suggests, should shop around more before deciding which
estate agent to use. At present only about half of all sellers bother to
obtain a quote from more than one agent. Those who did shop around and negotiate
fees paid on average 14% lower fees than others. For a property of average
value, this represents a saving of about £300.
The OFT said it will launch a consumer information campaign to raise awareness
of the savings that can be made by comparing prices between estate agents
and negotiating on fees. John Vickers, OFT chairman, said: "There is widespread
public dissatisfaction about the market for estate agency services. Necessary
change includes sharper price competition, more effective regulation and
higher industry standards."
Estate agents will have to clean up their act or face the possibility of
having to adhere to a compulsory code of conduct. About time: let's face
it, how would you feel about shelling out more than £1,000 for a service
where you have a one-in-four chance of being dissatisfied?
The government has 90 days to respond to the report.
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