RIP Sole Agency Shackles
Isn't it time sole agency contracts, which tie people into long contracts without any real consumer benefits, are outlawed?
October 6, 2014
Since the days when the industry was seen as a profession of integrity (a while back), estate agents have utilized sole agency agreements as part of their terms and conditions of business. They are the norm these days and we estimate that around 80% of all property listings are subject to an ‘exclusive’ tie-in.
Back in the day, when my grandfather Albert Quirk first started in the property business in the 1950’s, sole agency was a means of providing a genuine fee discount in exchange for the right as the agent to market a home without competition for a short period of time.
But as the estate agency business has become more competitive, indeed ruthless, exclusive tie-ins have become something else…. a weapon to manipulate and profit from the consumer.
I can think of few if any trades whereby you select a company to work for you and are bound to them for two, three, four or more months regardless of their service, performance or behaviour.
The way that your local estate agent works goes something like this:
- You enquire as to their fees.
- They insist on visiting you rather than discussing costs over the phone.
- Once face to face, they’ll provide you the valuation ‘that you want to hear’ and will then set about signing you up.
- The contract will tie you to them unconditionally for, typically, 8 to 16 weeks. This means that you are prohibited from moving to another company, no matter how dissatisfied you are, within that period.
Can you imagine sitting down to dinner and being dealt with by a rude waiter who serves you horrible food but not being allowed to leave? Being forced to eat the slop in front of you because you literally have no other option? Well, in the world of property selling that is exactly what happens.
The new Consumer Protection from Unfair Trading Regulations 2008 state that trading practices should not be aggressive or unfair or materially distort the actions of a consumer to transact in such a way that they would not otherwise have done.
My view is that to rope a consumer into being compelled to stick with a bad agent, no matter what, is unfair and indeed aggressive. And if such an approach stops you from changing estate agents of your own free will because of poor performance, thereby risking you chance of selling or indeed buying an alternative property, then that’s certainly causing you to have to act in a way other than you would want to.
Morally, sole agency contracts are wrong. They are restrictive and onerous. The question is, are they now unlawful too? I think they may be and good job too. If so, it would loosen the shackles on the consumer and allow them choice and power based on service. Surely that’s right on every level….
Blog provided by Russell Quirk at eMoov.co.uk
- Previous blog posts
- Why the mystery: an investigation into the murky world of estate agents contracts
- How many estate agents should I use?
- How much should I pay the estate agent?
- Estate Agents’ contracts – what to watch for
- Estate Agent’s tricks
- How do I lower my estate agent fees? What about online agents
- How to resolve disputes with estate agents: A guide for sellers
- How do I break the housing chain?
- Conveyancing process explained: For Sellers