We predict that ‘Moving Contracts’ are set to replace old estate agents’ ‘Selling Contracts’
Updated: 3rd June 13
To add flesh to the bones of this new proposal, if brought into effect, it would obviously favour multiple branch firms in preference to single office independents, so significant opposition from the latter must naturally be expected (unless of course they were to join a consortium of other independents that shared out all the fees for work achieved - which could amount to working like a multiple in effect).
As far as fee collection is concerned, the firm most likely to secure the fee on completion would be the firm that finds the house being bought (instead of the firm selling the house being sold), as at present.
This would be a total reversal of the present system, something which we would suggest is, very much, worth contemplating.
Please read on the the rest of the article to get the picture.
Estate agents’ selling contracts should become ‘moving contracts’ which should pay them a fee when they arrange a successful combined move, not just a sale.
For this to work, instead of vendors signing selling contracts with solely appointed estate agents (as happens at present), they would instead appoint several estate agents and sign deals with each of them - both to find suitable new houses as well as finding buyers for their existing houses.
This way, the seller would not be beholden to any specific agent until they had both found a buyer AND helped them to negotiate and secure the house they wanted to buy.
Several teams of agents could legitimately work for each moving client at the same time, on a fair and level playing field basis, but only the agency that both secured the most competitive deal on the house being bought AND the best terms of sale on the one to be sold, would get rewarded with a fee from the client on completion.
This would be rather similar to a house-owner getting two or three competitive quotes for a replacement roof, the roofer being hired being paid after successfully completing the work.
Instead of a roofing contractor though, it would be the estate agents who proved to be the best at both doing the search and also the most successful negotiations on both properties who get paid for obtaining the best deal for the house-owner’s next sale and purchase combination. Any disputes about fees could be dealt with by the courts, as now.
Agents could develop wide-ranging networks able to help each other to achieve this new service, instead of each trying to out-exaggerate the others by over-valuing to win instructions from the same client; as now.
An alternative way to explain this would be for agents to still try to out-compete their rivals, but instead of competing to win the most instructions, they would be in business by being the best at finding BOTH a buyer for the existing house and negotiating the most acceptable terms on the house to be moved to.
One advantage under this new idea would be that if a client continued to experience difficulty in selling as part of the process of finding a suitable house to move to, they would not have to change estate agents, as they might have to do at present, they would simply instruct more agents to join in the search both for buyers and crucially, for suitable houses to move to.
This method would replace the existing archaic method of appointing a ‘sole agent’ to sell each property.
It would finally bring estate agency into the 21st Century by empowering them to offer a fuller service.
Posted by: Property Match (UK)/Asking_Prices: Peter Hendry, Consultant in Housing Valuation, Property Match (UK).