It’s that time of year when our thoughts turn towards summer holidays with travel to warmer climates, freedom and a break from damp mornings, train malfunctions and buyers changing their minds because, well, just because.
Of course, all the excited anticipation of the holiday is somewhat tempered by the pilot’s announcement on first boarding the plane that “in the event of an emergency, you’ll need to adopt the brace position”.
Which is timely advice for agents right now with the latest Sunday announcement from the Housing Secretary Sajid Javit, https://www.gov.uk/government/news/government-to-professionalise-the-estate-agent-market who seems intent of ruining any agent’s carefree holiday plans. Following the established government line of announcing housing changes on a Sunday so a minister can appear on the Andrew Marr show and upset people’s weekends, their intentions are clear.
Given that the first two items in the press release insist that agents “must be transparent about fees they receive from solicitors” and “hold a professional qualification” it is obvious who is the focus of their attention with this news.
We’ve always been very open about transparency and whilst we agree that reasonable fees are part of any recommended sales referral system based on merit, we think the government might have a point here. The motivation for using referral fees and their proportion of the overall cost seems to have got out of hand. When we talk to agents who apologetically tell us that “we must recommend the SweetAndLovelyLegalMovingServices panel, although our clients complain about poor service, we can’t get hold of anyone and we waste hours chasing them, my management team insists we use them for the referral fee” something is definitely amiss.
That “something” is bribery, as defined under the Bribery Act 2010.
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We’re waiting for the wording to be defined, as it’s not clear what “transparency about fees” actually means in a practical sense. However, the government has signalled its intent that it happens, by confirming they will be “strengthening the National Trading Standards Estate Agency team (who knew such a specifically-targeted elite task force even existed) to carry out more enforcement activity including the banning of estate agents who do not comply.
It does sound like bad news for those agents who have taken the advice to “drink the KoolAid” and maximise revenues by using panel managers to increase their revenue. We’ve experienced opinions on both sides on this issue. An owner of a five office agency simply did not believe the choice of lawyer can impact the speed of a chain transaction and was happy to take the panel manager’s bribe. However, another turned down the offer of “easy money of £400” (to quote the salesman) because his experience of the panelled lawyer was so poor he knew it would stop his deals going through.
To add insult to injury, not only have the government insisted that agents declare referral fees, but in future, they will have to suffer the indignity of having to go through the rigmarole of getting a “professional qualification”. Whatever that is.
We’d love to say that this is a great idea, especially as most agents we talk to understand the importance of professionalism, but we are a little sceptical about what this means in reality.
Let’s think for a moment about those people that we deal with on a daily basis that have “professional qualifications”. Mr Javid gave us a clue in his latest press release.
Yes – solicitors.
If the government believes by insisting that agents becoming qualified will solve the problems of the property industry, then maybe they should get some feedback from them on their experiences of working with “professionally qualified” individuals.
Far be it from us to judge, but in our personal experience and we are sure most agents would agree, the most common feedback we receive about solicitors is they can be “arrogant, rude and inefficient”. It’s not often we hear the word “professional” bandied about.
Which does beg the question about whether introducing qualification for agents will have any impact on the professionalism and service levels they provide.
Most people in the industry we speak with, want to improve the house buying and selling process. We do believe that shining a light on the more corrupt aspects of the business which does impact service levels will really help, and the government should be commended for listening to the industry feedback they received in their consultation.
However, with the government putting estate agents fairly and squarely within their sites, let’s hope it won’t be necessary to use those yellow air supply masks that drop down from the roof in times of emergency.