High street agents are said to be under investigation by the Competition and Markets Authority for their implementation of sole agency agreements.
The claim has come from Russell Quirk, founder of online agent eMoov, who made a complaint earlier this year – with, he says, the advice of Counsel.
But while eMoov said it has received confirmation of an investigation, a CMA spokesperson told Eye this morning that it had only received a complaint.
Quirk told Eye he was looking forward to today’s posts on Eye: “I’m actually looking forward to seeing how the establishment attempt to justify and defend the archaic shackles of lengthy sole agreements.”
Quirk says that “excessive” sole agency agreements penalise sellers and that lengthy periods of exclusivity are likely to breach the Consumer Protection from Unfair Trade Regulations 2008 and the Unfair Terms in Consumer Contracts Regulation 1999.
Former high street agent Quirk said: “Sole agency agreements lock consumers in to a period of exclusivity, usually extending to as long as 20 weeks, but often continuing indefinitely until written notice to cancel is provided by the seller.
“Throughout this time, they are contractually prevented from instructing another agent to list their property regardless of the agent’s performance. If they do breach the often very tough contract terms, consumers are then liable for penalty fees which can be up to 3% of the eventual sale price.
“The nature of these agreements, coupled with a number of additional small print clauses designed to further increase the agent’s monetary gain, are putting UK sellers at a severe disadvantage.”
Quirk added: “These excessive periods of exclusivity, especially when taken together with the other restrictive clauses, are quite plainly not in line with consumer interests.
“As with many aspects of the high street sector, it’s a Jurassic and outdated practice. Imagine going out for a meal, only to find the food and service are diabolical, but being told that actually you can’t leave and you even have to have pudding.
“Once you’ve choked the meal down, you’re then landed with a substantial bill, including an extortionate service charge, with no choice but to pay it.
“The mind boggles as to how in a country where the laws on marriage, hunting, workplace conduct, consumer rights and so much more, are constantly being updated to align themselves with the society we live in, something as backwards and regressive as a sole agency agreement still remains.
“Just because it exists now, it doesn’t mean things can’t change. In years to come, property sellers will look back at sole agency agreements and think why would anyone have stood for that?”
The complaint lodged with the CMA is specifically to do with excessive sole agency and selling right agreements, deployed by agents predominantly in the high street sector.
It is understood that an earlier complaint to the CMA by Quirk, on the subject of OnTheMarket’s ‘one other portal’ rule, will not be pursued.
Comments (33)
It’s interesting looking back at these comments that Russell said in the article;
“I’m actually looking forward to seeing how the establishment attempt to justify and defend the archaic shackles of lengthy sole agreements.”
The fact is that most actually agree that 20 week sole agency agreements are unfair, most agree a capping at 4-6 weeks and many (including our chain of offices) have 2 weeks notice anytime from sign up. It just goes to show how truly out of touch with the high street agents Russell Quirk really is. He thinks we all charge min 2% with 20 weeks sole agency. It seems that he has lined this latest attack up but will be disappointed to find out that not 1 of the comments here has tried to defend 20 week sole agencies. It makes me even more convinced, in my opinion, that Russell has an axe to grind with high street agents because he was unable to continue with his high street business during the crash and therefore, out of jelousy, spends most of his time thinking up ways to damage the traditional model instead of concentrating on pushing his online one.
“…if he thinks the length of sole agencies is on that list he’s as daft as we all think he is…”
REALLY? Gaw blimey, Jonnie – I honestly didn’t think ANYONE could actually be that daft… not even The Quirkster, surely.
Faisal Butts bitch boy, getting all shouty again, short on facts an substance and desperate to be loved by the consumer while still not including VAT on his own prices.
While snapping away like a recently castrated, delinquent Jack Russell at an industry that is indifferent about him to the point that 3 off us poking fun at him on here is all the attention he gets………..and all the time his market share is stagnant at best, the budget boys are about to turn on each other like rats in a sack and the ones with the most money (lifted from poor gullible souls) will roger the life out of him. Russell has problems, if he thinks the length of sole agencies is on that list he’s as daft as we all think he is – Jonnie
Well, Mr Quirk! You said you were looking forward to seeing the posts on Eye today, what do you think of them so far? Has the “establishment” made some fair points in their favour?
If an agents advice, pre and post instruction, and service is good enough then the sole agency issue shouldn’t come into question. The problem lies with some agents over-valuing to win the instruction and then forcing the price down during the tie-in period. Sole agency periods should be capped at 6 weeks which should give plenty of time for the agent to prove the accuracy of their advice and quality of their service.
We have always worked with no minimum contract. If a vendor is not happy with your service, what is the point of tying them down? They can always just say ‘I don’t want you showing anyone else until the period ends’. It’s almost embarrassing how some agents hold on to them. It’s reminds me of kids walking of the football pitch and taking their ball because they are not playing very well.
Awww bless, Mr Twuirk can’t get his £500 upfront because they are already in a sole agency agreement so now he needs to throw his toys out of the pram about it.
Your’e almost getting a tragic as Zoopla
Since online agents still make up less than 1% of our local market place, what are consumers actually saying about how they feel about the 2 offerings? Quirk is floundering around for his botched business model.
Of course, Mr Quirk doesn’t need ANY period whatsoever to be given a fair opportunity to recover his outlay – because he pockets it up-front, before his Locally Appointed Measuring Minion even crosses the thresh or points and presses to produce the first badly framed, out-of-focus picture. What he is clearly wazzed about is that the vast majority of properties actually sell WITHIN an Agent’s Contract term – so he hasn’t got even a sniff of second bite (being blunt, they passed up the opportunity of tossing their cash straight into his bank account first time around…) at the low-hanging fruit.
Poor chap – he simply cannot get his head around the fact that WE ALL have a tiny percentage of the market – even the big corporates accept that they can’t have everything, Mr Quirk.
Time to hang the dummy on the Christmas tree for Santa to take to someone who needs it more than you, Mr Quirk – it is spending way more time spat out on the floor these days than fulfilling its intended role of plugging your ******** evacuation orifice…
Good point PeeBee. If model takes upfront then gone is the cooling off and money in the bank. Maybe CMA should insist on refunds from budgets if they fail to sell.
Maybe agents should reimburse vendors the difference between the original asking price and actual sold price as well?
WOW – what a cracking idea. Let’s start tomorrow, with all new instructions.
And when the Agents, in fear of actually offering best advice to their clients all start putting Forced Sale Valuations (ask an adult to explain that term to you…) less a further ten percent for good measure on every property – or we all start asking for “Offers in excess of a quid”, maybe then vendors should be made to hand over the difference between asking price and actual sold price to the Agent as well?
And there was me thinking you were a complete and utter numpty…
The 2 week cooling off period can be waived if clients want immediate marketing, as told to me by head of NTSEAT (Trading Standards).
We should be disclosing our contract term and our fee up front. If a client signs in their home they have a cooling off period, if they come to our offices to sign, they must have considered the advice and terms already given. This is nothing more than self serving publicity from a wannabe Robin Hood. I think its time that Russell emooooves himself out to pasture.
Long contracts are lawful si long as agents provide consumers what was promised. If they don’t (such as specialist services) then contracts can be broken and Trading Standards Im sure would support consumers.
But equally. How long is Russells mobile phone contract. No doubt 18/24 months. So 10-12-15-20 weeks seem fair so long as the agents service is fair.
He reminds me of a bloke that used to work for me. Whenever we were out on a ‘do’, regardless of the size of the venue or volume of music and conversation, you could always guarantee that you would hear his voice above the din, invariably ranting about nothing in particular.
If he spent more time concentrating on offering the most basic level of service from his own proposition as apposed to trying to pick holes in ‘traditional agency models’ it might make life a little easier for his clients…and agents trying to get chain information…and conveyancers trying to get through…and generally anyone trying to obtain any kind of information from anyone, about anything to do with the property they are handling…(you may guess that, for the second time this year, I have had the pleasure of trying to obtain chain information from eMoov…) All this from a man that’s business model is essentially a pay up front and do nothing after proposition. Whilst we ‘traditional’ agents work hard to evolve and adapt to our business challenges, he seems to operate the classic, ‘stack em high and sell’em cheap’ model. If Zoopla ever end up going direct to market, as they may well do if AM/OTM continue to grow, his firm and others like it are dead in the water.
Phew…glad I got that off my chest!
Clearly he has no need to offer customer service or basic industry courtesies for everyone’s mutual benefit…he’s taken his money up front! Couldn’t agree more with these sentiments.
“If Zoopla ever end up going direct to market …”
They essentially already have, and I can’t believe more agents haven’t picked up on this …
Zoopla investor backs online estate agent eMoov
http://www.telegraph.co.uk/finance/newsbysector/constructionandproperty/11358260/Zoopla-investor-backs-online-estate-agent-eMoov.html
You might want to check the details about data protection in your Zoopla contracts. Anyone that has worked for Connells or LSL will know what I’m talking about here, and what information is visible via Market View (Vizzi Homes).
Did anyone else recently wonder how their vendors were touted by the corporate groups after moving to AM/OTM?
Sole agency agreements are not forced on vendors, they are a choice. Shell out up front (even if you never sell), or don’t and enter a sole agency agreement.
I want to start this reply by saying I agree with the fundamental point made about long sole agency periods. But really Mr Quirk,were you not a real estate agent once? I thought you were. And did you not use this tactic when you were? Forgive me if I maligne you for once being one of us if I’m wrong
But CPR 2008 has been around, yes there is a clue in its title, since 2008! So Mr Q why has it taken you this length of time to stumble on using it as a weapon? Perhaps business levels are diminishing and so a little like Zoopla,the skunk works machine is cranked up. Really can’t you go and win your business based on whatever your offering is, as opposed to by childish, disingenuous attacks on an industry which by and large provides excellent and needed services to the public?
@Typhoon.
CPRs have had several reviews since 2008. CPRs and BPRs are currently undergoing review again. As such anyone with CPR and BPR issues raising concern now woulx be prudent timing.
My guess is that Russell has either fluked raising issue, or done his homework as to timing
@Typhoon. All said I hate budget models and carry the opinion they often charge up front with no promise of results. Plus ‘some’ budget agents can cost sellers thousands by lacking valuation and negotiating skills to achieve best deals.
Oh and please 3% to sell, really that is far from the norm. Think their was a story the other day saying the norm is 0.75 – 1%
Sole agency unfair? I think having to pay up front to sell your property is unfair,
At least if they are in an 8 week agreement and the property has not sold it will not cost them a penny.
I think it’s much more unfair to charge somebody upfront and if their property does not sell they have done their money.
Anyway most agents tend to just do a 2 week notice period round my way. I hardly see that as an issue!
Couldnt agree more.
I disagree. When (much lower) fees are paid in advance, it is usually because the vendor is serious about selling, and you don’t get an agent overvaluing a property just to win the instruction so the property sits on the market unsold and price dropping every few weeks.
The traditional model is flawed. If 2 homeowners put their property on the market and only 1 sells, the one that sells is essentially also paying for the failed marketing of the one that didn’t sell. If you are having your property marketed for sale, then you should pay for it. Simple!
If neither home sells? in one case neither pays a penny, in the other both pay the full free for failed marketing.
Possibly an over simplification?
98 in 100 see the problem with “fee if you sell, fee if you don’t” internet listing system.
Where did you pluck that figure from? Thin air? My vendors have no issue with it as they see we are selling and they know they are getting high quality marketing at a fraction of the price. It is sensible to get paid for work you are doing. As I have said, you are penalising the sellers who actually are serious about selling by making them cover the costs of those who are not. Why does an agent not sell a house? Almost always because the price is too high.
All you agents with your expensive high street premises that you can no longer justify as the internet sells all the property for you can hit the dislike button as you remain in denial.
That figure comes from Rightmove Zoopla and are widely accepted by the rest of the passive intermediary sector as correct. Possibly the confusion is that it is a different way of saying 98%.
If you were a regular reader you would have seen the story where a firm like yours is buying in subliminal advertising on cars.
With you hiding behind a stage name it is hard to say at what level you operate, basic PI or advanced internet lister, the simple economics are that beyond sole trader PI the costs of being an online agent exceed the costs of office premises.
If traditional Agents had the good sense to remove their dead file comparables data from Rightmove, Zoopla and Houser. your business would cease to exist so before you give me too many opportunities of discussing the pro’s and cons of each business model wonder if you want to give me another opportunity of pointing that out while you are sat there irritating them and making them wonder what to do about entry level agents.
Removing comparable data would mean not using the Internet to market the property in the first place, nor logging the sale price with the land registry. Do buyers and sellers want this? How can we turn this wretched Internet thing off? It really isn’t helping old school agents protect there business model in the slightest. And it’s proving way too much information for customers.
If you were an agent you would have read the words dead file comparable data, the stuff that belongs to no-one else but the successful agent, the bit no-one has a right to see let alone access or use. Registering completion price with land registry is an obligation but it only provides index data.
Russell Quirk for prime minister.
Give a clown a stage and they shall perform!