Should estate agents’ professional standards rise to that of the kebab shop?
Last week, the Property Ombudsman published their latest report on complaints against the estate agency profession.
Despite transactions not having increased in the last twelve months, customer complaints that have been upheld are up a whopping 32%. Compensation levied in favour of the consumer stands at over £800,000. A record by far.
Standards are slipping. And the industry itself already suffers from poor perception, the belief being amongst the public that estate agents sit somewhere between tabloid journalists, politicians and traffic wardens in the order of things.
There will be some property people that read this and remark that they are great at looking after customers. Some definitely are. But what we are talking about here are the facts that state that valid complaints are up and whilst review profiles across the sector seem to be deteriorating as more and more turn to venting their spleen online. By way of example, a prominent ‘high street’ estate agency CEO remarked last week that the standards that his firm achieves are far and above that of other firms, especially (ahem) ‘versus the threat of the online hybrid sector’. In actual fact, a glance at AllAgents.co.uk (the UK’s biggest property company review website) and TrustPilot (the best known overall review website in the UK perhaps) quickly demonstrates that the customer feedback and rating for his brand are, well…. quite appalling. And so I wonder if our industry is not just bad at customer service (it is) but is also perpetuated by bosses thatbelieve they’re good at it, but are not? A kind of perception delusion. If so, that’s a mindset that will never, ever change and improve standards because they do not recognise that anything needs to change even when the evidence says that it most certainly does.
So what can be done to improve the falling standards and poor opinion of our industry in light of what is an obvious problem?
Clearly, doing nothing and leaving it up to the profession to self-regulate has not worked. Because complaints are increasing. A lot.
I’m not big on interventionism. Politically, I’m a small government type of person and resist over regulation and interference in markets.
But estate agency interaction is unique and provides a wholly justifiable argument for greater regulation through licensing:
- The average member of the public will move home only every seven to ten years. Research highlights that 60% of adults have lived in the same property for more than 15 years. What this means of course, is that a typical estate agency customer only deals with the moving process a handful of times in their lives and therefore they are less informed of the ins and outs and the pitfalls. Estate agents, on the other hand, list houses, negotiate offers and progress sales all day, every day. They have a distinct knowledge advantage.
- The average house sale value is £290,000, a considerable sum by any standard. Dealing with such a price point is hardly akin to purchasing a TV or even a car. It’s a very big deal indeed.
- And it’s a precious thing. Achieving the best price, overcoming obstacles in the transaction, sussing buyer intention, battling with conveyancing lawyers, dealing with down-valuations, bad surveys; management company issues, absent contract signatories, buyer/seller ultimatums etc etc… these are things that take time and are subject to angst, potential abuse and need a knowledgable and honest hand to assist with.
- Estate agency fees are monstrous. £4000 on average. Most property firms’ branches sell only four properties each month and which means that the difference between profit and financial disaster may be that fourth deal. If there is so much riding on just one transaction, is it tempting for individuals to duck and dive, stretch the truth and to act in their own best interests rather than the purchaser or the seller, in order to get a deal done at any cost? Of course it is.
- The Estate Agents Act 1979 is 37 years old and has barely altered. In that 37 years property prices have increased over 1000% (Source: Nationwide B Soc). The internet has been invented. Buy to let is now a ‘thing’. Mortgages are far, far more complex. And there are thousands upon thousands more estate agents. 25,890 branches to be exact.
All things considered, it’s about time that the Government introduced licensing for estate agents:
- All individuals within the profession should take a knowledge test in order to be allowed to practice and deal with the public. That test should be re-taken on a regular basis.
- An exacting code of conduct should be introduced and those that transgress reassessed for their suitability to undertake estate agency work.
- Those that transgress seriously may be suspended or banned for specific periods.
- Businesses and its individuals may be fined.
Pension salespeople are licensed and regulated. As are mortgage brokers and financial advisors. Casinos and betting shops. Taxi drivers. Even your local kebab shop.
But not estate agents.
How can that possibly be right given the enormity and importance of the transaction involved?
If you agree with me, sign the petition. It is my intention to spearhead the raising of standards in estate agency because, frankly, no-on else seems to be.
Sign it here Implement Mandatory Licensing For Estate Agents