Introduction of reservation agreements for buyers and sellers gaining support
As the estate agency business in England moves towards being more robust with professional qualifications and higher standards being introduced there are calls for compulsory reservation agreements to be introduced.
The British Government has promised to make the housing buying and selling process easier, faster and more transparent and the industry itself is working towards the same aims. Housing Minister Sajid Javid has said that estate agents will be required to hold a professional qualification and to be transparent about fees.
He wants to encourage the use of voluntary reservation agreements but some players in the property industry believe that agreements that would prevent either party from pulling out should also be compulsory.
The UK ranks 47th when it comes to ease of purchasing and registering a property according to a report published by the World Bank last year and some 70% of house hunters would favour changes to eliminate gazumping, according to research from the Department of Business, Innovation and Skills.
A new poll published in April by YouGov on behalf of the HomeOwners Alliance and BLP Insurance found that 75% support the introduction of a reservation agreement requiring buyers and sellers to put down a non-refundable deposit to commit both sides earlier in the process. It also found that 80% would like to see buyers show proof of funds before being able to put in an offer to buy a property.
It is only a matter of time before this happens, according to Milton Rodosthenous, founder of online auction LetsBid. ‘Taking reservation fees is a great step forward as it eliminates time wasters and stops gazumping and gazundering,’ he said.
‘Companies Like LetsBid are in pole position to make this a reality as our model achieves the exact outcome everyone is looking for and it will not be long until this becomes the norm when buying a property,’ he added.
LetsBid is also backing the move towards mandatory qualifications for estate agents as it will make the industry more professional. It has a process of checking agents before they can get involved and list their properties on the online auction site. All agents go through an interview prior to being accepted.
‘The customer is important to us so we ensure that all our agents share our values. We have approved 80% of the agents that have applied,’ said Rodosthenous. He added that online companies like LetsBid can add transparency to the buying and selling process.
‘All the listings are controlled by agents so you get the experience and professionalism the traditional High Street agents have for both sellers and buyers,’ he added.