Coming on yet another wave, washing up on your doorstep, is yet another edict from Government – this time it is, yes you guessed it, referral fees. One estate agent said to me yesterday, “There will, fairly soon, be no way to make a living out of estate agency or, indeed, lettings.”
Managing a barrage of research, consultations, bans and regulations, the industry bodies seem compelled to agree with what is described as ‘guidance’.
It is true that most long established agencies are supportive of action to get rid of ‘rogue agents’ and ‘rogue landlords’ but some are themselves feeling battered rather than supported.
Mark Hayward, Chief Executive, NAEA Propertymark said, “We’re hugely supportive of the National Trading Standards Estate Agency Team’s (NTSEAT) new guidance for agents on referral fees, issued last month. The guidance will improve transparency and provide greater clarity for consumers at a time when markets across all regions need support to boost consumer confidence.
“We’ve long called for guidance which is easy for both agents and consumers to understand and comply with. Buying a home is no mean feat, and it’s probably the most expensive type of transaction we engage in – so transparent and fair fees are essential. It’s therefore important all agents take the time to understand the guidance and ensure they are compliant.”
Within the new guidelines, agents now need to disclose in writing, at the earliest opportunity:
- The price of its services, including any “compulsory” extras
- Where a referral arrangement exists, that it exists, and with whom
- Where a transaction-specific referral fee is to be paid, its amount
- Where a referral retainer exists, an estimate of the annual value of that retainer to the estate agent or its value per transaction
- Where the referral is rewarded other than by payment, an assessment of the annual value of the reward or the value of the reward per transaction.
Mark Hayward continued: “NTSEAT has given the industry an olive branch. Rather than an outright ban, we’ve been given the opportunity to improve the practice of charging referral fees by increasing transparency. But if the guidance isn’t taken seriously, referral fees could be banned when the guidance is reviewed next year.”
Mark Hayward is running a live webinar on Thursday 21st March 2019. You can join at https://www.naea.co.uk/events/webinars/ and submit questions firstname.lastname@example.org