Residential agents work on sales or lettings. They should look at timescales and agree a price with the seller. They handle the marketing of the property i.e where it should be advertised, meet potential buyers and take them to view properties that they think will be suitable for the buyers. Their job is to initiate and manage the selling process. They will then interact with solicitors or licensed conveyancers, who will handle the legal side of any transaction.
They charge the seller a fee, usually between 1 – 3% of the selling price plus VAT. Therefore they will try to get the best price possible for the property, so that their fee is greater. They will not charge if the property is not sold successfully.
Estate agents are regulated by the Estate Agents Act 1979 which regulates the conduct of agents in buying and selling but not letting, this stipulates about matters of offers, handling money and charges made. Also the Office of Fair Trading can issue prohibition notices and anyone receiving one of these cannot continue to practise.
Agents who work in lettings charge various fees for drawing up a lease, providing a tenant, managing and collecting rent.
The Consumers, Estate Agents and Redress Act, which received Royal Ascent on 19 July 2007, meant that estate agents had to join independent redress schemes. Since October 2008 enforcers now have powers to tackle rogue agents. They have increased powers to enter premises and inspect documents and the Office of Fair Trading can issue warnings and prohibition orders to estate agents.
Estate agents marketing a property which requires a Home Information pack must belong to a redress scheme. This must include and energy performance certificate, searches and documents related to evidence of title. A Home Condition report can be produced voluntarily. The scheme is designed to speed up the buying and selling process.
The Government is introducing more changes under ‘CEARA 07’ in 2011. They are aiming to introduce formal record keeping in that all records of transactions and offers must be kept for six years. This will help enforcers if there is any evidence of misconduct. If you do have a complaint you can also contact your local Trading Standards department.
The Office of Fair Trading published a report in February 2010 on buying and selling and the role of the estate agent. This report makes several recommendations on the home buying process which the Government are currently reviewing, so if you are going to sell or boy in the near future it is worth knowing what changes will come into effect.
