New Estate Agent Legislation – Could It Be A Good Thing?
Came across an article this morning about modifying the Estate Agent Act to make Estate Agents legally responsibly for selling their advertised properties at, or close, to the price they valued them at and I have to say I love the idea.
I tend to keep a hold of my property investments and let them out, but over the last year I have felt increasingly sorry for the hundreds of property owners who have been unable to sell because their properties have been overpriced.
Many have been led to believe by their estate agents that their properties are worth more than they are and as a result they have become unwilling to lower their prices.
And it is a shame really, as more realistic property prices would definitely help to improve the fluidity of the property market.
The Idea
According to the article I read, Peter Hendry a member of RICS has suggested modifying the Estate Agent Act so estate agents have to buy any properties they are unable to sell.
And I think his argument is very justified…
Essentially by making it so estate agents have to buy whatever they cannot sell; they will be more realistic in their valuations which in turn will make it easier for property owners to sell and invest in property.
And it is true that if estate agents are being genuine in their valuations (and in the properties ability to sell), they should have no problem taking the property off of the property owners hand. After all, if it can sell at the price they are suggesting, what have they got to lose?
Yet I doubt many estate agents will be happy with this suggestion, especially if it comes into fruitation…
Too many have for too long gotten away with overpricing their properties as it has enabled them to get bigger commissions.
Don’t believe me? Take a look at these real scenarios:
One estate agent is believed to have valued a run down property investment at a higher price than other properties in the area which had recently sold – and all of them were in better condition! Where is the justification in that?
Similarly, there are others pricing properties 50%+ higher than they were 5 years ago even though their condition has diminished, their land is less and the property has been on the market for over a year! It’s silly!
I really do hope this suggestion gets taken seriously and the government acts on it. In the long run, more realistic property prices will provide a better outcome for everyone…
Wendy xx
