Daily Archives: March 1, 2020

Referral Fees: No change “for a while” but reform coming

Referral Fees: No change “for a while” but reform coming

The Trading Standards report on the future of referral fees is almost completed and will be sent to government next week.

However, James Munro – head of the National Trading Standards Estate and Letting Agent Team and author of the report – has told EAT that it will “take a while” for government to decide next steps.

Munro says the report will be a summary of findings based on NTSELAT’s assessment of referral fee transparency over the past 12 months, following the introduction of new guidelines.

The report will include a set of options for government to act on – these are likely to range from amending existing Trading Standards regulations, which could happen within months, to an outright ban which would require legislation.

The latter course – if chosen by government – is likely to take some years, says Munro, as it would involve substantial Parliamentary time just as priority is being given to Brexit and related trade issues.

A further option could be for NTSELAT to pursue individual agents seen to be flouting transparency on referral fees with specific investigations: if this problem grew to a wider number of agencies, a warning could come from NTSELAT to the agency industry as a whole threatening specific legislation if the problem continued.

Munro told EAT that while some agents have been hugely cooperative in telling consumers about fees – he singled out Foxtons and Hunters. But other agencies, often smaller ones, made it clear to NTSELAT that they were not informing consumers about fees. “That beggars belief” he said.

In February 2019 NTSELAT told agents that ”failure to disclose referral arrangements may render an estate agent liable for criminal prosecution under the CPRs and/or action by NTSELAT for warning or prohibition.”

Guidance sent to agents at that time outlined how they should inform consumers of any referral fees they received for recommending the likes of conveyancing, legal services or other connected services.

That guidance was produced by NTSELAT with assistance from NAEA Propertymark, The Property Ombudsman, the Property Redress Scheme, the Guild of Property Professionals and the Royal Institution of Chartered Surveyors.

Transaction times slashed and fall-throughs cut by new agents toolkit

Transaction times slashed and fall-throughs cut by new agents toolkit

The National Association of Estate Agents has launched its Sales Protocol Toolkit, in a bid to reduce fall-throughs and dramatically improve transaction times.

The kit, introduced at the NAEA conference yesterday, has been road tested with 200 completed transactions in the Buckinghamshire, Bedfordshire and Northamptonshire areas with startling results.

The average transaction time dropped from as much as 40 weeks to only eight weeks, but the NAEA’s ultimate target is to get that down to a mere 14 days.

The association worked with other agents, conveyancers, the Law Society, The Property Ombudsman and NTSELAT to finesse the documents involved in the pack.

Simon Wilkinson, a partner at agency Wilkinson in Leighton Buzzard, is the NAEA board member who has steered through the pilot programme.

In an interview with Estate Agent Today at the conference he said that the launch of the toolkit marks the start of agents across the country operating it.

It works like this:

– a vendor is emailed a 16 page Property Information Questionnaire which they can complete either before the agent pays a home visit to measure and take photographs, or work through it with the agent at the property. This helps get the property ‘market ready’;

– at the same time the vendor is encouraged to instruct a conveyancer who will assist the vendor getting title deeds and other up-front information and identify problems – missing building regs documents and the like;

– once a prospective buyer has expressed interest, he or she then receives this upfront information, allowing them and their conveyancer to identify areas of concern – if any – or to have comfort that the appropriate documentation is in place;

– a single-page Declaration of Offer subject to contract is then completed by the would-be buyer, giving conveyancer details, status on the sale of their existing property, and details of funding to purchase the vendor’s home;

– a single-page Memorandum of Sale is sent to all parties as soon as a sale is agreed in principle. This would include details of vendor and buyer, chain details, a link to property details and additional information about the property.

“In time – some time off but it will happen eventually – as much as 80 per cent of the details in this online paperwork can be automatically completed by the likes of the Land Registry’s Digital Street project and by portals which will carry a lot of this basic information on every property. The systems will be linked up” says Wilkinson.

The pack will now be circulated to NAEA members and has been designed to comply with CPRs.