Real Lives: For sale: desirable estate agents
No gazumping allowed, and they earn what you think the service is worth - ANNALISA BARBIERI welcomes a new era
Aside from The Independent, Annalisa Barbieri writes for the Economist's Intelligent Life magazine, and the New Statesman. A former contributing editor of the Independent on Sunday and fishing correspondent of the Independent, she is also patron of Rights of Women
Sunday 19 September 1999
The mould for this kind of behaviour was set in the Eighties, when property prices exploded and being an estate agent, with the 1-3 per cent commission that they get on the sale of each property, became really lucrative. (The one crumb of comfort I can offer is that, in global terms our estate agents get paid among the lowest of commissions - Germans pay 6 per cent on sales, Americans 10 per cent.) If we didn't like it, we could stuff it, and they knew that.
Individual estate agents get paid a basic, and a cut of the commission that is levied on the sale/rental of each property. But imagine if the individual you deal with got paid commission on the level of the service they offered? In other words, if we decided whether they deserved their "bonus". Then who would be king?
This is what three men have been asking themselves. At the end of this month, estate agency as we know it will change with the launch of Home (not to be confused with the new club of the same name). Those who live in north-west London may be familiar with a small chain of agents called Greene & Co. They will be swallowed up and spat back out again as Home shops. The three men concerned are David Pollock, MD of Greene & Co, John Hitchcox, founder MD of Manhattan Loft Corporation and Julian Richer, chairman of Richer Sounds. Hitchcox, the man who brought us loft living, is the Miuccia Prada of the property world. He can spot how we want to live (or in this case, buy and sell) before we ourselves know it. And Richer's stereo shops are famous for their customer service.
"When David approached me, I thought, `this is interesting. I'm going to be an estate agent and if you stop someone in the street and ask them who they hate the most, estate agents would rank alongside traffic wardens'," says Hitchcox. Nevertheless, he thought it would be a challenge. With the involvement of Richer, whom he had known for some years, and of course Pollock, the three came up with some radical ideas.
If you sell or rent your property through Home, you'll still have to pay commission to the company, but there are two main differences. First, staff (called, nauseatingly, "colleagues" - home agents would have been so much better and wouldn't sound like something from a trades union conference) are paid commission on the level of service they give you, not on the sale of the house. Agents will get a flat fee of pounds 75 per property sold, but customer service questionnaires will decide the size of their bonuses. Unsolicited thank-you letters can also be translated into bonuses. "So even if they sell you a house, if they treat you like dirt, they get penalised," says Pollock. All staff, not just the individual who sold you the property, get a share of profits.
Next: gazumping. This is (in England and Wales) an entirely legal, if a highly stressful and expensive, business - estate agents are legally bound to pass on a higher offer to the vendor. In an attempt to avoid this, buyers and vendors will voluntarily enter into something called The Goodwill Charter, which is legally binding. This means that both parties pay in an agreed amount (pounds 500-pounds 1,000), and promise to buy/sell to each other within a predetermined period (usually 21 days). The vendor promises not to take any other offers during that time and the buyer promises to buy the property and not gazunder. If either backs out with no good reason (an adverse survey, for instance) the other gets the money. It won't make up for a broken heart if you've set it on a particular house, but it will help pay the bills, and make people think twice about changing their minds on a whim. The beauty of such a scheme is its very existence. "If the other person won't sign the charter, that will tell you a lot about the sort of person you're about to do business with," says Pollock.
Customers will also be able to go into any Home shop and view all the properties that are available without asking. All particulars will be out on display, nothing is hidden. You can also go in and view the company's website on its i-Macs. Retail, not office hours, will be kept, with someone in the office until 11pm to answer any panicky questions. Initially, you will be seen by someone who is not trained to sell you a house, then as soon as you decide you want to proceed you'll be passed on to someone of at least assistant manager level, "and not someone with a day's experience in the job".
In a ring-round of the big estate agents to ask if they were due to radically alter the way they worked, some professed to changes up their sleeves that were, at this stage, "confidential"; others told me about their new internet sites. One audibly gasped when I told her of the commission on service Home were to implement. ("I don't see how that's going to work.")
It remains to be seen if all this really heralds a change - long overdue - in how property is bought and sold. At the moment, according to a paper published by the Department of the Environment, Transport and Regions, 40 per cent of buyers and sellers are disappointed with the process. So how nice it would be to be able to tell the old-timer estate agent that there is someone "just waiting to step in" if they don't give us the service we want. If only something could now be done about the politicians, lawyers and traffic wardens...
Home: launches on 27 September 1999 (tel: 0171 483 2551; http://www.homeishere.co.uk; homeishere.co.uk)
HOW THE MARKET'S CHANGING
5 The Ombudsman for Estate Agents was launched last year, although disappointingly only a quarter of estate agents have joined. If you have a complaint against a member-agent the ombudsman can investigate independently on your behalf. Where financial loss can be proved it can award you up to pounds 50,000, but only if the agent belongs to the scheme, so check before you sign up. (Tel: 01722 333306; fax: 01722 332296; http://www.oea.co.uk; www.oea.co.uk)
5 Members of The National Association of Estate Agents are bound by a Code of Conduct which you can ask to see at participating agents. You can complain about a member-agent to the NAEA, but unlike the Ombudsman for Estate Agents, it cannot award financial compensation.
(Tel: 01926 496800;
5 The Government published a consultation paper at the end of last year which lists various proposals to make the process of buying a property quicker and less painful, and to help prevent gazumping. It is still at the consultation stage, however, and firm conclusions are not expected until next summer.
(Tel: 0171-890 3000. Read the paper at: http://www.housing. detr.gov.uk/hbs/consult/8.htm)
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