Private Sale Customers Liable for up to GBP84 Million in Double Fees According to New Survey
LONDON, October 17 /PRNewswire/ --
- Over 20,000 Properties Listed on the Top Private Sale Websites in the UK Could be Liable for Double Commission Fees After the OFT Clarified Regulations on Private Sales.
- Private Sale Customers Could Face a Bill for GBP84 Million in Double Commission Fees, as Traditional Agents Claim for Breaches of Sole Agency Contracts.
- Leading Private Sale Websites not Making Customers Aware of the Danger.
The Office for Fair Trading (OFT) recently ruled that Tesco's Property Market private sale website constituted an estate agency business and that anyone selling a property through it could be liable for a traditional agent's fee on top of the listing fee. Tesco immediately withdrew from the private sale market and will now adopt the BrightSale model of full online estate agency.
The OFT's Head of Estate Agent Enforcement Roger Young made very clear what the OFT now defines as "estate agency":
"If an internet property retailer does anything for their clients more than simply carry an advertisement, for example if their website has a message board for sellers to contact buyers, they will be doing estate agency work."(1)
But a survey conducted by BrightSale has revealed that the largest private sale websites are still claiming not to be estate agents and not warning their customers of the dangers of double charging, despite their list of services appearing to place them firmly within the OFT's definition of "estate agency". These include some of the biggest private listers of UK property such as: MoveHomeOnline, HouseLadder.co.uk, Homes-UK, NetMovers and Little House Company.
Over 20,000 properties could be affected by the reclassification, creating the potential for up to GBP84 million in additional and unexpected commission fees for private sale customers.(2)
Facilitates Warns of
Buyer / Double
Seller Charging Potentially No. of
Offers communication Classifies Risk in an Estate Prop-
a 'For or provides itself as Sole Agent under erties
Sale' other agency an Estate Agency new OFT at
Sign? services? Agent? Contracts? guidance? Risk(x)
Movehome
online No Yes No No Yes 5,303
Houseladder
.co.uk Yes Yes No No Yes 4,231
Homes-UK No Yes No No Yes 3,481
Netmovers
.net No Yes No No Yes 2,576
Little
House
Company Yes Yes No No Yes 2,340
Myproperty
forsale Yes Yes No No Yes 1,098
Buyit
privately Yes Yes No No Yes 744
MyKeys Yes Yes No No Yes 416
Sellhouses
.co.uk No Yes No No Yes 240
Total 20,429
(x) Number of properties listed as at 30th June 2007. Source: BrightSale Research
Commenting on the new survey, BrightSale Managing Director Mr Andy Etches said:
"It seems that the OFT has sounded the death knell for pure private sale websites. Like Tesco, these companies will either have to become full service online estate agents, or fold up their tents. Either way, we feel it is very important that they make clear right now the serious danger that customers with existing sole agency contracts are running by using these services. Their customers are potentially in for a very nasty surprise if they sell using a private sale website and then receive a bill for many thousands of pounds from their traditional agent!"
Visit the BrightSale website at http://www.brightsale.co.uk
(1) http://news.bbc.co.uk/1/hi/programmes/moneybox/7042240.stm
(2) Sole agency contracts are by far the most common form of contract in England and Wales, and it is reasonable to assume that a large majority of the properties listed on private sale websites are already listed with a traditional agent. Given an average property price of around GBP235,000 (RightMove, September 2007) and an average sole agency fee of 1.75%, this gives a potential liability of up to GBP84 million on private sale customers.
ENDS
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Press Contacts and further information.
Andy Etches
Founder / MD
BrightSale.co.uk
0800 231 6363
andy@brightsale.co.uk
