Marketing Technology

Strange question to ask on a Wednesday morning, I know, but news of a clarification – in the loosest sense – from the UK’s Office of Fair Trading (OFT) got me thinking.

The issue in question is whether websites where one can list property for sale privately should be classed as estate agents and thus fall within the 1979 Estate Agents Act. According to the OFT the answer is yes, and this could have a huge impact on both the websites in question and the homeowners who list their properties on them.

You see, in the UK (I’m not sure if it’s the same in other countries) we have this thing called “sole agency”, which means that in return for paying a single estate agent a lower commission (usually 1-2.5% of the selling price) you agree to pay them their commission if you sell your property through another agent (regardless of whether you feel they’ve earned their money or not). It’s for this reason that you’ll hear UK homeowners refer to “our sole agents” (say it out loud and you’ll get the joke).

With more and more estate agents using the internet as an excuse to place a few local newspaper ads and make appointments at inconvenient times for anyone who calls them – as opposed to doing any real work in marketing your property – no wonder more and more sellers are also using it to increase their chances of clinching a deal.

But now, according to this ruling, a sole estate agent could claim that a vendor using a website breaches their agreement and demand their commission on any sale. In a slightly perverse way, I guess that’s fair enough (I always strike those bits out of the contract anyway – if they don’t like it, I’ll find another agent).

However, what the OFT have completely failed to address in their adjudication is whether those who accept advertisements from private sellers are now classed as estate agents and subject to the 1979 Act. The Times (who carry private property adverts themselves) have already picked up on this and pointed out that Channel 4’s property channel puts them into this category. Indeed, if I create a website for my property and take out Google AdWords to promote it (as I did recently) am I now an estate agent? What about Google? There are also quite a few houses listed on eBay – are they now an estate agent too? I plan to write to the OFT and ask.

Regardless of this issue, isn’t it about time that estate agents started changing their business models to reflect the needs of their customers rather than trying to intimidate us with their archaic practices? They might like to start with the simple concept of getting paid for your own results, not someone else’s.