HIPS: when will the playing field be level?
A FLURRY of activity from trading standards officers appears to be signalling a crackdown on agencies not complying with first day marketing of Home Information Packs.
But is enough being done to send a warning shot across the bows to other agencies or are we just seeing pockets of activity?
Will fines follow and the full arm of the law come down hard on rogue agents or will they simply carry on flouting the rules?
Trading standards officers in Birmingham were among the first to investigate how agents were managing the HIP procedure.
Last year, they looked at the accuracy and value of HIPs and expressed concerns over their findings. But later they backed down on their criticism of some HIP suppliers and took no further action. They called for agents to work with local authorities to ensure ‘teething problems’ were ironed out.
Now Trading Standards in Birmingham and elsewhere are saying they will be carrying out compliance checks and making sure HIPs contain all the correct information and are available at the right time.
They’re also suggesting that any breaches of the regulations may face on-the-spot Penalty Charge Notices.
Quite right too. With first day marketing, it is much more black and white. Either there is a HIP in place, or there isn’t. It is no excuse to say one is on the way, being printed or has been eaten by the dog. Any agent marketing a property without going through the process should expect to have action taken against them.
I for one welcome the crackdown. The system needs to be properly enforced to protect us all.
We have put up with this uneven playing field for far too long, watching other agents steal a competitive advantage because they have refused to play by the rules.
We must avoid a postcode lottery where some agents are never held to account and know they’re able to get away with it.
Of course, the crackdown could become a pointless exercise next year when the general election could see the whole system shelved forever.
Does that make this crackdown just a box-ticking exercise? Maybe. But in the meantime let’s make sure we’re all getting it right.
Time to move to sole selling rights?
THE internet has a lot to answer for, mostly for the good.
It has given us the ability to market our properties to a much wider audience at a far cheaper price than print advertising.
It has enabled us to provide up-to-the minute information, videos and panoramic shots that give prospective purchasers a much better idea of what is on offer.
It has also meant that people who recognise the property can approach the vendor without going through the estate agent and do a deal behind our backs, losing us valuable income.
Private sales where we have done the legwork have long been the scourge of our industry.
At the same time, we have other agents nipping at our heels, introducing prospective buyers and taking the commission, even though we may have sole agency rights.
A recent case involving Foxtons confirmed it was not enough for agents to introduce buyers to a property but they had to introduce buyers to the sale.
But perhaps the biggest problem we are finding, especially in parts of London, is that canny sellers are putting their properties on with many agencies under sole-agency agreements – not multi-agency ones – in order to keep their fees down, causing us untold problems when a sale goes through and someone else claims the credit.
Without any policing of this system, it’s an issue that won’t be going away any time soon.
The answer, therefore, must be a move to sole selling rights. After all, if we have done the marketing and another agency seals the deal, we end up with nothing.
If the vendor chooses to sell to their sister or pretends the person up the road is their best friend, we end up with nothing.
If we have provided our time and expertise to market a property, why should those that benefit not end up paying the price?
Is this new US regulation a step too far?
A NEW code of conduct introduced in the United States to stop overvaluations and prevent mortgage fraud is being met with resistance.
The Home Valuation Code of Conduct, introduced in May, prevents those handing out loans from liaising directly with appraisers, i.e. valuers, so there can be no collusion over inflated values leading to kickbacks from commission.
At the same time, mortgage brokers and estate agents are prevented from ordering valuations.
The result is that around half of all valuations are now undertaken by large Mortgage Appraisal Companies, which are often owned by banks.
It is said by many that these companies are struggling to keep costs down or use non-local valuers, often leading to delays and poorly compiled reports. This, in turn, has led to many sales falling through.
At the same time, smaller individual appraisers say the new code of conduct is killing off their business as lenders are preferring to work with the larger Mortgage Appraisal Companies and, indeed, often have a vested interest which has also opened them up to criticism.
The code may be full of good intent aimed at ending the kind of conditions which led to the catastrophic rise and fall of the UK housing market but it is deemed by many in the real estate and financial sectors to be unreasonable.
Calls are now being made for an 18-month moratorium on the code of conduct, whilst uncertainty continues to keep the market further subdued.
While we know our own system in the UK is far from perfect, I would not like to see us go down the same route and add further red tape to our existing processes.
Instead, we need to ensure that overvaluations become a thing of the past, for the benefit of both the industry and consumers at large.