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 Real Estate Agency Services
Real Estate or Estate Agents is a English term
for a person or business that arranges the selling, renting or
management of homes, land and other buildings, although an agent
that specialises in renting is often called a Letting Agent.
Real Estate or Estate Agents are mainly engaged in the marketing of property
available for sale and a Solicitor or Licensed Conveyancer is
used to prepare the legal documents. In Scotland, however, many
solicitors also act as estate agents, a practice that is rare in
England and Wales.
It is customary in the United Kingdom and in Ireland to refer to
real estate or real property simply as property.
The term originally referred to a person responsible for
managing a landed estate, while those engaged in the buying and
selling of homes were "house agents", and those selling land
were "land agents". However, sometime during the 20th century
"estate agent" started to be used as a generic term, perhaps
because it was thought to sound more impressive. Estate agent is
roughly synonymous in the United States with the term real
estate broker.
In the United Kingdom residential estate agents are regulated by
the Estate Agents Act 1979 and the Property Misdescriptions Act
1991, as well as the more recently enacted Consumers, Estate
Agents and Redress Act 2007. Enforcement of these regulations
is the responsibility of the Office of Fair Trading (OFT).
Some estate agents are members of the Royal Institution of
Chartered Surveyors (RICS), the principal body for UK property
professionals, dealing with both residential, commercial and
agricultural property. Members, known as “Chartered Surveyors”,
are elected based on examination and are required to adhere to a
code of conduct, which includes regulations about looking after
their clients’ money and professional indemnity insurance in
case of error or negligence.
For residential property there is also a trade association, the
National Association of Estate Agents (NAEA), but it has limited
scope for disciplining members. The Ombudsman for Estate Agents
Scheme, which obtained OFT approval for the Code of Practice for
Residential Sales in 2005 and, as of November 2006, claims to
have 2532 member agencies.
There is no legal requirement to belong to either organisation
in order to trade as an estate agent. Due to the lack of
effective regulation, dishonest and fraudulent practices may
exist in the industry.
A handful of national residential estate agents chains exist,
such as Spicerhaart and Countrywide plc, with the majority being
locally or regionally specialised companies. The number of UK
Estate Agent offices operating in the UK, as of August 2007, was
over 18,000 according to Home.co.uk.
Several multi-national commercial agencies exist, typically
being Anglo-American, pan-European or global. These firms all
seek to provide the full range of property advisory services,
not just agency.
Only a handful of large firms trade in both commercial and
residential property.
Lettings
Estate agents who handle lettings of commercial property
normally charge between 7–10% of the first years rent as fees,
this is in addition to taking the first month's rent in its
entirety. This will be the total fee. If, say, two agents are
charging 10%, they split this between them. Estate agents
selling commercial property (known as investment agents) typical
charge 1% of the sale price.
The fees charged by residential Letting Agents are extremely
variable, depending on whether the agent manages the property or
simply arranges new tenants. Charges to prospective tenants can
vary from zero to £300 in non-refundable fees usually described
as "Application", "Administration" or "Processing" fees (or all
three). There are no guidelines for letting agents on charges
except that they are forbidden by law to charge a fee for seeing
a list of properties; otherwise, they are free to charge as they
please.
The first month's rent in advance plus a refundable bond
(usually equal to a month's rent) is also generally required.
Most residential lettings in the UK are effected through a
particular form of contract known as an "assured shorthold
tenancy".
Assured Shorthold tenancies (generally referred to
simply as "Shorthold") give less statutory protection in terms
of security of tenure than earlier, mostly obsolete, types of
residential lettings. Shorthold Tenancy agreements are standard
contracts generally available from legal stationers and the
internet for around £1, the average lettings agent will charge
£30 to provide such a contract.
Selling
Estate agents selling residential property generally charge
between 1/2% to 4% of the sales price plus VAT, depending on the
contractual arrangement and whether an individual firm has sole
rights to the sale.
Other Approaches
Since around 2000, online estate agents have provided an
alternative to the traditional fee structure, claiming cheaper,
fixed fee selling packages. These online estate agents claim to
give private property sellers the ability to market their
property via the major property portals (the preferred medium
used by traditional high street estate agents) for a fraction of
the cost of traditional estate agency.
New types of property portals based in the United Kingdom have
started to encourage UK and worldwide estate agents to
collaborate by showing all their properties, thus allowing site
visitors to see a vast array of UK and overseas properties all
on one website.
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