TheBusiness
Julian O’Dell is founder of TM Training & Development
TheDilemma
I recently discovered that a buyer we had sent round to view a property has ultimately bought it via one of our competitors! To say I’m livid is an understatement. Any advice on how to deal with this situation and avoid a recurrence would be appreciated?
JULIAN SAYS… The estate agency profession, in which I have practised for 30 years and of which I am proud, is targeted by the media as questionable in its conduct. On occasion, I have witnessed behaviour and techniques which deserve criticism, but have more frequently seen the other side of the coin where agents are beyond reproach and, in fact, it is their customers who are guilty of underhand actions. A massive subsection of the estate agency
sales market tends to go unnoticed and unpoliced, namely completed transactions where the agent deserving a commission is not paid one. Such situations are usually down to one of two scenarios – either the vendor secretly selling ‘privately’ to a viewer introduced by the agent or buyer and/or seller being persuaded to conduct the transaction via a diff erent agent from the one who set up the viewing. These situations may not be familiar to
many agents, but that does not mean that those agents have not suff ered lost commission. It is frightening to refl ect upon how many of those ‘missed sales’ remain undetected. The size of that part of the market can be
conservatively measured in terms of millions of pounds. An old friend is the MD of one of the most eff ective debt management companies. Recently, we tried to calculate how much commission was being lost to deserving agents in these scenarios. Edging towards caution, and using years of
data, we assessed the facts: 25 per cent of properties that are ‘withdrawn’ by vendors are sold within six months of the termination of the agreement. 15 per cent of those are sold to people who were introduced by the agent who ultimately doesn’t receive commission (but morally deserves to). 50 per cent of those cases are subsequently successfully fought by my debt collecting pal. If we apply all those stats to
42 ● October 2012 ● TheNegotiator
snatch one of your sales if they know you have a robust agency agreement; so check it. Ensure that you have detailed record
keeping and follow up procedures, as well as relationship building and maintenance with vendors and applicants. Those tempted to do “under the counter” transactions and cut the agent out will be less likely to do so if they recognise the fact that you are likely to discover their shenanigans as a result. Keep in touch with all parties, record all activity and make sure customers are happy, all practical ways of stopping unscrupulous activity. If a property does ‘withdraw’ from the
Does your agency agreement have more holes than Swiss cheese?
the UK property market as a whole, the total of missed commission is somewhere between £12m and £16m. So how can you ensure you get what you
deserve? There are two main ways to defeat this one – ‘prevention’ and ‘cure’. ‘Prevention’ includes having a watertight agency agreement signed by your clients. This will stand you in good stead if and when disputes arise. I see a number of agency agreements with more holes than Swiss cheese. Many are still not including the formal notice of the right to cancel the agreement within seven days in relevant circumstances according to the Cancellation of Contracts etc Regulations 2008. I am advised that 50 per cent of agency agreements are unenforceable as a result of shortcomings or failings such as this one or similar. Competitor agents are less likely to try and
market, a letter should be sent thanking the client for their business, expressing the hope that you will be able to help them move in the future and explaining politely that as per your agreement, should any of the people introduced by your agency proceed to buy the property within the timeframe in your signed agreement, then commission will be payable. Include a list of all viewers in the letter. This simple approach will often fl ush out an underhand sale at the outset. The best agents I work with have a system to marry up their withdrawals with completed sales. A quarterly check on the Land Registry and a little further subsequent research reveals which ‘withdrawals’ went on to become sales, and importantly, their buyers. Dovetail that information with your precise record keeping and you may strike gold! One fi rm secured almost £20,000 in lost commission as a result of their last round of checks. I believe in fair play, but I have to admit that the discovery of an agent or client who has tried to do the dirty on me is a wonderful experience. I hand delivered an invoice to such an individual a while ago and will always remember watching her face turn an unusual shade of grey as she realised she had been caught out! ●
www.thenegotiator.co.uk
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