The smart way of buying and selling property

I received an interesting letter from Properties Direct and I trust they do not mind me using their slogan as the heading for this piece:

I read with interest the item in your column of May 25, entitled "Estate agents exploit unregulated situation" as well as your invitation to agents who charge lower fees to contact you, which urged me to write to you.

Our company, Properties Direct, has been operating now for over two years and I am certain that it offers by far the most cost-effective, advantageous buying and selling conditions available to local consumers. As we operate at 0% commission and we offer a totally free service to the buyer, I am sure that you will find it of interest and also very hard to beat.

In fact Properties Direct only charges the seller a very small registration fee (Lm25-Lm45, plus VAT depending on certain options) to feature their property within our systems. Otherwise absolutely no other fees, commissions or charges apply. Furthermore, this registration fee remains valid and details of the property and the seller are forwarded to potential buyers, until the property is sold, no matter how much time passes.

Registered properties, complete with owners' direct contact details, are handed out to potential buyers either from our offices in Gzira, from specialised trade fairs we participate in, or directly through our Website at www.propertiesdirect.com.mt, which you might wish to browse yourself for more complete information about us. We are therefore a specialised platform for real estate which potential buyers may consult at leisure and at no cost. As such, we have assisted thousands of people in this manner.

Naturally, these conditions present an extremely advantageous situation for the consumer and, although we have been very successful from an operational point of view, with around 2,000 properties currently registered with us and having sold many dozens of properties through our services, it is a constant financial struggle to maintain these conditions.

The theory behind our concept is to generate sufficient volumes of property registrations whereby expenses, such as personnel wages, marketing and communication, are amply covered to register a profit. I must say that at times, when considering what estate agents earn from each sale, with our fee averaging at Lm35 (plus VAT), one is tempted to adopt a commission basis similar to them.

However we have so far held fast to our concept and we do really receive much satisfaction in helping people sell and purchase property at such exceptional value for money. So as long as the system at least pays for itself, we intend persevering.

Besides the very limited profit we can hope to generate, the only other drawback we have encountered is a reluctance by certain people, notably the more educated classes, who are often rather sceptical. They seem to think that our system is simply too good to be true! We have often heard comments such as "where's the snag?" or "what's the trick?" and at times we really have a hard time convincing certain people that there isn't one!

This can be a bit annoying at times and makes you wonder whether it is worth being so fair when people simply cannot accept it or believe it possible that anyone can truly give them a good deal. If everyone automatically accuses all business people of being greedy and selfish, then ultimately all business people will truly become this way! Some people simply don't know how to recognise an excellent deal when they are given one.

We would therefore much appreciate your recognition and any exposure that you may be kind enough to give our system which will ultimately also benefit Malta's consumers. (Connie Gafà, customer care manager)

Properties Direct deserve our recognition, all the exposure we can give them, and our support. Indeed, today's communications technology makes it possible to supply services, including buying and selling properties, at a very low cost and, unlike estate agents, Properties Direct are passing on this bonus to the consumer. Let's face it, when all is said and done, the major ingredient in the service supplied in this sector is relaying information.

Websites have broken so many barriers and Properties Direct are making the most of modern technology, thus minimising costs with a view to passing on the benefit to the end user - the consumer. On the other hand, I cannot refrain from referring to the local estate agents' devious approach in their efforts to justify their exorbitant charges.

The greedy five per cent commission (plus VAT, of course) impacts most directly on the asking price. Although estate agents stress that this is paid by the seller and not the buyer, the asking price of the relevant property is accordingly calculated by the seller. As they say, it is always the buyer (the consumer) who picks up the final tab in all transactions.

In no uncertain terms this syndrome, based on estate agents' greed, impacts directly on the constant rise of the cost of property. The thought of estate agents charging buyers Lm4,250 (plus Lm637.50 VAT) for the sale of a house worth Lm85,000 is quite unnerving, indeed highly disturbing, when compared with Property Direct's price (i.e. Lm25 to Lm45 plus Lm3.75 to Lm6.75 VAT) for the same transaction.

In his reply to my comments about lower commissions charged in the UK, the president of the Association of Estate Agents (Malta), Michael De Maria, besmirched UK estate agents by writing that in the UK, "little pre-qualifying of buyers is done, and their set-up permits the agent to send over details for the buyer to view property. Furthermore, extra charges for marketing and advertising are agreed between the agent and the owner or developer." (Letters to the Editor, June 1)

These are false allegations. Indeed, as Ms Debbie Toson, a property manager for a firm of estate agents in Hampstead, London, replied last week: "All buyers are accompanied to viewings by a negotiator, irrespective of how many properties they wish to view or how many times they wish to return, until the right property is found.

"We too make on-site inspections, facilitate bank finance, and advise both buyers and sellers as to their expenses. Exposure too is carried out through Websites, advertising, mail shots, etc. This is carried out at no extra charge to the owner, but at a great expense to our company. We do not make extra charges for marketing and advertising."

I would not be surprised if Mr De Maria writes in to make a similar comparison between the service offered by Properties Direct and the service offered by local estate agents. The question is: Whose service constitutes the best value for money? In my opinion Property Direct offer better value for our money. If I were to sell my house I would use the service given by Properties Direct and buy a new car with the money saved.

Indeed I find Ms Gafà's comments about certain people's scepticism about the inexpensive aspect of the service they supply highly disturbing. Tragically, this is yet another dreaded syndrome local estate agents thrive on. It is high time we snapped out of our tendency to assume that "more expensive" is better and exclusive.