The White Paper containing proposals to regulate those who sell properties is a step in the right direction but this move alone is unlikely to solve the problems in a sector that is so overheated.

The document, spurred by real estate agents themselves, seeks among other things to establish standards through the award of a licence and a mechanism to deal with disputes. However, the scenario has changed so dramatically over the past decade or so that such measures, however good, will only scratch the surface.

The sector has gone from unprecedented development to exceptional sales, many of them buy-to-rent in a naïve expectation that new demand will continue to rise.

Another aspect that has changed the landscape is the advertising medium. The more opportunistic – and underleveraged – vendors first stick a ‘for sale’ sign in the window before moving on to social media. If that fails, they start to spend, as little as possible, starting with classified listings. If no takers are forthcoming, they bite the bullet and accept they might have to pay a commission, whether to a broker, direct marketing companies that send door-to-door flyers or a real estate agent.

At each stage, the vendor reassesses the asking price often without ensuring past advertising material is updated and all the agents duly informed. This leads to buyers blaming the agent if they find a property listed at different prices.

True, agents can be more efficient and update the properties on their list more assiduously, however, that is easier said than done given the many properties on their database.

With properties selling through ‘recommendations’ even before they officially go on the market and with vendors playing buyers off against each other, the situation is rapidly becoming a jungle.

Matters become even more complicated when vendors are not sure whether they want to sell or rent. In such instances, potential buyers or tenants can only keep guessing and hoping, which, of course, is not very healthy.

In the past, claiming “the vendor already has a serious buyer” was the calling card of the second-hand car salesman seeking a quick sale. Nowadays, deals are struck within days and promise of sale agreements signed within hours. Buyers give agents a ‘deposit’ confirming their interest to buy only to find that the vendor had already accepted an offer through another agent. Some may argue that is how business is done.

For the serious agent and the poor, honest buyer, that is conduct unbecoming and a sure way of damaging the reputation of the industry in general and vendors/agents in particular.

The White Paper seeks to knock some sense in the way things are done. But does it? For example, it suggests having a maximum five per cent commission that, however, can be exceeded through agreement by the parties – which sounds suspiciously like a compromise clause. That can ‘incentivise’ agents to raise the asking price to the detriment of the prospective buyer. Vendors too may suffer as their property may be deemed too expensive and remains unsold.

The demand for properties has encouraged agencies to multiply and, to some of them, making a fast buck could come before ensuring a healthy and fair market, which is what would really benefit them.

The White Paper could be interpreted as an admission by agents that their business model is under attack and that it is in their interest to pull on the same rope to protect it.

It may be another brick in thewall but the wall itself needs someserious attention.

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