The fears and confusions people suffer when buying or selling houses could be allayed by some imaginative changes, argues estate agent Mark FitzGerald.
Over the past year a Government-appointed review group has been examining the auctioneering and estate agency profession. It is my hope that when it reports it will recognise the public interest would be served by some practical reforms.
The business of buying or selling your home is, for most, the biggest single financial transaction you will ever make. In this as in any transaction, you want certainty, transparency and fairness. The fear of being gazumped, the confusion over guide prices and agonising over whether you should commission yet another surveyor's report can all add to the very considerable stress endured at what is already bound to be a stressful time.
Subjecting people to such fears is unacceptable, particularly as a few quite straightforward reforms would provide the public with a greater degree of comfort when buying or selling property.
Confusion over guide prices would be a thing of the past if all agents were obliged to supply a letter of valuation to the vendor. The valuation contained in this letter should be the recommended guide price which should be published in conjunction with any advertisement of the property.
For the auction campaign to proceed, the vendor should have to confirm in writing that he/she has noted this guide price and valuation.
This vendor's letter should also confirm that, in the event of the auction proceeding, he/she anticipates being in a position to seriously consider offers at the valuation level or a reviewed guide level as advised by the auctioneer, while at the same time retaining a justifiable aspiration to achieve the maximum possible price for the property.
This guide and valuation process should apply for a two-month period, after which time re-evaluation should occur taking into account intervening market conditions. Valuation is of course not an exact science; despite this, vendors should not be allowed to quote a figure lower than the valuation level.
Another source of confusion could be eradicated if, at the point where sale is agreed, there is clarity between the parties as to what is specifically included or not included in the sale. No property should therefore be offered for sale unless a draft contract for sale is available for inspection.
The whole matter of repeatedly contracting surveyor reports would be simplified if vendors provided an independent structural survey of the property from a suitably qualified architect/engineer with appropriate indemnity cover. This report would be made freely available for the benefit of any potential purchaser. As a condition of contract, the purchaser would then reimburse the vendor for the cost of the survey on completion of the sale.
I think this type of approach would greatly benefit the consumer but it may be difficult to impose given the professional exposure visited upon a certifier of any such report and the open-ended consequences in the event of litigation.
But if this practice were adopted, the cost of such reports may escalate considerably in order to meet the increased cost of professional indemnity cover.
However, the benefits to the consumer suggest that it warrants some consideration.
So, you have now seen the surveyor's report and have agreed to buy a property. You still face the fear of being gazumped. An approach that might resolve this issue could include a pre-contract commitment by both seller and buyer where, under certain conditions, non-completion by either party would result in an appropriate financial penalty.
There are assurances that all auctioneers should be obliged to give. All auctioneers or employees of auctioneering firms should be prohibited from buying a property from their own books except where they have openly declared their interest in the property to the vendors. This would need to be fine-tuned so that closely connected parties, such as partners or blood relations, would also be excluded. In our own company, since 1989, we have had a policy that no member of staff, at any level, can buy a second-hand property for sale through Sherry FitzGerald Ltd.
Furthermore, if the public is to be assured of a professional estate agency service, no one should be able to apply for a licence to practise on their own without at least three years' experience with an established auctioneering firm. Applicants would also need an appropriate professional qualification.
I do not believe the public interest would be served by a section of the Civil Service standing guard over the rules of the property market.
Rather, an already difficult process could become a regulatory nightmare for buyer and seller.
A more practical approach would be to set up a disciplinary body. Its members would be drawn from the professional auctioneering bodies and it would be chaired by, for example, a retired High Court judge.
It is my hope that the review group will recognise that the public interest would be served by these kinds of practical reforms.
Raising standards across all business groups is in the interest of all parties involved.
Sellers and buyers alike deserve to be treated with decency and respect.
It is, after all, incompetent to be unethical, and unethical to be incompetent.
Mark FitzGerald is chief executive of the Sherry FitzGerald Group.