[Articles] Group to review consumer concerns over estate agents

Victor

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Group to review consumer concerns over estate agents
From:ireland.com
Tuesday, 6th July, 2004

Unrealistic property guide prices, "gazumping" and the level of estate agents' fees are to come under the scrutiny of a new working group set up by the Minister for Justice, Mr McDowell.

The group, which will meet for the first time tomorrow, has been asked to review current practice within the estate agent and auctioneering profession and make any necessary recommendations for new legislation.

Industry representatives and consumer bodies are included in the group which has been asked by the Minister to make specific recommendations in relation to qualifications for auctioneers and letting agents. It has also been asked to look at the need for a code of ethics for the profession, a regulatory body, and a system for dealing with complaints.

Mr Alan McCarthy, former chief executive of An Bord Trachtála, will chair the group. While it has a wide remit, Mr McCarthy said he will "zero in" on the issues of concern to consumers. "What has received a fair bit of comment in the media recently is the problem of guide prices and what the property eventually is sold at. Our study will certainly embrace that."

As well as the practice of "gazumping" - where an offer is accepted by the vendor and subsequently rejected for a better price - Mr McCarthy said he will look at the practice of "gazundering".

"Gazundering happens when the market is down and buyers then start pulling down the price they have offered. This study is not just about the profession; it's about people's behaviour as well."

The educational qualifications for entry to the profession would also be discussed, he said. Currently no formal qualifications are necessary to work as an estate agent.

"We're taking as wide a view as possible, but we intend to zero in very quickly on what concerns consumers and the industry and what needs to be changed."

Mr McCarthy said he hopes to report to the Minister by the end of the year and intends to place advertisements inviting submissions from interested parties.

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'Huge fees' earned by auctioneers criticised
From:ireland.com
Tuesday, 6th July, 2004

Auctioneers and estate agents are earning "huge fees" that are out of proportion with the amount of work done for their clients, the Director of Consumer Affairs, Ms Carmel Foley, has said.

The massive inflation in house prices meant that agents, who charge clients a percentage of the sale price, were earning unjustifiably large sums, she said.

"I can't see why fees are based on a percentage of the sale price. Fees should be based on an estimate of the amount of work needed or by the hour, or type of transaction. If a house is sold for €10 million as opposed to €1 million, why should they get 10 times the amount of money? Don't tell me they've done 10 times the work."

The Office of the Director of Consumer Affairs (ODCA) is represented in the new working group set up by the Minister for Justice, Mr McDowell, to review practice and regulation within he auctioneering industry.

The biggest grievance of buyers with the industry was inaccurate guide prices, she said, where the sale price was sometimes double the published guide. However, they also experienced problems in the way estate agents described properties, particularly in terms of square footage and garden boundaries. "People need to be able to rely on the particulars as described to them, but sometimes they don't get all the details they would expect."

Ms Foley would like to see an end to the practice whereby each potential buyer has their own survey done. "I would like to see the law provide for the seller to get one survey done which everyone would have access to, which I gather is the practice in France."

Buyers were also "uneasy" about the possibility of "ghost bidders", she said. "There needs to be a way of restoring confidence in the process - that if people are told there are counter offers, that there are genuine counter offers."

Mr Dermot Jewell of the Consumers' Association, which is also represented, said he would call for advertisements and plans to be clearer for consumers to understand. The association regularly received complaints about inaccurate guide prices and inflated estate agent's fees.

Agents are legally bound to get the best price for their clients, said Mr Alan Cooke, chief executive of the Irish Auctioneers and Valuers Institute (IAVI).

"Certain groups would ask auctioneers to go against the interests of their clients. I'm not saying that changes aren't needed, but we can't look at it in isolation from the law."

Currently, the only qualifications necessary to gain a licence were that the applicant was over 18, not an undischarged bankrupt and had €12,700 to lodge with the District Court. Formal qualifications were necessary for IAVI membership, but were not currently a statutory requirement, he said.

The working group is chaired by Mr Alan McCarthy, former chief executive of An Bord Trachtála.

Other members include: Mr Alan Cooke, IAVI; Mr Liam O'Donnell, Institute of Professional Auctioneers and Valuers; Mr Thomas Flanagan, Irish Co-operative Organisation Society Ltd; Mr Pat Davitt, Mullingar Chamber of Commerce; the Consumers' Association of Ireland; the ODCA; Irish Farmers' Association; and the Departments of Justice; Enterprise, Trade and Employment; Environment; and Agriculture and Food.