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Wednesday, 22 August 2007, 14:31 GMT 15:31 UK

Plea to OFT on home sale rights

Prospective buyers checking estate agent's window An online estate agent has written to the Office of Fair Trading (OFT) urging it to re-examine industry competition.

Brightsale boss Andy Etches alleges traditional agents are trying to freeze out online competition by using sole selling rights contracts.

Under "sole selling" rights, the agent can charge commission whoever the property is sold to, even if they do nothing to bring about the sale.

Under "sole agency" they only charge commission if they sell the property.

Mr Etches believes sole selling rights deals are used to deter sellers from going online, and he acted after traditional agencies hit some customers with fee rises.

The Brightsale managing director also claims that the situation has been exacerbated by one "leading estate agent" appearing to call on traditional firms to band together to freeze out competition from online rivals.

"It's this call to arms over sole selling rights that we were particularly concerned about," he told BBC Radio Five Live.

The OFT said it had received his letter and would respond to it "in due course".

'Stick together'

The Brightsale complaint follows comments from SpicerHaart's chief executive Paul Smith in a column in industry magazine Estate Agency news.

In the article Mr Smith called on traditional agents to "stick together" and consider "reverting to sole selling rights and include a clause which prevents the seller from using an internet property retailer at the same time".

But he later said that he welcomed increased market competition from online firms.

"Private sales are not a problem as long as the vendor alone does all the work," he added.

"Estate agents with sole agency contracts need to be careful, as the market is changing."

He added that without such contracts there would be nothing to stop vendors from instructing an agent, using their marketing services, and then cutting the agency out of the deal by trying to deal directly with a buyer.

"This is clearly unfair as the agent invests time and money in marketing a property in good faith," he added.

'Restrictive'

But Mr Etches has attacked the sole selling rights contract as confusing and unfair for consumers.

"We're asking for greater understanding of these contracts given to people. Because they're often worded in a roundabout way, they don't get directly to the point," he added.

"These sole selling rights are quite restrictive - basically they put you in a position where if you even sold a property to a neighbour over a drink, or your parents or a child you would still have to pay the estate agent commission."

He added he was prompted to act after a number of Brightsale customers said they had been targeted with arbitrary fee increases by traditional rivals.

According to Mr Etches, one customer in Tenby was told by her estate agent that they would increase her commission charge to 2.25% from 1.75% unless she removed her property from the Brightsale website.




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RELATED INTERNET LINKS
Brightsale
Office of Fair Trading
SpicerHaart
Estate Agency News
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