30 Aug 2019
How to become a real estate agent UK, The role of an estate agent is to introduce and negotiate with people who want to buy or sell leasehold or freehold properties, which may include agricultural or commercial properties. As per the Office of Fair Trading OFT UK, there are more than 14,500 traditional estate agent offices in the country. Many new business models have emerged by the time where the new agents work online and sell through private seller websites.
What does an Estate Agent do?
The property deals are mostly consumer to consumer real estate transactions but there is little or no interaction between the two parties in the deals. The key issues for poor interest in direct dealing are the mistrust where sellers get many offers from the buyers but they are unable to trust the buyers making these offers. The estate agents provide a platform for the two parties to meet at one place.
People sell property in the UK through estate agency where the estate agents’ work is determined as per the Estate Agents Act 1979(EAA 1979) that states –Introducing and/or negotiating with people who want to buy or sell freehold or leasehold property – as a part of the business pursuant or instructions from a client.
What are the regulations connected to the work?
To know how to become a real estate agent uk and start the work as a real estate agent, it is necessary to know the regulations and duties associated with the job.
The EEA 1979 Act and consumer protection laws -
- The main aim of the EAA 1979 act is to make sure the estate agents provide a fair deal and work in the best interest of the clients where he is obliged as per the act to treat both sellers and buyers honestly, promptly and fairly.
- The Act also provides a minimum standard and behavioral guidelines, where it covers the duties of an estate agent and the third parties involved like handling contractual paper, money, providing details of the business and terms of contracts.
- The Act covers the duties of the estate agent to provide information to clients where they declare a personal interest rate in a transaction and ways to how they need to handle negotiations and keep the records of the offer in papers.
- It involves the ways to handle the money of the buyer and take care of insurance schemes which are needed to cover the liabilities arising out of the estate agency business. It also includes estate agency redress schemes.
What does an estate agent do day-to-day? What key skills do I need to become an Estate Agent?
If a person engages in such activities or is likely to be engaging in estate agency work, he is expected to do the following -
- Sending out property particulars and arranging a viewing for the buyers.
- Offering personal advice to the sellers and buyers.
- Receiving queries/inquiries and answering to the queries from the potential buyer or sellers, and providing details of the property to them.
- Providing information related to the property like the energy performance, certificate or arranging for it to be provided during the final phase of the estate agent contracts.
- The clients’ interested in selling can get the ‘For Sale’ board from the dealer who can put it outside the property where the board may contain all the details of the property and the information expected to be with potential buyers on the behalf of the seller.
- These days sellers can put their property on the internet where certain exemptions as per EEA 1979 are provided. The intermediates allow the private sellers to put up their property and provide a way to the sellers and buyers to meet a prospective client and communicate with them.
What do Estate Agents typically earn?
Most clients (sellers) negotiate about the contract and estate agent prices. The estate agent costs can be a percentage of the UK average property prices. Some surveys find 66 percent sell for a percentage on commission through the property dealer, while, there are multiple concerns over the malpractices in the sector where the clients are unaware that they are entering a wrong deal or there exists a lack of transparency related to estate agent fees and contracts.
What are the challenges and consumer protection schemes associated with it?
Many estate agents use tactics to put pressure on the buyer or seller to sign the deal fast. The pressure may force some to jump to make an offer but clients may remain extra cautious and take their time viewing and deciding. A lot of financial waste is caused by a failed transaction and subsequent duplication of surveys and conveyancing inquiries.
There are Consumer protection schemes where information about unfair or misleading trading practices have been provided that include -
The practice undertaken by any real estate agent should be fair where the information should not be distorted and the economic behavior of the average buyer should be provided in their transactional decision making, this means, the estate agent must take care to provide an appropriate general description of the property like the location, photographs, environment, measurements, pricing, and parking.
The realtors who fail to provide information about any serious problem with the information of the condition or the title of the property – may be considered as misleading as per CPRs.
Real estate agencies can use disclaimers but the disclaimers are mostly written in small fonts at the end of a contract. Even telling the buyers not to rely on all the information through declaimers – may not help in such cases.
CPRs cover the estate agent costs where the provider should be careful not to tell misleading facts related to the price of the UK property, especially, if they are offering discounts. In case of such offenses, the maximum fine can go up to £5,000 per offense.
The Business Protection regulations or the BPRs govern the misleading practices where it is banned to put deceiving advertisements that can affect the economic behavior or injure a competitor.
What is the professional qualification and license required to become an estate agent?
As per UK law, the estate agents are not required to be licensed. The individual agents may be professionally qualified and they may belong to a professional body like RICS. The National Association of Estate Agents provides certain qualification to its members.
Survey data on Estate Agents in England
To recognize how to become a real estate agent UK – it is necessary to know about client’s experiences like
- How many people in the UK buy or sell property through real estate agents?
- How many buyers find such agencies reliable?
- What is the experience of buyers and sellers about real estate agencies?
Survey was conducted on the buying and selling experience (in 2017) by the Department for Business Innovation and Skills commissioned TNS BMRB – through online interviews of around 2000 people who had bought or sold a property in the England or Wales in the two years before March 2015, where the buyers had invested in different types of homes –first home, second home, buy to let property or probate sale.
Tips from survey report - how to become a real estate agent UK
The online survey found
- There are multiple ways people buy or sell but the traditional ways are most dominant.
- 83 percent of the surveyed sold through traditional estate agents rather than selling privately or through an online agent (5%) or by auctions.
- Older sellers do not want to invest their time on complexities involved in such deals and would prefer to use the traditional ways.
- About 75% of the sellers contacted more than one type of real estate agent to value their home and 94 percent opted for the contract where they put the property on the market.
About one in ten opted for the sole agency as they were put off by the multiple agent option due to higher fees.
- The buyer experience reflects that the first time buyer feels the pressure and may try to make offers sooner or higher. 30 percent of the buyers viewed only once the property and they went on to buy before making the final offer. Only 20 percent went for the second view, which was not higher. Many buyers felt they did not view the property as much as they would have liked to, and many buyers in London felt the same.
- About two-thirds of the buyers found the estate agents encouraged them to buy a property where one in four was told that it was priced low for a fast sale, or they said that there is a lot of inquiries about the property, or a lot of interest from multiple buyers for the property.
- Especially, the property in the South-East and London were sold by estate agents as some of the most difficult to attain properties. They say “there is already an offer on the home” or “someone else was just about to accept the offer on the property.” The surveyed buyers also said, “there were discrepancies in the data whether the home was taken off the market before the offer was accepted.” Nearly 88 percent of the buyer felt it occurred to them that - they accepted the offer but the property still showed on the list and the buyer had to request to the sellers to remove their property from the list.
- About 39 percent paid for the full structural survey and 41 percent said they commissioned the report.
- For many buyers, the time taken to conclude the deal – from the time the offer is accepted to the exchange of contracts - took longer, and the first time buyers were more likely to report about it more than experienced buyers.
- Satisfaction was high up to 81 percent among the buyer and 84 percent among the seller, while, only 30 percent of sellers and 20 percent of the buyers were dissatisfied and went to complain.
Survey regarding the failed transactions
The surveys on failed transactions found the buyers were less likely to experience a failed transaction which mostly happened due to personal reasons (15%) and in case of failure of a prospective transaction - the costs, which mostly included the valuation fees, was incurred by the buyers, and the sellers incurred the solicitor fees.
To find out more about new opportunities in the UK real estate markets, click Hamilton International Estates (www.hamiltoninternationalestates.com).
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