Estate agent
Encyclopedia
An estate agent is a person or business that arranges the selling, renting or management of properties
, and other building
s, in the United Kingdom
and Ireland
. An agent that specialises in renting is often called a letting or management agent
. Estate Agents are mainly engaged in the marketing
of property available for sale and a solicitor
or licensed conveyancer
is used to prepare the legal documents. In Scotland
, however, many solicitors also act as estate agents, a practice that is rare in England and Wales
.
It is customary in the United Kingdom
and in Ireland
to refer to real estate
or real property
simply as property.
The Estate Agent remains the current title for the person responsible for the management of one group of privately owned, all or mostly tenanted, properties under one ownership. Alternative titles are Factor, Steward or Bailiff depending on the era, the region and the extent of the property concerned.
with the term real estate broker
.
The job of the agent is to know his or her community and local factors that can increase or decrease property prices. e.g. if a new road or airport is to be built this can blight houses nearby. Equally, the closing of a quarry or improvement of an area can enhance prices. It is the job of the agent to value based on what has, or has not sold in comparison and to achieve the best price for their client.
(OFT) website. Enforcement of these regulations is also the responsibility of the OFT.
In the United Kingdom, residential Estate Agents are regulated by the Estate Agents Act 1979 and the Property Misdescriptions Act 1991, as well as, the more recently enacted Consumers, Estate Agents and Redress Act 2007.
For residential property, there is a trade association for estate agents, the National Association of Estate Agents
(NAEA). NAEA members can be disciplined for breaches of their code of conduct. Their disciplinary process includes everything from cautions and warnings right through to more severe penalties of up to £5000 for each rule breached.
Some Estate Agents are members of the Royal Institution of Chartered Surveyors
(RICS), the principal body for UK property professionals, dealing with both residential, commercial and agricultural property. Members, known as "Chartered Surveyors", are elected based on examination and are required to adhere to a code of conduct, which includes regulations about looking after their clients' money and professional indemnity insurance in case of error or negligence.
The Ombudsman for Estate Agents Scheme, which obtained OFT approval for the Code of Practice for Residential Sales in 2005 and, as of November 2006, claims to have 2532 member agencies.
There is a legal requirement to belong to either organisation to trade as an Estate Agent. Agents can be fined if they are not a member of a redress scheme. The redress scheme was brought in alongside and to govern agents in reference to the HIP (Home Information Pack).
, with the majority being locally or regionally specialised companies.
Several multi-national commercial agencies exist, typically being Anglo-American, pan-European or global. These firms all seek to provide the full range of property advisory services, not just agency.
Only a handful of large firms trade in both commercial and residential property.
The fees charged by residential Letting Agent
s vary, depending on whether the agent manages the property or simply arranges for new tenants
. Charges to prospective tenants can vary from zero to £300 in non-refundable fees usually described as "Application", "Administration" or "Processing" fees (or all three). There are no guidelines for Letting Agents on charges, except that they are forbidden by law to charge a fee for a list of properties. Otherwise, they are free to charge as they please.
The first month's rent in advance plus a refundable bond (usually equal to one month's rent) is also generally required. Most residential lettings in the UK are governed by "Assured Shorthold Tenancy
" contracts. Assured Shorthold Tenancies (generally referred to simply as "Shorthold") give less statutory protection than earlier, mostly obsolete, types of residential lettings. Shorthold Tenancy Agreements are standard contracts generally available from legal stationers and the internet for around £1, although most Lettings Agent will charge £30 to provide one.
It is important that tenant referencing checks are in place prior to a tenant moving into a property. The credit check can be run using credit history data from Equifax, Experian or Call Credit (the three main UK providers) using an in-house website system or a managed referencing service. A reputable agent will also ask for an employment reference and a previous landlord reference to verify that the tenant can afford the rental on the property and that there were no serious problems with the previous agent. It is also essential that proof of ID and proof of residency are also collected and filed.
A report in 2010 showed that Online Estate agents typically charge a fixed fee between £400 - £1000 with some charging a further commission on sale and many charging additional fees for extra services such as the supply of a For Sale sign, professionally taken photographs and accompanied viewings.
In February 2010 the Office of Fair Trading (OFT) announced that a change in the legislation for estate agents has led to a shake up in the way homes are sold, allowing cheaper online agents to become more established than they could before.
New types of property portals based in the United Kingdom have started to encourage UK and worldwide estate agents to collaborate by showing all their properties, thus allowing site visitors to see a vast array of UK and overseas properties all on one website.
Many estate agents are using estate agency software to assist in the sale of houses. The latest technology enables home buyers to receive property details while outside a property, visit estate agents websites for the latest listings and display properties for sale in the local vicinity using location based applications on mobile phones. A lot of property advertising is now automated for the agents using estate agents software.
Research undertaken in 2007 said that the most effective way of selling property is via 'For Sale' signs, 28% of customers had seen the estate agent's For Sale signs before researching more in depth into the properties. Searching for houses via the internet came in a close second (21%), with newspapers third at (17%). The fourth most effective way, and the most traditional, was customers visiting an estate agent's office (15%). However now in 2010 80/90%% of properties are found via the internet and agents see less people walking into their offices. Boards are still very effective, but many agents are now cutting out paper advertising and moving just to digital such as eMags and just the web.
Other methods included auctions (11%), word of mouth (3%) and leaflets (2%).
Property
Property is any physical or intangible entity that is owned by a person or jointly by a group of people or a legal entity like a corporation...
, and other building
Building
In architecture, construction, engineering, real estate development and technology the word building may refer to one of the following:...
s, in the United Kingdom
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
and Ireland
Republic of Ireland
Ireland , described as the Republic of Ireland , is a sovereign state in Europe occupying approximately five-sixths of the island of the same name. Its capital is Dublin. Ireland, which had a population of 4.58 million in 2011, is a constitutional republic governed as a parliamentary democracy,...
. An agent that specialises in renting is often called a letting or management agent
Management agent
A Management agent is a software agent that runs on a managed node and provides an interface to manage it. It can perform operations on managed objects in the node and can also forward notifications to the manager ....
. Estate Agents are mainly engaged in the marketing
Marketing
Marketing is the process used to determine what products or services may be of interest to customers, and the strategy to use in sales, communications and business development. It generates the strategy that underlies sales techniques, business communication, and business developments...
of property available for sale and a solicitor
Solicitor
Solicitors are lawyers who traditionally deal with any legal matter including conducting proceedings in courts. In the United Kingdom, a few Australian states and the Republic of Ireland, the legal profession is split between solicitors and barristers , and a lawyer will usually only hold one title...
or licensed conveyancer
Licensed Conveyancer
A Licensed Conveyancer is a specialist legal professional in the United Kingdom, New Zealand, Australia or South Africa who has been trained to deal with all aspects of property law.Typically, their tasks might include:...
is used to prepare the legal documents. In Scotland
Scotland
Scotland is a country that is part of the United Kingdom. Occupying the northern third of the island of Great Britain, it shares a border with England to the south and is bounded by the North Sea to the east, the Atlantic Ocean to the north and west, and the North Channel and Irish Sea to the...
, however, many solicitors also act as estate agents, a practice that is rare in England and Wales
England and Wales
England and Wales is a jurisdiction within the United Kingdom. It consists of England and Wales, two of the four countries of the United Kingdom...
.
It is customary in the United Kingdom
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
and in Ireland
Ireland
Ireland is an island to the northwest of continental Europe. It is the third-largest island in Europe and the twentieth-largest island on Earth...
to refer to real estate
Real estate
In general use, esp. North American, 'real estate' is taken to mean "Property consisting of land and the buildings on it, along with its natural resources such as crops, minerals, or water; immovable property of this nature; an interest vested in this; an item of real property; buildings or...
or real property
Real property
In English Common Law, real property, real estate, realty, or immovable property is any subset of land that has been legally defined and the improvements to it made by human efforts: any buildings, machinery, wells, dams, ponds, mines, canals, roads, various property rights, and so forth...
simply as property.
The Estate Agent remains the current title for the person responsible for the management of one group of privately owned, all or mostly tenanted, properties under one ownership. Alternative titles are Factor, Steward or Bailiff depending on the era, the region and the extent of the property concerned.
Origin
The term originally referred to a person responsible for managing a landed estate, while those engaged in the buying and selling of homes were "House Agents", and those selling land were "Land Agents". However, in the 20th century, "Estate Agent" started to be used as a generic term, perhaps because it was thought to sound more impressive. Estate Agent is roughly synonymous in the United StatesUnited States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
with the term real estate broker
Real estate broker
A real estate broker, real estate agent or realtor is a party who acts as an intermediary between sellers and buyers of real estate/real property and attempts to find sellers who wish to sell and buyers who wish to buy...
.
The job of the agent is to know his or her community and local factors that can increase or decrease property prices. e.g. if a new road or airport is to be built this can blight houses nearby. Equally, the closing of a quarry or improvement of an area can enhance prices. It is the job of the agent to value based on what has, or has not sold in comparison and to achieve the best price for their client.
Regulation
The full legal term and definition of an estate agent within the UK can be found on the Office of Fair TradingOffice of Fair Trading
The Office of Fair Trading is a not-for-profit and non-ministerial government department of the United Kingdom, established by the Fair Trading Act 1973, which enforces both consumer protection and competition law, acting as the UK's economic regulator...
(OFT) website. Enforcement of these regulations is also the responsibility of the OFT.
In the United Kingdom, residential Estate Agents are regulated by the Estate Agents Act 1979 and the Property Misdescriptions Act 1991, as well as, the more recently enacted Consumers, Estate Agents and Redress Act 2007.
For residential property, there is a trade association for estate agents, the National Association of Estate Agents
National Association of Estate Agents
The National Association of Estate Agents is a membership organisation for estate agents . It is based in and covers the UK.It was founded in 1962 by estate agent Raymond Andrews....
(NAEA). NAEA members can be disciplined for breaches of their code of conduct. Their disciplinary process includes everything from cautions and warnings right through to more severe penalties of up to £5000 for each rule breached.
Some Estate Agents are members of the Royal Institution of Chartered Surveyors
Royal Institution of Chartered Surveyors
The Royal Institution of Chartered Surveyors is an independent, representative professional body which regulates property professionals and surveyors in the United Kingdom and other sovereign nations....
(RICS), the principal body for UK property professionals, dealing with both residential, commercial and agricultural property. Members, known as "Chartered Surveyors", are elected based on examination and are required to adhere to a code of conduct, which includes regulations about looking after their clients' money and professional indemnity insurance in case of error or negligence.
The Ombudsman for Estate Agents Scheme, which obtained OFT approval for the Code of Practice for Residential Sales in 2005 and, as of November 2006, claims to have 2532 member agencies.
There is a legal requirement to belong to either organisation to trade as an Estate Agent. Agents can be fined if they are not a member of a redress scheme. The redress scheme was brought in alongside and to govern agents in reference to the HIP (Home Information Pack).
Industrial structure
A handful of national residential Estate Agents chains exist, such as ConnellsConnells
Connells is a United Kingdom-based Estate Agents, that started in Luton in 1936. It is one of the four companies that grouped together in 2000 to form Rightmove which is widely regarded as the market leader for UK property search websites.-Awards:...
, with the majority being locally or regionally specialised companies.
Several multi-national commercial agencies exist, typically being Anglo-American, pan-European or global. These firms all seek to provide the full range of property advisory services, not just agency.
Only a handful of large firms trade in both commercial and residential property.
Lettings
Estate agents who handle lettings of commercial property normally charge between 7–10% of the first years rent as fees, in addition to taking the first month's rent in its entirety. If two agents are charging 10%, they will split the fee between them. Estate agents selling commercial property (known as investment agents) typical charge 1% of the sale price.The fees charged by residential Letting Agent
Letting Agent
A letting agent is a United Kingdom term for a facilitator through which an agreement is made between a landlord and tenant for the rental of a residential property. In the UK the agreement between landlord and tenant is normally formalised by the signing of a tenancy agreement...
s vary, depending on whether the agent manages the property or simply arranges for new tenants
Leasehold estate
A leasehold estate is an ownership of a temporary right to land or property in which a lessee or a tenant holds rights of real property by some form of title from a lessor or landlord....
. Charges to prospective tenants can vary from zero to £300 in non-refundable fees usually described as "Application", "Administration" or "Processing" fees (or all three). There are no guidelines for Letting Agents on charges, except that they are forbidden by law to charge a fee for a list of properties. Otherwise, they are free to charge as they please.
The first month's rent in advance plus a refundable bond (usually equal to one month's rent) is also generally required. Most residential lettings in the UK are governed by "Assured Shorthold Tenancy
Assured shorthold tenancy
The Assured Shorthold Tenancy is the default tenancy for most dwellings in England and Wales. It is a form of Assured tenancy with limited security of tenure, which was introduced by the Housing Act 1988, with important changes made by the Housing Act 1996....
" contracts. Assured Shorthold Tenancies (generally referred to simply as "Shorthold") give less statutory protection than earlier, mostly obsolete, types of residential lettings. Shorthold Tenancy Agreements are standard contracts generally available from legal stationers and the internet for around £1, although most Lettings Agent will charge £30 to provide one.
It is important that tenant referencing checks are in place prior to a tenant moving into a property. The credit check can be run using credit history data from Equifax, Experian or Call Credit (the three main UK providers) using an in-house website system or a managed referencing service. A reputable agent will also ask for an employment reference and a previous landlord reference to verify that the tenant can afford the rental on the property and that there were no serious problems with the previous agent. It is also essential that proof of ID and proof of residency are also collected and filed.
Selling
Estate agents selling residential property generally charge between 2% and 3% of the sale price plus VAT (Value Added Tax) Additional marketing charges are also applied for advertising, in media such as newspapers and websites.Other approaches
Since around 2000, Online Estate Agents have provided an alternative to the traditional fee structure, claiming cheaper, fixed fee selling packages. These online Estate Agents claim to give private property sellers the ability to market their property via the major property portals (the preferred medium used by traditional high street Estate Agents) for a fraction of the cost of the traditional estate agency. New models have been introduced, which uses digital media screens in place of the agents traditional High Street window. These screens allow agents to take their listings into remote locations where an office may otherwise not be available.A report in 2010 showed that Online Estate agents typically charge a fixed fee between £400 - £1000 with some charging a further commission on sale and many charging additional fees for extra services such as the supply of a For Sale sign, professionally taken photographs and accompanied viewings.
In February 2010 the Office of Fair Trading (OFT) announced that a change in the legislation for estate agents has led to a shake up in the way homes are sold, allowing cheaper online agents to become more established than they could before.
New types of property portals based in the United Kingdom have started to encourage UK and worldwide estate agents to collaborate by showing all their properties, thus allowing site visitors to see a vast array of UK and overseas properties all on one website.
Many estate agents are using estate agency software to assist in the sale of houses. The latest technology enables home buyers to receive property details while outside a property, visit estate agents websites for the latest listings and display properties for sale in the local vicinity using location based applications on mobile phones. A lot of property advertising is now automated for the agents using estate agents software.
Research undertaken in 2007 said that the most effective way of selling property is via 'For Sale' signs, 28% of customers had seen the estate agent's For Sale signs before researching more in depth into the properties. Searching for houses via the internet came in a close second (21%), with newspapers third at (17%). The fourth most effective way, and the most traditional, was customers visiting an estate agent's office (15%). However now in 2010 80/90%% of properties are found via the internet and agents see less people walking into their offices. Boards are still very effective, but many agents are now cutting out paper advertising and moving just to digital such as eMags and just the web.
Other methods included auctions (11%), word of mouth (3%) and leaflets (2%).
'Estate Agent Speak'
Estate Agents are known for their unique way of putting a positive spin on their description of properties. For example, 'in need of modernisation' may actually mean a great deal of repair work is required to a house.See also
- Buying agentBuying agentBuying agents is a term used in the UK to describe people acting as agents on behalf of a buyer and not the seller, as do traditional Estate agents whose job is to obtain the maximum price for a property for the seller...
- Estate (house)Estate (house)An estate comprises the houses and outbuildings and supporting farmland and woods that surround the gardens and grounds of a very large property, such as a country house or mansion. It is the modern term for a manor, but lacks the latter's now abolished jurisdictional authority...
- Guaranteed home saleGuaranteed home saleThe guaranteed home sale is a program offered by some realtors in North America. The program guarantees that a home will be sold for a certain amount of money and by a certain date, or the realtor will purchase the house...
- Price on applicationPrice on applicationPrice on application , more commonly abbreviated to POA is a term often seen on price lists, classified advertisements and is commonly used with regard to real estate prices...
- Real estate broker/agent
External links
- Royal Institution of Chartered Surveyors
- National Association of Estate Agents (NAEA)
- The Independent Network of Estate Agents
- Association of Residential Lettings Agents (ARLA)