Rightmove is the latest portal to forge a link with the controversial Modern Method of Auction service being offered to agents.
A statement went out to agents on Friday explaining that technical work was underway to offer the service through supplier iamsold from the spring.
Zoopla has already gone down the MMA route.
Rightmove says that in an industry first, its customers who are already part of iamsold’s partner network will automatically have all of their relevant Rightmove listings “enhanced” with information about MMA.
Agents who don’t currently have an auction service have the option to sign up to iamsold.
MMA has divided opinion amongst agents - on Thursday of last week, one agent left a comment on an Estate Agent Today story saying: “Modern Method of Auction is the next PPI scandal to be exposed. I hope there are solicitors looking into this.”
MMA allows buyers to bid on a property online with a long completion timescale - rival purchasers may have up to 30 days before the end of the bidding - giving the eventual buyer time to sort mortgage finance.
But there has been criticism of the fact that once the online hammer falls, the buyer must pay a substantial non-refundable reservation fee: this can be several thousands of pounds and can, depending on the property price, attract stamp duty.
However, Rightmove’s agency director Dave Anderson says this initiative helps agents give more choice to clients.
“We’re excited to be working with iamsold as our first auction provider for this feature and hope that by differentiating these listings on site it will help educate buyers and sellers about the Modern Method of Auction, so that they know there are different purchasing and selling routes available to them from agents" he says.
“We also hope this may open up more routes to property transactions for agents who may not currently be using an auction provider or who do not have their own auction service.”
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I have still never been able to work out why it has Auction in its name when there is little to no auction involvement in it.
Many solicitors say this is technically Tender not Auction. In any event, there are increasing numbers of people who feel they are being ripped off by the Modern Method with TPOS having decided in the buyers' favour in cases recently and more and more agents/"auctioneers" repaying the reservation fee when the facts are put before them. This is highly likely to be the new PPI scandal because many practitioners are using MMA as a licence to print money and are not complying properly. It just needs national media coverage to start the flow of complainants who, until now, have not come forward because the practitioners say they have no case against them.
Sell a £100,000 property the normal 1% way = £1,200 fee incl VAT
Sell same property via MMOA = £6000 fee
Somebody care to explain and then justify this difference?
I get the concerns, but seems very strange that Zoopla and Rightmove would both be sucked in by it. Whatever you think of them, they both tend to be quite savvy and risk-averse, avoiding any really major scandals.
They must know something that we don't, because as others have stated it does sound decidedly dodgy.
Because it puts them one step closer to dealing directly with sellers and missing out the agents. If it can all be done online, with little negotiation, sale progression chasing, etc. required, they no longer need the agents and can take the sellers fees directly.
If every agent pays then £1350pcm, they make wild profits, as we know. Now imagine if every SELLER paid them £1350 instead. The sales transactions pcm far out number the agents. They are looking long term at the £££s (imho)
As an agent it is our duty to make sure the customer is fully informed about fees, service and overall acting in their best interest to get the job done properly.
We will use a £100,000 house as an example. You could have a first time buyer happy to pay the asking price with their 10% deposit. Under MMA they have to find £6000 extra from somewhere to 'hold' the property in a market where the lenders are pulling the strings. If the FTB had that extra £6000 they could get a better deal with a 15% deposit.... if this property was under MMA you wouldn't have this buyer for your client. Instead you are marketing at a £80,000 guide (which under auction terms you are allowed to advertise 20% below the bottom line price) which means only investors will take a look. So, how is this getting the best price and best buyer in the best position to buy the property?
Seller doesn't pay a fee but loses more than that by selling this way having a limited number of buyers who might pay the extortionate fee if they can get the property purchase price low enough to compensate the £6000 fee.
How do MMA agents sell this product to the vendor? How do they sell it as a benefit?
I've been 'trained' on how to sell MMA and by God it was an eye opener.
PPI scandal and agents mis-selling MMA as a benefit just to earn their higher premium fees.... watch this space I say.
Hi Sam.
Any chance you could get in touch with me about your training on MMA please? I can't leave my contact details here, but via LinkedIn would be ideal.
Many thanks,
Richard
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