A leading estate agency figure has hit back at a lawyer’s claim that agents who use exclusivity agreements are “shysters”.
Last week Donal Blaney, founder of litigation firm Griffin Law, claimed agents using exclusivity agreement targets exploited vulnerable buyers and should be probed by the Department for Levelling Up, Housing and Communities.
He said this was the issue with the high profile case of a family in London who lost their holding deposit overseen by an agency acting on behalf of a vendor who entered into an exclusivity agreement.
Now Bryan Mansell - co-founder of pro-upfront information company Gazeal - has hit back.
He says as most exclusivity agreements will no doubt have been drafted by lawyers, labelling those that produce them ‘shysters’ feels like a an own goal.
And he accuses Blaney of missing the point that a transaction between buyer and seller is not binding until exchange.
Mansell says: “In the (now very long) time between a deal being concluded and exchange, it is worth remembering that the estate agent is under a professional obligation to tell the seller of any new offer.
“This creates a system which results in an average of a third of all offers agreed falling through. This is in no one’s interests – including the agent and the conveyancer who don’t get paid until a transaction completes.”
Mansell insists that an exclusivity agreement can be a great thing – giving the seller and the buyer certainty and peace of mind if it is properly and fairly drafted.
He says it does not need to involve the payment of eye watering amounts of money by just one party to the deal but should have four elements
These are firstly upfront information about the property; secondly a short, balanced reservation agreement which is fair to both buyer and seller; thirdly clarity around the circumstances when a party can withdraw without penalty; and finally the independent resolution of any dispute.
And he insist that conveyancers should be in favour of such agreements because they help to ensure completion of the deal; and also because moving towards such a system voluntarily might pre-empt a government-imposed system which may have hidden disadvantages.
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Most agents I have known have acted professionally. But like every sector, there will always be exceptions. Some buyers are vulnerable and some agents have also seen traditional professional standards supplanted by a corporate, target-driven culture, where targets must be met.
My wife's uncle was a realtor in the USA and I was struck, by the huge differences between our real estate systems. One big difference is that homeownership in the UK has become so politicised.
This has resulted in the conveyancing process becoming encrusted in taxation, planning, green issues, money laundering due diligence and all the rest.
Imagining that you can simplify and speed up the above process by front-loading transactions is I am afraid an illusion.
What needs to happen is for the various elements to be modernised, not consolidated into a single pack, overarched by a reservation agreement, which would still need numerous consumer safeguards to protect the vulnerable. For instance, my local council is taking 52 working days to process a local search!
A Judge once said that it is all very well putting the law in a nutshell -it's keeping there!
A clear case of pot and kettle.
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