UK Government puts the brakes on online estate agents
When Tesco launched a property website allowing people to advertise their houses online for a fee of just Â£200 everybody thought it was a great idea, apart from the estate agents.
Over the past 10 years property prices in the UK have skyrocketed and estate agents, who charge a typical 2%, have had a massive increase in revenue. Most will simply take some pictures of your house, upload it to Right Move and pocket Â£4000 for a days work.
Tesco was the first big name to launch an alternative style of property website and pretty much guaranteed its success by uploading hundreds of thousands of properties, employing property experts and giving the site a big advertising budget.
Last week Tesco was forced to shut the site down after The Office of Fair Trading decided that TescoTropertyMarket.com is actually an estate agent and therefore must comply with the same laws as all the other estate agents. The decision was somewhat ludicrously based on the 28 year old 1979 Estate Agency Act.
The problem is that under the act Tesco would be liable for any inaccurate information its users write on their website, so if I lie and state my house has a swimming pool Tesco would be liable. Imagine if a buyer travels from abroad to see my amazing house only to find it’s a run down shell, Tesco would have to pay their travel costs and maybe additional compensation. Normally estate agents check the information before publishing.
Whilst being an on-line estate agent was never our immediate intention we are so encouraged by the positive reaction from customers to Tesco’s entry into this market that we are now reviewing our business with a view to launching a new and exciting on-line estate agency service.
This would enable us to offer our customers personal advice on the sale of their home and give them access to the leading property portal websites which accept listings from estate agents but not from private sellers.
As a result customers would get their property in front of hundreds of thousands of potential buyers.
If they can get properties listed on Right Move for less than the estate agents charge the service will be a winner.