Estate Agents Survey Report

8/2/2019 Estate Agents Survey Report

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Home Buying and Selling

Market Study

Survey of estate agents

February 2010

OFT1140b


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Crown copyright 2010

This publication (excluding the OFT logo) may be reproduced free of charge in

any format or medium provided that it is reproduced accurately and not used in

a misleading context. The material must be acknowledged as crown copyright

and the title of the publication specified.


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CONTENTS

Chapter Page

1 Executive summary 42 Methodology 73 Results 9ANNEXE 1: COVERING LETTER 50ANNEXE 2: SURVEY QUESTIONNAIRE 51


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1 EXECUTIVE SUMMARY1.1 As part of the OFT's Market Study of Home Buying and Selling, we

conducted a survey of estate agents1 between 12 August and 7

September 2009. Invitations were sent out to 13,849 estate agencies

and responses were received from 798 (a response rate of six per

cent).

1.2 Some respondents worked in estate agency branches that had been

recently established, with about a fifth (18 per cent) in branches

established no more than five years ago. Others worked in branches

with a longer history, with 69 per cent of respondents working in

branches established for at least 10 years.

1.3 Six per cent of respondents reported that their branch belonged to a

franchise.

1.4 On average, respondents said that in the first half of 2009, they

carried out 20 property appraisals and made five sales per month.

1.5 Estate agents most frequently identified local reputation as the most

important factor in attracting sellers to use their services rather than

their competitors', with 73 per cent stating that it was 'very

important'. Quality of service and access to internet property portals

such as Rightmove and Digital Property Group were also consideredimportant, with 57 per cent and 53 per cent of estate agents,

respectively, stating that these were 'very important'.

1.6 Attracting sufficient sellers was identified as the most significant

barrier to opening a new estate agency business, with 57 per cent of

estate agents considering this a 'substantial hurdle'.

1 Where we refer to estate agents in this annexe we mean estate agent businesses that

responded to the OFT invitation to complete the OFT's online survey questionnaire.

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1.7 By far the most common estate agency fee arrangement, used in three

quarters of cases (75 per cent), was the payment of a percentage of

the final property selling price if the property was sold. Where charges

were based on a percentage of the property price, estate agents in the

first half of 2009 charged, on average, 1.6 per cent when acting as a

sole agent. Just over a quarter (28 per cent) of sellers successfully

negotiated a fee below that offered as standard.

1.8 The next most common arrangement, used in just over a fifth of cases

(21 per cent), was a flat fee, payable only if the property was sold,

which did not vary with the final property selling price.

1.9 The most common marketing tools used by estate agents were their

own branch's website, used 'very often' by 93 per cent, and internet

property portals used 'very often' by 92 per cent. Over a third of

estate agents thought that more than 50 per cent of their sales

originated from internet portals.

1.10 Forty-three per cent of estate agents stated that in the first half of

2009, 20-30 per cent of property transactions failed subsequent to an

offer being accepted by the seller. 'Problems elsewhere in the chain'

was the most commonly identified cause stated for property

transactions falling through, with 32 per cent of estate agents stating

that this was 'very often' or 'often' the reason for the transaction

failure.

1.11 Buyers' solicitors were blamed by respondents for delays in the

property transaction process, with almost a third of estate agents (31

per cent) indentifying them as the most common source of delay.

1.12 On average, responding estate agents stated that almost two-thirds

(65 per cent) of clients opted to use the in-house or referred to service

for Home Information Pack (HIP)/ Home Report (HR) provision.

1.13 Of those estate agents that received referral fees from solicitors, 57

per cent said that they received a commission fee of less than 150

and 38 per cent received a commission fee in the region of 250-

299.

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1.14 Of those estate agents that received referral fees from solicitors, over

half (53 per cent) informed their clients of the size of the fee. A further

28 per cent informed their client about the existence of the fee, but

not the amount. Nearly all (92 per cent) of estate agents that received

referral fees from lenders said they informed their clients of both the

existence of the fee and its amount.

1.15 Sixty-four per cent of estate agents said they didn't think that estate

agents should be obliged to disclose the level of any referral fee or

other financial benefit received from services offered to buyers (not

just the existence).

1.16 Eighty-three per cent of estate agents said they would support positive

licensing of estate agents.

1.17 Eighty-nine per cent of estate agents said they thought regulations

need updating to address new estate agency models (for example

internet-based estate agents).

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2 METHODOLOGY2.1 On 31 July 2009 there were 12,715 UK estate agents on the Experian

(Yellow Pages) database. Although this is not an ideal database as it

only contains those businesses advertised in Yellow Pages (and excludes

businesses whose main trade may be a different activity) it was the

most complete source available to us.

2.2 The Experian database categorises businesses based on the section of

the Yellow Pages in which they chose to advertise. For this reason we

suspected that some Scottish solicitors that do indeed operate estate

agency functions, may have been listed in the solicitors section, and

would therefore be missing from the estate agency database. To

overcome the potential problem of under coverage in Scotland that this

would cause, data for solicitors in Scotland (1,134 businesses) was alsoincluded. All businesses on the combined database were then invited to

participate in our survey of estate agents.

2.3 The covering letter2 sent to the majority of these businesses may be

found at the end of the report in Annexe 1 along with a copy of the

questionnaire in Annexe 2. We did not sample from the database as in

recent years OFT postal and online surveys have been subject to low

response rates and it was only likely that we would achieve an ideal

minimum sample size if we contacted every business.

2.4 The practices of individual estate agency branches, even those that form

part of a large organization with centralized procedures, are known from

industry advice to differ on a location by location basis. With this in mind

a branch level approach was chosen in order to capture this variation.

2.5 A small pilot was conducted by a number of volunteer estate agents and

trade associations, including Royal Institute of Chartered Surveyors

(RICS) the National Association of Estate Agents (NAEA) and the

2 A slightly modified cover letter was sent to business in Scotland that asked that solicitors not

in involved in Estate agency to ignore the invitation to complete the questionnaire.

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National Federation of Property Professionals (NFOPP), provided

feedback on the draft survey, highlighting problems and any questions

they found difficult to answer or irrelevant. Comments were also sought

from the Scottish Government, Communities and Local Government and

the Department for Business, Innovation & Skills. The feedback we

received was used to develop the final version of the questionnaire.

2.6 The survey of estate agents was conducted online. A small number of

respondents requested a paper version of the survey. The covering letter

sent to participants by an external mailing company contained a link to

the survey together with a unique username and password. Fieldwork

took place between 12 August and 7 September 2009. Reminders were

sent to non-respondents at the end of the second week of fieldwork.

2.7 The questionnaire asked respondents to provide some data for 2009 and

specified that this should relate to just the first half of 2009. Where

results for 2009 are presented in this annexe they represent 1 January

2009 to 31June 2009. Comparisons made between 2009 and other

years therefore do not take into account any seasonal variations.

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3 RESULTSRespondents

3.1 Table 3.1 on the next page shows a regional breakdown of responses,

along with details of the number of estate agents in each region invited

to participate in the survey, and the associated response rate. The

response rate did vary within the regions, with the highest (nine per

cent) in the East Midlands and the lowest (four per cent) in London.

3.2 In Scotland 25 responses were received from the 593 listed estate

agencies, while 34 responses were received from the 1,133 solicitors

that were contacted (although a large proportion of these will not have

been involved with estate agency work and so were ineligible for the

survey). Because the exact number of solicitors that participate inestate agency work is unknown, it is not possible to calculate a

response rate for Scotland. There were 39 responses from estate

agents in Wales yielding a six per cent response rate, 22 from Northern

Ireland yielding a seven per cent response rate, and 687 from England

yielding a six per cent response rate. The overall response rate for the

UK as a whole equates to six per cent.

3.3 Of the 13,820 invitations sent out, 760 were returned to sender. If it is

assumed that all of these were returned due to the associated

businesses leaving the market, the resulting response rate rises to

seven per cent.

3.4 With the response rate being so low (six per cent) it is likely that the

survey results suffer from non-response bias. That is, the

characteristics and attitudes of those who chose to respond differ

systematically from those who did not respond. Therefore, it would be

incorrect to generalise the findings of this survey to the population and

they must only be considered representative of those who responded.

3.5 One business was unable to provide branch-level responses and

submitted a single centralised response that represented a number of

separate branches. In producing the survey results, the data for this

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particular firm was weighted in order for it to represent the correct

number of branches. All other responses in the analysis were un-

weighted.

Table 3.1: Regional breakdown of survey respondents

Estate

agencies

invited to

participate

Number of

responses

from estate

agencies

Solicitor

estate

agents

invited to

participate*

Number of

responses

from

solicitor

estate

agents

Response

rate

East of England 1217 108 9%

East Midlands 669 34 5%

London 2844 117 4%

North East 368 19 5%

North West 1085 66 6%South East 2119 132 6%

South West 1245 106 9%

West Midlands 920 49 5%

Yorkshire And The

Humber

775 47 6%

England total 11242 678 6%

Wales 526 39 7%

Scotland 593 25 1133 34

Northern Ireland 326 22 7%

Total 12687 798 6%

* this chart includes some solicitors that do not participate in estate agency work

Estate agency background information

3.6 On average the individual estate agents that completed the

questionnaires had been involved with estate agency for 22 years.

3.7 Only a small proportion (six per cent) of estate agencies reported that

their branch was a franchise.

3.8 Less than a fifth (18 per cent) of the estate agent branches had been

established in the last five years. Twelve per cent had been establishedbetween five and 10 years, 25 per cent between 10 and 20 years, and

45 per cent over 20 years.

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3.9 On average each responding branch had four full-time equivalent

employees3 (FTE) on 31 April 2009. This was down from five on the

same date in 2008 and six in 2007.

3.10 Estate agents were asked about the area over which they offered most

of their properties for sale. On average estate agents in England sellproperties that are close to their branch, with 55 per cent of them

being within five miles. In Scotland, Wales and Northern Ireland estate

agents mostly offered properties for sale that were within 10 miles of

their branch4 as shown in Table 3.2. Only three per cent of estate

agents typically marketed properties further than 10 miles from their

branch.

Table 3.2: Area over which properties typically offered for sale

UK

(798)

England

(678)

Wales

(39)

Scotland

(59)

NorthernIreland

(22)

within 1 mile of

the branch 5% 6% 0% 3% 0%

within 2 miles 18% 19% 3% 14% 5%

within 5 miles 51% 55% 38% 25% 23%

within 10 miles 23% 18% 55% 49% 68%

more than 10

from branch 3% 2% 5% 8% 5%

3 Full time equivalent employment is a measure that accounts for variation in the number of

hours per week worked by employees. For example two employees that work part time (20hours per week) equate to one full-time (40 hours per week) equivalent employee.

4 This result is significant at the 95 per cent confidence level.

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Activity levels and profitability

3.11 In 2009 responding estate agents made an average of 20 property

appraisals per month. This was unchanged from 2008, but below the2007 figure of 28.

3.12 In 2009 responding agents made an average of five sales per month.

This was unchanged from 2008, but down from nine per month in

2007.

3.13 Forty per cent of responding estate agents made a profit in 2009. This

was up from 31 per cent in 2008, but down from 86 per cent in 2007.

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Market factors

3.14 Estate agents were asked to state the importance of factors attracting

sellers to their agency rather than their competitors' agency (Chart

3.3). The most prominent factor, with 73 per cent of responding estate

agents stating that it was 'very important', was local reputation.

Quality of service and access to property portals were also rated very

highly, with 57 per cent and 53 per cent of estate agents respectively

stating them to be 'very important'. Focusing on just those estate

agents in Scotland, the Solicitors' Property Centre was rated 'highly

important' by 44 per cent of respondents. National reputation (nine per

cent), willingness to negotiate on fees (nine per cent) and the number

of sales listings in local papers (six per cent) were among the factors

considered least important, all of which being rated 'highly important'

by less than 10 per cent of responding estate agents.

Chart 3.3: Importance of factors to attract sellers to agency

0%

10%

20%30%

40%

50%

60%

70%

80%

90%

100%

Localreputation

Qualityofservice

Accesstopropertyportals

Localknowledgeofthemarket

Competencyofstaff

AccesstotheSPC*

Ownwebsite

Propertyvaluations

Highprofileinternetpresence

Numberofforsaleboards

Competitivefeelevels

Officelocation

Tradeassociationmembership

Numberofpotentialbuyers

registered

Onestop'shop

Nationalreputation

Willingnesstonegotiateonfees

Numberofsaleslistingsinlocal

papers

proportio

nofestateagents

Very Important Important Moderately important Of little importance Unimportant

Base: 798 Estate agents, *results shown for Scottish estate agents only (59 estate agents)

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3.15 Estate agents were asked to provide their opinion of the potential

barriers they would face in the first year if they were to set up a new

estate agency business. As shown in Chart 3.4, attracting sufficient

sellers and establishing a reputation were the most significant barriers,

with 57 per cent and 55 per cent of estate agents respectively

considering these to represent a 'substantial hurdle'. Of the barriers

asked about, estate agents viewed the cost of IT and office equipment

and finding a suitable location to be among the less sizable barriers

with 27 per cent and 18 per cent respectively regarding these as 'small

hurdles'.

Chart 3.4: Importance of barriers to setting up an estate agency

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Attracting

sufficientsellers

Establishing

reputation

Thecostofoffice

space

Staffwages

Findingsuitably

qualifiedstaff

Findingasuitable

location

Promotionalcosts

Attracting

sufficientbuyers

Thecostofoffice

equipment

Stafftraining

costs

proportionofestateagents

5 Substantial hurdle 4 3 2 1 small hurdle

Base: 798 Estate agents

3.16 Other potential barriers mentioned by estate agents included difficulties

obtaining finance and cash flow problems, often due to the length of

time between setting up an agency and receiving first revenues.

3.17 Most of the responding estate agents (60 per cent) expected that it

would take two years from the point of establishing a new estate

agent business to make a profit (Chart 3.5). Most respondents (68 per

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cent) from Northern Ireland, however, estimated that it would take

three years to generate a profit.5

Chart 3.5: Estimated time taken to generate profit if new estate

agency set up

.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

UK (797) England (676) Wales (40) Scotland (59) Northern Ireland

(22)

proportionex

pectingtomakeprofit

First year Second year Third year Fourth year Fifth year Longer

Base: as indicated in chart in brackets

3.18

Estate agents were asked to rate the importance of various factors

used to advise sellers on the price at which their property should be

put on the market. Comparisons with similar properties were identified

as the most important factor (Chart 3.6) with nearly three quarters (73

per cent) of responding estate agents viewing them as 'very

important'. Knowledge of recent local sales (64 per cent) and

experience of the local market (58 per cent) were also seen as 'very

important' by most estate agents. Among the factors that estate

agents indentified as being the least important for property valuation

5 This finding is statistically significant compared to England and Wales at the 95 per cent

confidence level, but not Scotland.

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was the size of the property, with eight per cent regarding this

'unimportant', online valuation tools (15 per cent), and the Energy

Performance Certificate (65 per cent).

Chart 3.6: Factors determining prices of properties marketed

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Comparisonswithsimilar

properties

Yourknowledgeofrecentlocal

sales

Experienceoflocalmarket

Yourknowledgeofpotential

buyers

Yourknowledgeofthelocalarea

Uniqueorindividualselling

features

Websearchesforsimilar

properties

Thevendor'sopinion

Extrapolationfromoriginal

purchaseprice

Onlinevaluationtools

Sizeofproperty(bymeters

squared)

TheEnergyPerformance

Certificate

pro

portionofestateagents

Very important important Moderately important Of little importance Unimportant


3.19 Another factor mentioned by estate agents that determined the price at

which the property was marketed was the speed at which the seller

wanted to secure a buyer for their property.

3.20 When comparisons with similar recently sold properties were used for

appraisals when pitching for business, seven per cent of responding

estate agents said this was 'very often' or 'often' shared with

prospective sellers.

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Estate agency fees

3.21 Table 3.7 below shows the frequency of use of different fee structures

offered by estate agents. The far most common arrangement, used in

three quarters of cases (75 per cent), was the payment of a

percentage of the final property selling price if the property is sold. The

next most common agreement, used in just over a fifth of cases (21

per cent), is a flat fee, payable only if the property is sold, which does

not vary with the final property selling price. Other types of fee, for

example a percentage based on the original asking price, were used in

one per cent of cases or less.

Table 3.7: Fee structures and frequency

Fee arrangement type Proportion

A percentage of the final property selling price, payable only

if the property is sold 75%

A percentage of the original asking price for the property,

payable only if the property is sold 1%

A flat fee stated in s, that does not vary with the final

property selling price, payable only if the property is sold 21%

A flat fee stated in s, that is payable upfront whether or not

the property is sold 0%

A flat fee stated in s, that is payable upfront, with an

additional fee (either flat or percentage based) payable only

on completion 1%

Base: 798 Estate agents. Note: the frequencies do not add to 100 per cent as estate agents

were asked to provide estimates where data was unavailable.

3.22 Some estate agents provided additional information regarding their fee

structures, including:

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a minimum fee where overall charges were based on a

percentage of the property price

a sliding scale for percentage based fees, with larger

percentages charged where higher sale prices were achieved,

and

initial marketing charges that were non-refundable if the

property were withdrawn from the market - all of the estate

agents that stated this were based in Scotland.

3.23 Under the most common fee agreement, where a percentage of the

final selling price was payable upon sale, responding estate agents on

average charged 1.6 per cent when acting as a sole agent6 in 2009.

This was unchanged from 2008 and 2007, indicating that fees of this

type have been relatively stable over the last two and a half years.

6 This represents the average standard fee when the property is being sold exclusively by the

responding agent, and is not representative of fees charged under a multiple agency agreement

where more than one agency is marketing the property.

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3.24 Chart 3.8 shows a breakdown of how this most common type of fee

varied between the UK countries. The average charge in England in

2009 was 1.6 per cent, above that in Wales (1.5 per cent), Scotland

(1.1 per cent) and Northern Ireland (1.1 per cent).7

Chart 3.8: Sole agency average percentage fees in UK countries

0.0%

0.2%

0.4%

0.6%

0.8%

1.0%

1.2%

1.4%

1.6%

1.8%

England (676) Wales (40) Scotland (59) Northern Ireland (22)

averagesole-age

ncystandardfee

2007 2008 2009


3.25 Responding estate agents estimated that in the first half of 2009 over

a quarter (28 per cent) of clients successfully negotiated a fee below

that offered as standard.

3.26 Estate agents were asked to identify reasons why it might cost more

for them to sell a more expensive property (in this example a property

of 500k compared to 150k). Chart 3.9 below shows the proportion

of estate agents that agreed that the specified reasons listed increased

the cost. The most common, with three quarters of estate agents (75

7 This result is statistically significant at the 95 per cent level. The difference fees in Wales

compared Scotland and Northern Ireland is also significant at the 95 per cent level.

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per cent) agreeing that it increased cost, was that a more tailored

service was required for more expensive properties. Seventy-three per

cent also agreed that the type of marketing required for more

expensive properties was more costly, and two-thirds (66 per cent)

agreed that more marketing was required. Less than a third of estate

agents agreed that there were likely to be more viewings for more

expensive properties.

Chart 3.9: Reasons why more expensive properties cost estate

agents more to sell

0%

10%

20%

30%

40%

50%

60%

70%

80%

More

tailored

service

required

The type of

marketing

needed is

more

expensive

More

marketing

is required

More

customer

interaction

is needed

with sellers

of highervalue

properties

Lower

demand for

higher value

properties

Likely to be

more

viewings

for higher

value

properties

None of the

above

proportionofestateagentsthat

identifyfactor


3.27 Other reasons given by estate agents why more expensive properties

cost more to sell included:

the need to accompany a higher proportion of viewings

viewings taking a greater length of time, and

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more expensive properties typically being involved with longer

chains.

Estate agency services

3.28 Chart 3.10 shows the proportion of responding estate agents thatoffered particular services to sellers when selling a property for them

and whether they were included in the standard fee or available at

additional cost. Seventy per cent of responding estate agents provided

sellers with E-mail/SMS text contacts to enable communication of

information during the sales process. Nearly half (49 per cent) of estate

agents provided floor-plans of the property being marketed within their

standard charge, while a further 14 per cent charged extra (the

remaining 35 per cent did not provide this service). Over four-fifths (82

per cent) of estate agents provided glossy brochures of the propertybeing sold. Of these 40 per cent were provided within the standard

fee, with the remaining 60 per cent involving an additional charge.

Chart 3.10: Services offered to sellers by estate agents

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

E-mail/SMS

contact details

for sellers tocontact EA

Floor plans Glossy brochure Prices shown

per square

metre

360 degree

tours online

proportionofestateagentsoffe

ringservice Built into standard charge Available at extra cost Not available


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3.29 Estate agents were asked if they allowed their sellers access to online

records relating to their property sale. Nearly two-fifths (39 per cent) of

responding estate agents offered online access to communication made

after an offer had been made, 37 per cent offered feedback after

viewings and 37 per cent offered details of all offers made.8 As can be

seen from Chart 3.11 the vast majority of responding estate agents

offered these online information sources without additional charge,

with one per cent or less charging extra in each instance.

Chart 3.11: Provisional of online transaction information

0%

20%

40%

60%

80%

100%

Commu

nications

afteroffer

Feedb

ackfrom

vie

wings

Allo

ff

ersmade

Viewings

arranged

Pro

motional

activity

Interestby

potentialbuyers

proportionofestateagentsprovidingonlinedetailsofservice

Built into standard charge Available at extra cost Not available


3.30 Aside from selling properties, estate agents commonly offer other

related services. As shown in Chart 3.12, almost four-fifths (78 per

cent) of responding estate agents also offered letting services. Nearly

two-thirds (65 per cent) also sold new development properties where

8 Estate agents are required promptly to provide written details of all offers received except

those which a client has told them in writing need not be passed on.

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their client was a developer rather than a private individual selling their

own home. 14 per cent of responding estate agents also said that they

offered a buying agency service, where they acted entirely on behalf of

a buyer purchasing a property from another party. Eight per cent of

estate agents offered none of the specified additional services.

Chart 3.12: Additional services offered by estate agents

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Letting

New

development

properties

Propertiesto

buyand

selloutside

theUK

Residential

propertysale

byauction

Commercial

property

sales

Buyers

agency

services

Noneofthe

above

proportionofestateagentsofferingservice


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Contract types

3.31 The majority of properties (67 per cent) were offered on a sole agency

contract. Fifteen per cent of properties were offered on a sole selling

rights contract. The remaining contract types shown in Chart 3.13

together accounted for the remaining 15 per cent.

Chart 3.13: Contract types used for property sales

0%

10%

20%

30%

40%

50%

60%

70%

Sole agency Sole selling

rights

Multiple

agencies

Joint agency Joint sole

agency

proportionofclientsusingagreements


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3.32 The proportion of responding estate agents offering a 'ready, willing

and able purchaser' clause9 was relatively similar across all contract

types, from 31 per cent for sole agency to 25 per cent for multiple

agency (Chart 3.14).

Chart 3.14: Proportion of estate agents offering 'ready, willing and

able purchasers' clause by contract type

0%

5%

10%

15%

20%

25%

30%

35%

Sole agency Joint agency Joint sole

agency

Sole selling

rights

Multiple

agenciesproportionofestateagentsoffer

ing'readywillingandable'

purchaserc

lause


3.33 In cases where a joint sole agency agreement10 was used, 95 per cent

of estate agents stated that they made the seller aware of the

commission being paid to the third party estate agent.

9 Where the seller has to pay the estate agent if they find a buyer who is prepared and able to

buy the property and exchange unconditional contracts (even if the seller withdraws from the

sale and unconditional contracts are not exchanged).

10 A joint sole agency agreement exists where more than one estate agency agrees to share a

single commission from the sale of a property.

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3.34 Estate agents were asked to state the typical period of time that clients

were contractually bound to their services. Twenty-two per cent of

estate agents had no minimum contract period (Chart 3.15). 34 per

cent of estate agents had contracts lasting less than 12 weeks, and 41

per cent had contracts lasting between 12 and 20 weeks. Three per

cent of estate agents had contracts that lasted more than 20 weeks.

Chart 3.15: Length of typical contract binding sellers to estate

agents' services

0%

5%

10%

15%

20%

25%

30%

no

minimum

< 4

weeks

>4 - 8 -

12 -

16 -

20 -

24

weeks

proportionofclientsboundtotypic

alcontractperiods


Marketing properties

3.35 Estate agents were asked how often they used a selection of

marketing activities to sell properties. As can be seen from Chart 3.16,

the internet plays an important part in this area, accounting for the top

two most frequently cited actions: 93 per cent of estate agents 'veryoften' used their own branch internet site to market properties, and 92

per cent 'very often' used property portals. In Scotland 58 per cent of

estate agents 'very often' used Solicitors Property Centres. Some more

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traditional approaches were still used 'very often' by a high proportion

of estate agents, such as contacting their own pool of potential buyers

(86 per cent) and erecting 'for sale' signs (82 per cent). The use of

press advertising was focused on local publications with high

proportions of estate agents 'rarely' or 'never' using national

publications such as national property magazines (88 per cent),

national newspapers (83 per cent) and national general magazines (92

per cent).

Chart 3.16: Activities used to market/sell properties

0%

10%

20%

30%

40%

50%

60%70%

80%

90%

100%

Yourownbranchinternetsite

Propertyportalsite(s)

Contactin

gownpoolofpossible

buyers F

orsalesigns

Agroupinternetsite

Localnewspapers

SolicitorsPropertyCentre*

Generalmailshots

Localpropertymagazine

Localgeneralmagazine

Open/showdaysforspecific

homes

Auction

Nationalpropertymagazine

Nationalnewspapers

Nationalgeneralmagazine

proportionofestateagent

susingactivity

Very often Often Sometimes Rarely Never

Base: 798 Estate agents. *results shown just for just those estate agents operating

mainly in Scotland

OFT1140b | 27


28/90

3.36 Those estate agents that stated that they used internet property

portals were asked to estimate the proportion of eventual sales that

originated as a result of advertising through this channel. As can be

seen from Chart 3.17, a relatively high proportion of estate agents (30

per cent) estimated that 20 - 30 per cent of sales originated from

portals. Thirty-seven per cent of estate agents that used portals

thought that over 50 per cent of their sales originated from this source.

Chart 3.17: Proportion of sales originating from property portals

0%

5%

10%

15%

20%

25%

30%

35%

Les

sthan1%

1%t

o5%

6

%t

o10%

11

%t

o20%

21

%t

o30%

31

%t

o40%

41

%t

o50%

51

%t

o60%

61

%t

o70%

71

%t

o80%

81

%t

o90%

91%t

o

100%

proportionofsalesinititallyg

eneratedbyportals

Base: 760 Estate agents that sometimes advertise on property portals

OFT1140b | 28


29/90

3.37 Of the portals used, estate agents stated how important they

considered each to be. As shown in Chart 3.18, Rightmove was

considered the most important property portal, with 79 per cent of

responding estate agents viewing it as 'very important' and a low

proportion (13 per cent) stating that they did not use it. Two more

portals, Primelocation (14 per cent) and Findaproperty (13 per cent),

were rated as 'very important' by more than 10 per cent of estate

agents. In Scotland, Solicitors Property Centre portals were considered

'very important' by 48 per cent of estate agents, which is equivalent to

the percentage of estate agents in Scotland that considered Rightmove

to be 'very important'.

Chart 3.18: Importance of individual internet property portals

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Rightmove

AnSPC

portal*

Primelocation

Findaproperty

Propertyfinder

Globrix

PropertyLive

Fish4homes


Very important Quite important Somewhat important Not important Don't use

Base: 760 Estate agents that sometimes advertise on property portals. *results for

Solicitors Property Centres' Portals are shown just for those estate agents that mainly

operate in Scotland (46).

OFT1140b | 29


30/90

Experience of sales process

3.38 Chart 3.19 below shows the average time taken, for successful

transactions, from an offer being accepted on a property to completion

in 2007-09. In 2009 most properties (52 per cent) sold in 11-14

weeks. In 2007, 31 per cent of properties sold within eight weeks,

compared to 20 per cent in 2008 and 26 per cent in 2009.

Chart 3.19: Average time taken to sell properties, 2007-09

0%

5%

10%

15%

20%

25%

30%

1 to 4 5 to 6 7 to 8 9 to 10 11 to

12

13 to

14

15 to

16

17 to

18

19 to

20

Over

20

weeks

proportionofpropertiestakingspecifiedtimeto

sell

2007 2008 2009

Base: 798 Estate agents. Chart based on un-weighted data.

3.39 Estate agents were asked to identify the party most often responsible

for delays when they occurred. Buyers' solicitors11 were most

frequently recognised as being to blame for delays, with almost a third

of estate agents (31 per cent) identifying them as the most common

11 It should be noted that delays perceived to be due to a solicitor may be caused by the slow

provision of required information from, for example, local authority searches, the seller or the

buyer.

OFT1140b | 30


31/90

cause of delay (Chart 3.20). Thirty per cent of estate agents reported

that 'someone else in the chain' was most often liable for delays

(although, this category does not stipulate the cause of the delay in the

chain, which may have been due to one of the parties in the other

categories, for example, solicitors or lenders). Other common causes of

delays were the buyers' lender, and the sellers' solicitor, highlighted by

17 per cent and 12 per cent of estate agents respectively. One per

cent of estate agents stated that sellers were mainly to blame for

delays and no estate agents said that their own estate agency office

was ever responsible.

Chart 3.20: Parties most often responsible for delays

0%

5%

10%

15%

20%

25%

30%

35%

Thebuyers'

solicitor

Someoneelse

inthechain

Thebuyer's

lender

Thesellers'

solicitor

Thebuyer

TheHIP/HR

provider

Localsearch

providers

Theseller

Yourbranch

proportionofestateagentsstatingmaincauseof

delays


OFT1140b | 31


32/90

3.40 Forty-three per cent of estate agents stated that 21-30 per cent of

property transactions failed subsequent to an offer being accepted by

the seller in the first half of 2009 (Chart 3.21). In 2007, 46 per cent of

estate agents reported that less than 20 per cent of transactions fell

through. The equivalent Chart for 2008 was 36 per cent and 47 per

cent for the first half of 2009.

Chart 3.21: Property transaction failures subsequent to an offer

being accepted by the seller

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Fewer

than 10%

11% to

20%

21% to

30%

31% to

40%

41% to

50%

51% to

60%

61 to

70%

71% or

more

proportion of sales falling through


2007 2008 2009


OFT1140b | 32


33/90

3.41 The main cause identified for property transactions falling through after

an offer has been accepted by the seller was reported to be 'problems

elsewhere in the chain', with 32 per cent of estate agents stating that

this was 'very often' or 'often' the reason. The buyer not being able to

secure a mortgage was the second most common reason, with 21 per

cent of estate agents reporting this to occur 'often' or 'very often'

(Chart 3.22). Four per cent of estate agents indentified that the buyer

changing their mind was 'very often' the reason for sales falling

through. Three per cent stated that the buyer changing their mind due

to survey or search results was 'very often' the reason for transaction

failures.

Chart 3.22: Reasons for property transactions not being completed

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Problems

elsewherein

chain

Insufficient

buyerfinance

Buyerchanged

mind

Buyerchangeof

minddueto

survey

Lenderrefused

buyerfinance

duetosurvey

Sellerchanged

mind

Sellerrefused

buyer'sproposal

ofloweroffer

Buyerrefused

seller'sdemand

forhigheroffer

Conveyancing

uncoveredlegal

problems




OFT1140b | 33


34/90

Ancillary / third party services

3.42 The majority of responding estate agents could provide a number of

ancillary services, either in-house or via referral to providers with which

they had an established relationship, as shown in Chart 3.23. Ninety-

four per cent of estate agents could provide financial advice (41 per

cent in house and 51 per cent via referral), 95 per cent could provide

surveying services (35 per cent in house and 60 per cent via referral),

96 per cent could offer HIP/HR provision (30 per cent in house and 66

per cent via referral) and 98 per cent could provide legal services (18

per cent in house and 80 per cent via referral).

Chart 3.23: Provision of ancillary / third party services

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Financial

advisor

Surveyors HIP/HR

provider

Solicitors Insurance

provider

Search

provider

Lender

pro

portionofestateagents

can provide in-housecan refer customers to provider with which EA has a relationship


OFT1140b | 34


35/90

3.43 Those estate agents that offered ancillary services, either in-house or

via referral, were asked how frequently their clients used these

services (Chart 3.24). Almost two-thirds (65 per cent) of clients opted

to use the in-house or referred to service for HIP/HR provision, with the

equivalent proportion for solicitors being 44 per cent, search providers

35 per cent and financial advisors 34 per cent.

Chart 3.24: Proportion of clients using ancillary services provided in-

house or via referral

0%

10%

20%

30%

40%

50%

60%

70%

HIP/HR

providers

(750)

So

licitors/

Con

veyancers

(769)

Search

providers

(435)

F

inancial

advisers/

M

ortgage

brokers(724)

Surveyors

(733)

Insurance

providers

(491)

Lenders(228)

proportionofcustomersusinginhou

se/referredservice


OFT1140b | 35


36/90

3.44 Those estate agents that had established relationships with third party

providers of ancillary services were asked if they received a referral fee

or commission from each type of third party provider. Chart 3.25

shows the proportion estate agents that received payments from

providers of each type of service. Nearly half (49 per cent) of estate

agents that referred clients to a third party solicitor received a referral

fee or commission from the solicitor. The equivalent proportion for

insurance providers was 42 per cent, 40 per cent for financial advisors,

and 31 per cent for HIP/HR providers.

Chart 3.25: Proportion of estate agents receiving referral fees or

commission from third party service providers

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Solicitors

(770)

Insurance

providers

(492)

Financial

advisers /

Mortgage

brokers

(725)

HIP/HR

providers

(751)

Surveyors

(734)

Lenders

(405)

Search

providers

(436)

proportionofesta

teagentsreceivingreferralfee/comm

ission

Base: Estate agents that referred clients to third party service providers,as indicated in chartin brackets

3.45 Those estate agents that received commission/ referral fees from third

party service providers were asked, within given ranges, to providedetails of the average amounts received for a typical transaction on a

200,000 property. Table 3.26 shows a breakdown of the fees

received from each type of service provider.

OFT1140b | 36


37/90

57 per cent of estate agents received less than 150 from

solicitors, and 38 per cent in the range of 250-299

nearly all (93 per cent) of estate agents received less than 100

from surveyors

most received less than 100 from HIP/HR providers (87 per

cent) and search providers (91 per cent)

64 per cent received less than 150 from financial advisors and

27 per cent between 150 and 300. Eight per cent received

over 300, with three per cent receiving more than 500

nearly four-fifths (79 per cent) received less than 50 from

insurance providers.

OFT1140b | 37


38/90

Table 3.26: Average commission/referral fee received from third

party service providers

Fee received

Solicitors/

Conv

eyancers

Surveyors

HIP/H

Rproviders

Searc

hproviders

Finan

cialadvisers/

Mortgagebrokers

Lenders

Insuranceproviders

0-49 9% 56% 47% 57% 15% - 79%

50-99 20% 37% 41% 35% 26% - 8%

100-149 28% 5% 11% 4% 23% - 4%

150-199 2% 2% 1% 0% 13% - 3%

200-249 2% 0% 0% 0% 10% - 2%

250-299 38% 0% 0% 4% 5% - 1%

300 -349 0% 0% 0% 0% 2% - 0%

350-399 0% 0% 0% 0% 2% - 1%

400-449 0% 0% 0% 0% 0% - 0%

450-499 0% 0% 0% 0% 1% - 0%

More than 500 0% 0% 0% 0% 3% - 2%

Base 288 84 283 23 351 - 104

Base: Estate agents that received fees from third parties. Figures for lenders not shown due to

low base.

3.46 Estate agents that received commission/ referral fees were asked

whether they typically made their clients aware of this, and if so

OFT1140b | 38


39/90

whether they informed them of the value. Over two-thirds (71 per

cent) of estate agents that received commission from insurance

providers did not typically share this information with their client, while

18 per cent made their client aware of the fee, but not the amount,

and 11 per cent informed their client about the fee and its quantity, as

shown in Chart 3.27.

3.47 Nearly half of estate agents that received fees from search providers

informed their clients of its existence, while a further four per cent also

informed them of the amount. Half (52 per cent) made their clients

aware of fees received from HIP/HR providers, while a further 12 per

cent also informed them about the amount. Over half (53 per cent)

informed their clients of the size of fees received from solicitors. A

further 28 per cent of estate agents informed their client about the

existence of the fee, but not the amount. Over half (57 per cent) madetheir clients aware of fees received from surveyors, while a further 10

per cent also informed them about the amount. Nearly all (92 per cent)

informed their clients of both the existence of fees received from

lenders and the amount.

OFT1140b | 39


40/90

Chart 3.27: Proportion of estate agents revealing referral fees or

commission from third party service providers

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Insurance

providers

(104)

Search

providers(23)

HIP/HR

providers

(283)

Surveyors

(84)

Financial

advisers/

Mortgage

brokers(361)

Solicitors/

Conveyancers

(288)

Lenders(37)

proportionofestateagentsrevealingreferra

lfees/

commission

Typically, we tell them we receive referral fees, and the amount

Typically, we tell them we receive referral fees, but not the amount

Typically, we do not tell them we receive referral fees

Base: Estate agents that received fees from third parties, as indicated in chart in brackets

OFT1140b | 40


41/90

3.48 Four-fifths (81 per cent) of estate agents stated that the in-house

provision of ancillary services accounted for 0-10 per cent of their

profit in 2008. Fourteen per cent said that they accounted for 10-50

per cent of their profit, and five per cent that they accounted for over

50 per cent of their profit (Table 3.28). Nearly all (93 per cent) of

estate agents claimed that less than 10 per cent of their profit was

attributable to the referral of ancillary services to third parties. Six per

cent said that they made 10 - 30 per cent of their profit from referrals,

and one per cent said they made more than 30 per cent.

Table 3.28: Proportion of estate agent profit accounted for by in-

house ancillary services and third party referral fees

Proportion of estate

agents

Proportion of profits attributable to ancillary services In-house 3rd parties

0-10% 81% 93%

11-20% 6% 5%

21-30% 4% 1%

31-40% 3% 1%

41-50% 2% 0%

More than 51% 5% 0%


OFT1140b | 41


42/90

Complaints, enforcement and licensing

3.49 All of the responding estate agents stated that they were a member of

a trade association or professional body. Chart 3.29 below shows the

proportion of estate agents that belonged to each of the specified

organisations. Eighty three per cent of responding estate agents stated

that they were members of the Property Ombudsman (formerly the

Ombudsman for estate agents), and 63 per cent that they were

members of the National Association of Estate Agents.

Chart 3.29: Proportion of estate agents belonging to trade

associations or professional bodies

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

The Property

Ombudsman

National

Association of

Estate Agents

Royal Institution

of Chartered

Surveyors

Guild of

Professional

Estate Agents

Solicitor's Code

of Conduct

proportion

ofestateagentsbeingmembersofs

cheme

Base: 798 Estate agents, Note: Sums to more than 100 per cent as estate agents may be

members of more than one body.

OFT1140b | 42


43/90

3.50 The majority of responding estate agents (68 per cent) stated that they

received no complaints from sellers in the first half of 2009. Two per

cent received three or more complaints from sellers over the same

period. Nearly all (89 per cent) responding estate agents stated that

they received no complaints from buyers in the first six months of

2009, and two per cent that they had received three or more. Chart

3.30 shows the proportion of estate agents that received various

numbers of complaints from buyers and sellers.

Chart 3.30: Proportion of estate agents receiving complaints from

buyers and sellers

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2007 2008 2009proportion

ofestateagentsreceivingnumberofcomplaints

> 3

complaints

3 complaints

2 complaints

1 complaint

no

complaints


OFT1140b | 43


44/90

3.51 Chart 3.31 shows what typically happened to complaints that were

received. A third of complaints from sellers (36 per cent) and buyers

(33 per cent) were resolved by the receiving branch. A following third

of complaints from sellers (32 per cent) and buyers (33 per cent) were

resolved by the estate agents' head offices. A fifth of complaints from

sellers (20 per cent) and buyers (22 per cent) were dropped by the

complainant. Six per cent of sellers' complaints and seven per cent of

buyers' complaints were sent to the Ombudsman/professional scheme

for resolution. One per cent of sellers' complaints were resolved at the

small claims court.

Chart 3.31: Outcome of complaints made to estate agents

0%

5%

10%

15%

20%

25%

30%

35%

40%

Resolvedbyyo

urbranch

Resolvedbyyourhead

office

Dropp

edbythe

com

plainant

Sentto

Ombudsman/professional

schemeforresolution

Resolvedatsm

allc

laims

court

proportionofcomplaints

Seller Buyer

Base: 398 estate agents that received complaints

3.52 Estate agents were asked to identify the qualifications or skills relevant

to providing estate agency services that their staff possessed. Table

3.32 shows the proportion of estate agents that stated that their staffhad the specified types of qualifications and skills.

OFT1140b | 44


45/90

3.53 Good communication/ people skills were most commonly stated, with

88 per cent of estate agents reporting that their principals and 90 per

cent that their other staff possessed these.

3.54 Forty-three per cent of estate agents said that they required their

principals to pass an exam following internally-provided training, and37 per cent of estate agents stated that this was required of other

staff. Twenty-six per cent said that their principals had basic training

by professional bodies (21 per cent for other staff), and seven per cent

said that their principals had a Certificate of Practising Estate Agents

(three per cent for other staff).

3.55 On average responding estate agents reported that their principals

undertook 26 hours of training per year and that other staff undertook

28 hours.

OFT1140b | 45


46/90

Table 3.32: Proportion of estate agents with staff possessing

relevant skills and qualifications

Principals Other staff

Good communication/people skills 88% 90%

Basic knowledge of estate agency 87% 89%

Negotiating skills 86% 83%

IT/computer skills 78% 87%

Typing skills 53% 78%

Marketing71% 53%

Management skills 84% 39%

Internally-provided training without exam pass required 55% 66%

Internally-provided training with exam pass required 43% 37%

Level 3 Technical Award in Sale of Residential Property 28% 28%

Basic training by professional bodies 26% 21%

Advanced training by professional bodies 23% 8%

Foreign languages 6% 7%

Certificate of Practising Estate Agents 7% 3%

NVQ level 2 3% 7%

NVQ level 3 4% 6%

Level 5 Diploma in Residential Estate Agency 3% 2%

Base: 798 estate agents

OFT1140b | 46


47/90

3.56 Estate agents were presented with a number of statements and asked

to state their level of agreement/ disagreement with them. The results

are presented below:

93 per cent of estate agents agreed that buyers should be

obliged to validate that they have means to purchase propertiesbefore putting forward offers

93 per cent of estate agents agreed that their branch always

makes sure that buyers realise they are acting for the seller

91 per cent of estate agents agreed that they always check to

make sure the prospective buyer will have sufficient funds to

buy at the agreed price

89 per cent of estate agents agreed that the regulations need

updating to address new estate agency models (for example,

internet-based estate agents)

83 per cent of estate agents agreed that there is a need for

positive licensing of estate agents

82 per cent of estate agents agreed that possible visits from

Trading Standards Officers ensure that they comply with the

law

76 per cent of estate agents agreed that the sanctions for

estate agents who break the law are strong enough

71 per cent of estate agents agreed that self regulation (for

example, The Property Ombudsman (TPO) Code) provides

sufficient protection for consumers

64 per cent of estate agents agreed that there is a need to

provide more guidance on the law to estate agents

OFT1140b | 47


48/90

52 per cent of estate agents agreed that there is a need to

provide more guidance to consumers about their rights when

buying and selling homes

52 per cent of estate agents agreed that estate agents should

provide more information to their customers on the home buyingand selling process

50 per cent of estate agents agreed that all estate agents are

aware of their legal obligations

48 per cent of estate agents agreed that there should be

financial penalties on the seller or purchaser for unnecessary

delay after a sale is agreed

45 per cent of estate agents agreed that buyers often think the

estate agent is acting on their behalf

44 per cent of estate agents agreed that given the introduction

of the Consumer Protection from Unfair Trading Regulations

2008, the Property Misdescriptions Act 1991 is no longer

needed

41 per cent of estate agents agreed that online estate agents

(estate agents that do not have a physical branch location)

compete with their branch

36 per cent of estate agents agreed that estate agents should

be obliged to disclose the level of commission/benefits received

from services offered to buyers (not just the existence)

34 per cent of estate agents agreed that individuals offering

their own home for sale (For Sale by Owner or FSBO) compete

with their branch, and

24 per cent of estate agents agreed that all estate agents

comply with their legal obligations.

OFT1140b | 48


49/90

3.57 At the end of the questionnaire estate agents were asked if they

wished to add any additional comments. The common themes that

emerged from the responses given are outlined below:

HIPs were the most common subject, being mentioned by 10

per cent of all responding estate agents. The general attitudetowards HIPs was negative, with criticism focusing on the cost

and time taken to prepare HIPs, and the perceived lack of

benefit

three per cent of estate agents stated their support for the

introduction of positive licensing

two per cent of estate agents expressed the need for an

arrangement to financially commit buyers once they had made a

successful offer, with some suggesting a bond/deposit that is

non-refundable following subsequent withdraw of the offer

one per cent of estate agents considered that enforcement of

existing legislation needs to be stronger

one per cent of estate agents noted that they were at a

competitive disadvantage to rogue estate agents that ignored

the requirement for a HIP and could therefore market properties

more quickly

one per cent of estate agents expressed the need for a minimum

qualification to be necessary in order to operate as an estate

agent, and

one per cent of estate agents put forward the view that the

present stamp duty system causes problems, particularly for

properties valued close to the thresholds.

OFT1140b | 49


50/90

ANNEXE 1: COVERING LETTER

Dear Sir or Madam

OFT Home Buying and Selling Market Study - Online Survey

As you may be aware, we are taking a comprehensive look at the UK

market for home buying and selling. You can find more information about

our Study at: www.oft.gov.uk/homes.

As part of this Study, we are inviting all UK based estate agents to

complete an online survey. Your input to this survey will inform the

outcomes of the Study and could have important implications for your

industry.

The survey is designed to be completed at branch level. We only need oneresponse per branch and estimate that it will take about 30-60 minutes to

complete. We will not identify individuals or individual businesses should

we use responses in any publication. If you do not have exact figures

please provide a best estimate. The online survey form can be found at:

www.oft.gov.uk/easurvey

Full instructions for completing the survey are provided at the start, as well

as contact details if you have any queries while completing the form. You

will be able to stop and start between questions as you wish, using the

logon details which are as follows:

Username:

Password:

The deadline for completing the survey is 5pm Monday 7 September

(although early responses would be appreciated). Thank you very much in

advance for taking part.

Yours faithfully

OFT1140b | 50


51/90

ANNEXE 2: SURVEY QUESTIONNAIRE

Welcome to the OFT Home Buying and Selling Study Estate Agency

Questionnaire The scope for the market study, along with other related

information, can be found on the home buying and selling web page on the OFTwebsite. We only require one response from each estate agency branch. We will

not identify individuals, branches or businesses should we use responses in any

publication. Our disclosure policy can be accessed below. The questionnaire

asks for some numerical information relating to: numbers of branches and

employees, property appraisals, property listings, property sales, branch profits,

fees, contract types, completion times, reasons for transaction failures, referral

fees and complaints. It may be useful to have this information to hand before

completing the survey. However, if you do not have exact figures please provide

a best estimate. There are a maximum of 56 questions but, depending on yourresponses, you may be asked fewer. We have piloted this questionnaire with

estate agents, and it should take around 30-60 minutes to complete. If you wish

to complete the survey in more than one session please press the 'stop' button.

Your progress will be saved as far as the last fully completed question, and you

will be returned to your current position in the survey when you log back in.

Please complete the questionnaire by 5pm on 7 September2009.

Thank you for taking part!

Assistance If you have any queries, please contact Darren Eade on 0207 2118534 or by e-mail at: [email protected] If you are experiencing

technical difficulties with completing the survey online please contact Gregory

Haigh on 0207 211 5886, or by e-mail at: [email protected] If Greg or

Darren are unavailable, please contact the team at:

[email protected]

OFT1140b | 51


52/90

Disclosure policy: please note that we may choose to refer to comments

received in response to this questionnaire in our report on this study. In deciding

whether to do so, we will have regard to the need for excluding from disclosure,

so far as practicable, information relating to the private affairs of an individual

whose disclosure the OFT thinks might significantly harm the individual's

interests or commercial information relating to a business which the OFT thinks,

if published, might significantly harm the legitimate business interests of that

undertaking (confidential information). If you consider that your response

contains such information, that information should be marked confidential

information and an explanation given as to why you consider it is confidential.

The Office of Fair Trading (OFT) must reserve the right to disclose any

information provided by you (including confidential information) in accordance

with sections 170 and 240 243 of the Enterprise Act 2002 where it considers

such disclosure to be appropriate. Subject to the considerations set out above,

the OFT may choose to put information provided by you to third parties, such asother Government Departments, other contributors to this study and/or

consultants engaged by them, for the purpose of facilitating the carrying out of

this study. The OFT is also bound by the Freedom of Information Act 2000 (the

FoIA). Where a person makes a request in accordance with the FoIA the OFT

may have to disclose whether it holds the information sought and the

information itself (including confidential information). The FoIA contains

exemptions (including one which may exempt confidential information) and the

OFT will not have to make those disclosures if an exemption applies. If you

consider that any information you provide may be exempt from such disclosuresyou should say so and explain why. Similarly, to the extent that information you

provide constitutes personal data under the Data Protection Act 1998, the OFT

will process such data in accordance with that act.

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Guidance for completing the questionnaire

You may like to print out this page and have it nearby as you complete the

questionnaire.

Stakeholders have told us that experience can vary substantially at a locallevel and we have therefore deliberately targeted this questionnaire at

estate agency branches, rather than Head Offices, so that we can gather

views and information on the market at a local level. Branch-level

responses will be more valuable to the study's findings and we strongly

encourage these.

Where we use the term estate agent (or EA) we mean all types of estate

agency work - whether the business is traditional high street agent, the

estate agency element of a mixed sale and letting, agents trading solely

over the internet, or the sale of homes through auction. For Scotland the

term estate agent also covers Solicitor Estate Agents.

The survey covers sales and purchases of homes in the UK and does not

include commercial properties or rentals/letting.

Please use the 'Prev' and 'Next' buttons on the survey (not your browser's

'Back' and 'Forward' buttons) to navigate, otherwise your answers may

not be stored.

If you wish to complete the survey in more than one session please press

the 'stop' button. Your progress will be saved as far as the last fully

completed question, and you will be returned to your current position in the

survey when you log back in.

If your internet connection fails during completion of the survey, the

system may require you to wait ten minutes before you can login again.

Your progress will be saved as far as the last fully completed question, and

you will be returned to your current position in the survey when you log

back in.

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About you

Please complete the following contact details

1. Your business' name:

2. Your job title:

3. How long have you been involved in estate agency (to the nearest year)?

4. Your email address:

5. Your telephone number:

6. Focusing now on the branch for which you are responding, is the branch a

franchise?

yes

no

7. What is the name of the estate agency business operating from the branch?

8. Town/city:

9. Postcode:

10. Does your branch mainly handle sales in:

England

Wales

Northern Ireland

Scotland

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11. How long has your branch been established in its current locality?

Less than one year

1 to 2 year

3 to 5 years

6 to 10 years

11 to 15 years

16 to 20 years

21 to 30 years

31 to 40 years

41 to 50 years

51 years or more

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12. How many full time equivalent employees did your branch employ on the

following three dates? (If necessary please provide estimates.)

Please enter the number:

1 April 2007

1 April 2008

1 April 2009

13. How many residential property appraisals (excluding lettings) did your

branch undertake in... (If necessary please provide estimates.)


2007 (1 Jan to 31

December)

2008 (1 Jan to 31

December)

2009 to date (1

Jan to 1 June)

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14. How many residential properties did your branch market/list in (If necessary

please provide estimates.)


2007 (1 Jan to 31December)

2008 (1 Jan to 31

December)

2009 to date (1

Jan to 1 June)

15. How many residential properties did your branch sell in... (If necessary please

provide estimates.)


2007 (1 Jan to 31

December)

2008 (1 Jan to 31

December)

2009 to date (1

Jan to 1 June)

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16. Did your branch make a profit or a loss (in relation to estate agency and

related legal work) in the following years:

Profit Loss

2007 (1 Jan to 31 December)

2008 (1 Jan to 31 December)

2009 to date (1 Jan to 1 June)

Competition with other Estate Agents

17. Over what area does your branch typically offer properties for sale?

Most properties are within 1 mile of the branch

Most properties within 2 miles



Most properties more than 10 miles distant

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18. Which of the following factors do you think are most important in attracting

home sellers to use your estate agency services rather than those of your

competitors?

Unimportant

Of little

importance

Moderately

important Important

Very

important

Competitive fee

levels

Willingness to

negotiate on fees

Property

valuations/marketappraisals

High profile internet

presence

Local knowledge of

the market

Quality of service

'One stop' shop

(that is provision of

services like HIPS,

conveyancing etc)

Number of 'for sale'

boards

Office location

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Number of sales

listings in local

papers

Number of potential

buyers registered

Local reputation

(including word of

mouth)

National reputation

Own website

Access to major

property portals

Access to the

Solicitors' Property

Centre (in Scotland)

Competency of staff

Membership of trade

association /

professional body

for example NAEA,

RICS, OEA, Law

Society of Scotland

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Entering the market

19. If you were to set up a new estate agency business starting with one

branch, which of the following would be the most substantial hurdles to

overcome in the first year?

1 small

hurdle2 3 4

5

substantial

hurdle

Finding a suitable

available location

The cost of

buying/leasing theoffice space

The cost of IT and

other office

equipment

Finding suitably

qualified staff

Staff wages

Staff training costs

Promotional costs

Establishing

reputation and

winning business

from existing local

estate agents

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Attracting sufficient

sellers

Attracting sufficient

buyers

20. Using your experience as a guide, how long after opening an estate agency

business would you expect it to be able to make a trading profit?

First year

Second year

Third year

Fourth year

Fifth year

Longer

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21. How important are the following factors when advising potential sellers

what price a property should be put on the market?

UnimportantOf little

importance

Moderately

importantImportant

Very

important

Your knowledge of

recent local sales

Your knowledge of

potential buyers

registered with you

Your knowledge of

the local area (that islocation of schools,

leisure facilities, etc)

Comparisons of

property with

recently sold similar

properties

The EnergyPerformance

Certificate rating/or

fuel bills for the

property

Experience of local

market for such

properties

Size of property (by

meters squared)

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The vendor 's opinion

on the property 's

value

Web searches for

similar properties in

the location

Extrapolation from

original purchase

price, where known

Online valuation tools

Unique or individual

selling features of the

property

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22. Please specify which online valuation tools you use and why:

23. Where you use comparisons with similar recently sold properties, how often

do you show these to prospective sellers when pitching for their business?* *As

a guide, please consider: 'Rarely' to mean in less than 25 per cent of cases, 'Sometimes' to be

in 26-50 per cent of cases, 'Often' to be in 51-75 per cent of cases and 'Very often' to be in76-100 per cent of cases.

Never

Rarely

Sometimes

Often

Very often

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24. Broadly, for what proportion of your vendors did you agree the following

types of fee in 2008 (if not applicable enter '0 ') Note: please do not enter '%' signs

Proportion of clients (%) (0 - 100)

A percentage of the final property

selling price, payable only if the

property is sold

A percentage of the original asking

price for the property, but payable only

if the property is sold

A flat fee stated in s, that does not

vary with the final property sellingprice, but is payable only if the property

is sold

A flat fee stated in s, that is payable

upfront whether or not the property is

sold

A flat fee stated in s, that is payable

upfront, with an additional fee payableonly on completion

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25. If you offered a sole-agency contract, what was your standard fee before

negotiation (that is the fee you first quoted potential clients as a percentage of

the final selling price of the property, for example 1.8 per cent), in the following

periods: N.B please do not enter '%' signs

Please enter the number (for example 1.8%)

2007 (1 Jan to 31

December) %.

2008 (1 Jan to 31

December) %.

2009 to date (1

Jan to 1 June) %.

26. Please estimate the proportion of clients that entered into a sole agency

arrangement with you that were able to successfully negotiate a fee that was

lower than your standard fee in... Note: please do not enter '%' signs

Please enter the number (for example 1.8%) (0 - 255)

2007 (1 Jan to 31

December) %

2008 (1 Jan to 31

December) %

2009 to date (1

Jan to 1 June) %

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27. Which, if any, of the following explain why it may cost more to sell a higher

valued property (for instance one valued at 500,000 in comparison to one

valued at 150,000)? Please select all that apply.

More marketing is required

The type of marketing needed is more expensive

Lower demand for higher value properties

Likely to be more viewings for higher value properties

More customer interaction is needed with sellers of higher value properties

More tailored service required

None of the above

Your services

28. In addition to estate Agency services, which of the following services do

you offer? Please select all that apply.

Residential property sale by auction

Letting/private rental/property management services (as an alternative to selling

or buying)

Buyers agency services (that is to help buyers locate, negotiate on and buy

residential property)

Commercial property sales

New development properties

Properties to buy and sell in countries outside the UK

None of the above

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29. Do you offer any of the following services to vendors who choose to sell

through you?

Built into

standard

charge

Available at

extra cost

Not available

Floor plans

Glossy brochure

Prices shown per square metre

360 degree tours online

E-mail/SMS text contact details

for sellers to contact you

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30. Do you allow your vendors to access records online for their property of:

Built into

standard

charge

Available at

extra costNot available

Promotional activity /

advertising

Interest shown by potential

buyers

Viewings arranged

Feedback from viewings

All offers made

Communications after they

have accepted an offer

31. Do you offer seller or buyers any other innovative services? If so, pleasedescribe below and explain whether they are standard or at extra cost...

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Contract Types

32. Broadly what percentage of clients sign up to the following types of agency

agreement? Note: please do not enter '%' signs

Proportion of contracts (0 - 100)

Sole selling rights

%

Sole agency %

Joint agency %

Joint sole agency%

Multiple agencies

%

33. ...and do they usually include a 'ready, willing and able purchaser' clause?

yes no not applicable

Sole selling rights

Sole agency

Joint agency

Joint sole agency

Multiple agencies

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34. Where you have a joint sole agency agreement contract, do you make

sellers aware of how commission will be shared with the other estate agent(s)?

Yes

No

N/A

35. What is the typical period of time clients are contractually bound to use your

services? (including notice period)

No minimum period

Up to four weeks

More than 4 weeks but less than 8 weeks





More than 24 weeks

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Marketing properties 36. How often do you use the following to market/sell

properties? *As a guide, please consider: 'Rarely' to mean in less than 25 per cent of cases,

'Sometimes' to be in 26-50 per cent of cases, 'Often' to be in 51-75 per cent of cases and

'Very often' to be in 76-100 per cent of cases.


For sale signs

General mailshots

Contacting own pool

of possible buyers

Open/show days forspecific homes

Local newspapers

Local general

magazine

Local property

magazine

National newspapers

National general

magazine

National property

magazine

Your own branch

internet site

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A group internet site

Property portal site(s)

Solicitors Property

Centre

Auction

37. You indicated that you make use of property portals to promote your

properties, what proportion of eventual sales do you think were initially

generated as a result of advertising through this channel?

Less than 1 per cent

1 per cent to 5 per cent











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38. Please indicate the portals that you advertise on and rate their importance:

Don 't useNot

important

Somewhat

important

Quite

important

Very

important

Rightmove

Propertyfinder

Findaproperty

Primelocation

Fish4homes

Globrix

PropertyLive

A Scottish Solicitors'

Property Centre portal

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Experience of sales process

39. For successful transactions, how long on average did it typically take from

offer being accepted to completion in the following periods... (If necessary please

provide estimates.)

1 to 4

weeks

5 to 6

weeks

7 to 8

weeks

9 to

10

weeks

11 to

12

weeks

13 to

14

weeks

15 to

16

weeks

17 to

18

weeks

19 to

20

weeks

Over

20

weeks

2007 (1

Jan to 31

Dec)

2008 (1Jan to 31

Dec)

2009 to

date (1 Jan

to 1 June)

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Documents

Estate Agents Survey Report