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So, it’s official. Mr Justice Mann has ruled that the Foxtons contract, confirming the terms of engagement between themselves and their Landlord clients, was not sufficiently transparent.
Specifically he referred to the fact that their fee-charging structure was not displayed or described adequately or prominently enough in their literature which leaves us all (agents) wondering how we should in future ensure that our clients fully understand the financial commitment they are making when they appoint an agent to represent them. Seemingly writing it down is not enough; the jargon has to be plain and simple and prominently displayed. At least that’s how I interpret it.

It is easier for lawyers and accountants. They simply quote an hourly rate in their letter of engagement and then get out a stopwatch to record the number of hours spent on their client's work. We (their clients) then have to accept that their time spent has been accurately recorded and reported on their bill, and write out the cheque. This raises the question; if the system of paying a supplier of professional services on the basis of the time he spends on the job is good enough for the legal boys and the bean counters, then should estate agents perhaps employ the same method?

The answer seems to lie in the accepted notion that an estate agent hasn’t earned his money until he has succeeded, and his measure of success is perceived to be the conclusion of the sale or letting of a property. Seemingly no account is taken of the countless hours spent on promoting and showing properties which are not sold or let. And that is the majority.

I have yet to be invited by a client to submit an account for time spent in promoting the sale of a property which that same client has decided, at the last minute, not to sell or let. Or has, perhaps, decided to sell via another agency.

For as long as I can remember much stock, in all walks of business life, has rightly been placed upon the question of fairness, so perhaps we should now be asking ourselves whether the present arrangement for the payment of agent’s fees is indeed fair (adequate reward for the work done) to the agent, and perhaps this is something which The Office of Fair Trading should now take a look at from both points of view.

The fees charged by estate agents in the UK for selling a house are among the lowest in the world. The top rate in Britain is usually no higher than 3%. In the USA the going rate is 6% and there they operate a system which all but ensures that the appointed agent is likely to earn something for his troubles, whether or not he is the agent who introduces the buyer. There is recognition in their system that the agent who brings the property to the market has worked on it and should be rewarded.

Even the UK government takes a larger cut (up to 4% on Stamp Duty) than the British estate agent. And they do absolutely nothing to ‘earn’ this money.

Thanks to journalists, estate agents are, by and large, held in low esteem by the public. Down at the bottom in the popularity stakes alongside second-hand car salesmen, politicians and, of course, journalists! Yet it is rarely the estate agent who is responsible for the evils for which he is slated.

Take gazumping for example. The agent is bound, both morally and legally, to report to his client all offers received, and this is as it should be. Yet when push comes to shove it isn’t the agent who decides whether or not to switch from one potential buyer to another when a higher bid is received. It is the seller. And, as he trousers the money, he gets off scot-free in the blame game.