First day marketing furore
As part of our series from industry leaders, Christopher Lacy shares his frustrations about first day marketing, and explains why he thinks it will compromise standards across the agency market.
When Margaret Beckett was appointed Housing Minister in October, there was hope that her experience might help her understand the significance of first day marketing to the house buying and selling process.
But sadly this hope was misplaced, since she has decided that the first day marketing provision, which has allowed agents to start marketing properties so long as a Home Information Pack has been ordered, has to end on April 5.
It is an unfortunate decision; the last thing the property market needs right now is a further impediment. It would have been possible to introduce the new Property Information Questionnaire on April 6, without having to rescind the first day marketing provision.
Regardless of whether or not agents support HIPs, they need to significantly change their approach to handling properties on behalf of vendor clients.
From April 6, agents must have a HIP in place, not just an order, to be able to start marketing a property. It means that they will no longer be able to contact hot buyers about new instructions, to progress a sale for their vendor clients.
This puts good agents in a difficult position, because they should have in mind two or three hot buyers who they can contact for early viewings when they first visit a property to advise a vendor client.
Of course, in many cases the removal of the provision may not present a problem, since the right approach for many vendors may be to first prepare a well-structured marketing campaign and let all potential buyers know about the properties at the same time.
But there will be many situations where the removal of the provision will be detrimental to the interests of both vendors and potential buyers.
There are many vendors, particularly in these difficult times, for whom it is crucial that agents generate interest in their homes as quickly as possible. The threat of redundancy may be looming, with uncertainty surrounding the likelihood of them being able to pay their next mortgage instalment, so one can imagine their reaction when their agent tells them that they cannot provide details of their property to any hot buyers until a HIP is in place, which could take as long as a week.
Equally, one can imagine how impressed a prospective buyer is likely to be - particularly one trying to relocate from one end of the country to the other - if an agent tells them that they have just been instructed on something suitable, but are unable to tell them anything about it until a HIP is in place. It is ridiculous to expect buyers to inconvenience themselves to view a property, particularly for the sake of futile regulations.
Agents are going to be under great pressure to tip off buyers, to enable them to at least view the exterior of a property that is about to be put up for sale as soon as possible. That said, it is debatable whether this act should be considered as ‘tipping off' and not simply a case of agents fulfilling their duty of care to clients.
The Association of Home Information Pack Providers insists that such notification is acceptable, and that it does not constitute a breach of the HIP Regulations, though some lawyers disagree. There needs to be some very clear guidance for agency, to ensure that the new regulations are fully understood.
HIP Regulations fly in the face of what good agency practice is all about for consumers - matching hot buyers to suitable and available properties as swiftly and as efficiently as possible, to provide the best service to vendor clients
So, what happens on April 6? How can agents continue to do this, in their efforts to provide a good service to both parties, without risking a breach of the law? Who is confident that the agent on their front desk will refrain from telling a buyer about a property coming onto the market when there is the risk of the buyer walking into the agency next door and closing the deal with them instead? A motivated agent is going to be sorely tempted to inform the buyer, and what are the chances of them actually getting caught? Neither the client nor the buyer is likely to object, and how could the enforcement authorities find out, given their lack of resources?
There are many chancers in agency and, worryingly, there could be many more after April 6. From our experience in Scotland where full Home Reports are already required before any marketing of a property can be done, we hear anecdotally that many agents are quietly notifying buyers of properties immediately after being instructed. And I fear a similar trend emerging across the rest of the UK from April 6.
So, ironically, by rescinding the first day marketing provision the Government is not only unnecessarily disadvantaging consumers, but also risking the whole concept of HIPs being dragged into further disrepute when they discover some agents flouting the regulations.
Misunderstanding has permeated the HIPs market since its birth, largely because the Government has neglected to listen to agency's constructive criticism about the nature of the packs, and first day marketing is the disastrous consequence of this failure.
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