Room for Improvement in the Estate Agency Market
26. oktober 2012
Consumers experience low transparency, poor possibilities for complaints and their trust in estate agents is low.
In spite of active research before choosing real estate agent, many consumers are unsure whether they chose the estate agent which best fulfilled their needs. Only for 30 percent of consumers did the chosen agent live up to expectations.
Consumers only use estate agents a few times in their life. Hence they don’t have a lot of experience with the market. Although the estate agent’s salary might seem a small amount of money compared to the price of the property, it usually constitutes a large sum compared to the household budget. Consumers should therefore try to get the best deal.
The Danish Competition and Consumer Authority has carried out an analysis of consumer conditions in the estate agency market. The analysis shows that consumers are actively trying to obtain the best deal in the market. Eighty-six per cent of consumers compare offers from 2 or more estate agents and about every second consumer negotiates the fee. Eighty-nine per cent of those who negotiate achieve a lower fee.
But consumers find it difficult to compare offers from different estate agents and only 58 percent think they chose the best offer.
Consumer’s trust in estate agents is low compared to other markets. Consumers are especially reserved regarding the estate agents’ marketing and their propensity to abide to consumer protection rules.
Consumers also doubt whether estate agents will handle complaints in a proper manner, and the possibilities of complaining to a third party are ranked lower than in most other markets. This indicates that the consumers are not aware of the existing possibilities for complaining.
On the basis of the analysis The Danish Competition and Consumer Authority gives recommendations to both consumers and the estate agent industry on how to improve consumer conditions. It is also recommended that the regulation of the market is revised.
Summary of the analysis "Consumer conditions in the estate agency market"
For further information please contact Head of Communication Hanne Arentoft at + 45 41 71 50 98.