Set up in 1887 with an eye to encourage best practice by its members, The BHEAA, whilst acknowledging that there is nothing illegal in the process, still has concerns relating to the tactic used by some estate agents of sale by tender.

Jason Brand, president of the Brighton and Hove Estate Agents Association (BHEAA), and director at Brand Vaughan explains.

Sale by tender is a relatively new phenomenon in the UK, and means that an agent would ask for a flat administration fee of, say, £150 plus VAT from a person selling their house.

This would not include all marketing, but the idea is that this would encourage people to put their homes on the market and not inconvenience them too greatly by holding a series of open days.

People wanting to buy that kind of property would all come within a specified time frame on certain days, and enter private, sealed bids of the price that they are willing to pay.

The issue for the BHEAA, is three-fold. The first is that on top of the vendor’s fee, the successful buyer pays typically 2% plus VAT of the price they have bid for the property. Figures in the National press demonstrate how, on a property worth £200,000, the buyer would pay £4,800 plus VAT to the agent.

Over the past year in Brighton, flats have sold for an average price of £221,349, under the 3% stamp duty threshold, terraced properties sold at an average price of £345,632 and semi-detached homes at £353,411. (Figures from Rightmove on May 18, 2014).

So the BHEAA has issues with this system: Buyers are now being asked by these agents for an “introduction fee” of at least £6,900 – plus VAT – for a property of £345,000 on top of a deposit, legal fees, moving costs and stamp duty. Sellers are also paying the agent, leading to accusations of raking in double fees.

Secondly, as Christopher Hamer, the Property Ombudsman, says: “Sale by tender raises the issue of a legal conflict of interest.

“This is not the same as being illegal, but it is a serious ethical question which must be addressed. The difficulty is that the seller enters an agreement with the agent.

“The agent then seeks a buyer, who then enters an agreement with the agent. Who then, is the agent acting for?”

Thirdly, what happens if a buyer doesn’t want to enter a separate agreement with the agent?

Do they refuse to let them offer on the property, losing the vendor their sale? It would be difficult for a buyer to approach another agent as none would feel that it was ethical to step into that scenario, and it would also potentially expose the seller to two sets of agents fees.

Another consideration is European competition directives – a person wanting to sell a property can shop around – this tender system denies that opportunity to buyers.

At Brand Vaughan we know all of our buyers and sellers and consider each and every property to be unique, so sale by tender would not suit us or our customers.

We also have concerns over the buyers paying the 2% plus vat will simply take this figure off their offer so the owners would be financially worse off.

The housing market, has, however, ever-changing demands, and it is right to bring innovative ideas to the marketplace.

The BHEAA, however, believe that it is important to constantly review our response, and ensure that it is ethical and not open to abuse, and welcome the intervention of the Department for Business who are monitoring the situation.

We would recommend anyone thinking of moving to use the services of a BHEAA member more than ever before, you can find a list of our members at