Franchise firm drops tie-in periods from its contracts

| Rosalind Renshaw

Franchise chain EweMove has dropped tie-in periods from its contracts with sellers.

The firm’s co-founder Glenn Ackroyd said: “If any seller is not happy with our service, for whatever reason, they can leave us at any time and we will not charge them a single penny.

“House sellers take on a big risk when they appoint an estate agent. If they feel let down by poor service, or don’t succeed in selling their home, they can be left feeling trapped and frustrated, locked into long-term contracts.

“Worse still, many agreements have financial penalties restricting vendors from moving on to another agent.

“In an era of review websites and social media, the consumer is king.

“It’s time to take a stand. Because we are confident in our ability to provide our customers with a service that helps them get the best price in the timeframe they want, we should not hold them against their will if we fail to deliver on our commitment.”

Ackroyd told Eye that the “no tie-in” clause was actually introduced as part of the appraisal pitch a year ago.

He said: “Our franchisees loved it because it helped boost their appraisal conversions significantly.

“We also meet with our franchisees and it was suggested by them at a consultation group meeting earlier in the year. We then discussed it with the network and there was unanimous support, because they’d seen how well received it was during appraisals.

“It’s all about removing risk. Customers don’t like the idea that the agent may be rubbish. We’re prepared to accept that if we do a lousy job, we deserve to lose the business.

“The original idea came from the US – it’s worked well there for years.

“We are part of a US Real Estate Mastermind programme and we flew out to a realtor convention and saw how they used it and decided it was right for the UK market too.”

EweMove has also signed up to review site Trust Pilot.

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13 Comments

  1. livingproperty
    June 30, 2015 at 07:45

    That’s how our business was formed and was ran for just over a year – no tie-in periods in contracts to give the consumer more choice. We’ve had to drop it now, as there are too many agents that have stupidly long tie-in periods in our area (20-30 weeks some of them) that we’re not ‘competing’. We also found that most people don’t really care about tie-in periods in contracts until they come to switch agent, which most can’t be bothered to do because they see it as ‘hassle’.

    All I’m saying is… It’s definitely not a new concept in the UK and EweMove aren’t the first to do it.

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    1. GlennAckroyd
      June 30, 2015 at 08:52

      Hi – I’ve seen one other agent do this, but it was a promotional offer. And yes, it does open you up to the ‘risk’ of being preyed on by other agents. And a small % of customers will go as a result. However, what we’ve seen is that is more than outweighed by the additional customers we get. Customers don’t like risk. When on holiday, you’ll pay for bottled water, rather than drink the free local water. If you can remove risk, it creates more trust.

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  2. smile please
    June 30, 2015 at 08:31

    Tie in periods are a myth. They are just there to scare the vendor to stay with you. Even the big corporate agents do not take vendors to court for dropping them. Not worth the time money or bad publicity.

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    1. GlennAckroyd
      June 30, 2015 at 08:55

      I agree that pretty much every agent does not enforce them – but the reality in the minds of vendors is that they are trapped and they do not want to take the risk of being sued or dual charged. So they stay, despite wanting to leave.

      And this penalises vast majority of good agents, who value correctly, and deliver on their promises. So the good agents get tarred with the bad.

      If they were a myth, why put them in place? The only reason is to use it as leverage against vendors.

      I know it’s a scary move, but if agents did this en-masse, it would go a long way to changing the perception of the industry.

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  3. Paul H
    June 30, 2015 at 10:05

    So just to confirm that if a vendor instructs Ewemove, but wants to leave, they can do so at any time and will not be charged one penny, no upfront costs, no marketing fee etc?

    What happens if after 20 weeks Ewemove are disinstructed, again no fee payable to Ewemove?

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    1. GlennAckroyd
      June 30, 2015 at 12:00

      Hi Paul,

      Yes, that’s correct – no catches. You can check out the terms at http://www.happysale.co.uk

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      1. Paul H
        June 30, 2015 at 12:44

        Thanks for the reply Glenn. So basically your offering ‘no sale no fee’, bit like the rest of us. It appears that your breaking the norm of an online agent, well done if you can make it work. Is your commission based on a percentage or is it fixed?

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        1. GlennAckroyd
          June 30, 2015 at 21:53

          Hi Paul, we’ve always worked on a ‘no-sale, no fee’ basis. And whilst most of our Branch Directors, don’t have high street offices, they do live and operate locally. And we’re opening more and more offices as our franchisees businesses expand – We even have one in Sandbanks.

          As for fees, our franchisees can set their pricing based upon the local market, but most go for the traditional 1.5% (inc VAT!), no-sale, no fee approach.

          We have never been a cheap, ‘pay up front’ merchant. Our franchisees are brainwashed – compete on service, not on price!

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  4. EAMD
    June 30, 2015 at 12:40

    Hearnes in Ferndown, Dorset set up in 1996 with no tie ins and it certainly hasn’t done them any harm. Still operate the same way today. Client is king.

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    1. GlennAckroyd
      June 30, 2015 at 14:00

      Wow, I didn’t know that. They should be applauded.

      With letting agents fees now been displayed, the requirement to show VAT inclusive fees, the next logical step is the display of Estate Agency fees.

      Low cost online agents do this, but they often require pay up front, and you lose out if they don’t sell. I think ultimately, if all agents went to ‘no-tie ins’ it would do so much to give customers confidence.

      There’s a long way to go, but nobody has died by display Vat Inc, or letting fees, so over time, I think more agents will do this.

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      1. GlennAckroyd
        June 30, 2015 at 14:03

        Just looked at Hernes website and I cannot see any reference to the ‘no-tie ins’ – I’d be making a big song and dance myself, because it is a great USP

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  5. Woodentop
    June 30, 2015 at 22:01

    Tie-in periods are their to stop vendors. I can remember the OFT (as it was) some years ago looking to ban them under competition and unfair contract terms but it seemed to slide under the carpet. I have yet to find any agent who does one, tell vendors they have one and hope they don’t spot it in the small print. When they do get challenged they come up with all the excuses imaginable but never able to counter the argument with agents who do not have them. We don’t have one, we don’t board knock but all our competitors in town do. It is extremely rare for a vendor to leave us but we get an awful lot from them sooner or later. There is case law which actually make it difficult for them to charge a fee if they didn’t introduce the buyer after being dis-instructed but that’s another story.

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  6. Ewemover45
    July 21, 2015 at 13:20

    Where I live tie ins are not myth.  I haven’t experienced one agent where i’m based not using the tie in.  i’ve just received an instruction on a retirement property where its apparent there have been no viewers in 5 months – although i know this is a niche market the vendors are not happy with the agent and have thus instructed me.  They were told no problems, but a day later rung back to say they require a written notification and will hold them to 14 days notice period.  And the point of it is what?  It just upsets the vendor more, they will then not have anything particularly positive to say about that agent.  It beggars belief. Anyway it takes a bit of pressure of me and i market the property 1st August.  I’ve had many agents telling customers they have to submit their 4 weeks notice before they are free to advertise elsewhere.  It seems the most common and even contracts are creeping up again after a lot of agents started to become more sensible.  I’m still witnessing 16 & 20 week contracts as common practice with many agents.

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