Any comparison of the UK relocation industry with North America's must focus on the differences in the two countries' real estate agency systems. At first glance, they may appear similar. Certainly, we both use similar jargon, but, once you roll-up your sleeves and get into the nitty gritty of UK property transactions, you soon find yourself operating in a completely different world. So, let's take a closer look at how UK real estate agency works.

Real estate offices are called "estate agencies". They mostly trade from high street, store-like, retail premises, largely relying on passers-by for their prospects.

No Training, Qualifications or Licensing Requirements
There is no licensing nor any requirement for training or qualifications. Anyone can set up an estate agency business overnight.

Estate agencies are staffed by salaried employees. Whilst there is usually some commission or performance-based element in their compensation, commission to the individual plays nothing like the same role as it does in a North American real estate office.

The employees, referred to as "Negotiators", are not self-employed, independent contractors. Negotiators are on the payroll. Their business expenses are paid entirely by the Employer. Mostly, they are between 20 and 30 years of age. The major attraction of the job is the fully expensed company car. This, for many of these youngsters, is the most important part of their compensation package!
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No Multiple Listing Service
Another major difference is the absence of any MLS. Estate agencies do not cooperate with one another (except, to a limited extent, in downtown London where agencies work together on an informal basis). There is no differentiation between the "listing" and "selling" sides of a transaction. The Listing ("instruction") is handled by the whole estate agency firm. Similarly, home seekers deal with the firm as a whole. There is nothing like the same emphasis on the individual salesperson as there is in the North American system where home seekers are looked after by one independent contractor effectively running their own business within a business. In the UK, walking into an estate agency is much more like walking into any retail store. You get served by whoever's available at the time whenever you walk-in or call.
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Free for All
Valiant attempts have been made over the years to start up local MLS-type systems. They always fail, due chiefly to the wholly uncommitted nature of the homeowner/estate agency relationship, as well as the lack of any overall regulation of the UK estate agency industry. The reason the relationship between homeowner and estate agency lacks commitment is because homeowners in most areas can "instruct" (list with) an unlimited number of estate agents at the same time on what is called a "multiple" (open) agency basis. Only the estate agency which introduces the buyer (or tenant) earns the commission. Homeowners often start the marketing of their home by instructing only one estate agency on what is called a Sole Agency basis, but these can usually be converted by the homeowner anytime to a multiple basis simply by instructing other estate agencies.

Other agencies are free to solicit their competitors' instructions (listings) by making direct approaches to the homeowners. Many systematically canvass homes that are listed with competitors. Indeed, when a new estate agency opens its doors, that is their fastest way to "stock-up".

Under these free for all conditions, you can easily see why estate agencies would be reluctant to get involved with any MLS-type facility. Of course, this puts home seekers to the trouble of having to visit numerous estate agencies if they want to gain access to all available homes. The other side of the coin is that homeowners may have to instruct numerous estate agencies to reach the majority of potential home seekers currently in the market for a home like theirs.

This all produces an inefficient, "hit and miss" cycle which is self-perpetuating. Add to that, the low level of compensation available to estate agency owners and their staff and you can easily see why the UK estate agency industry is found so wanting by North Americans who are accustomed to a good, comprehensive service from properly trained and regulated professionals.

These differences in the two countries' real estate industries should not be underestimated.

They have led to many Transferees from your side of the pond (whose Employers thought they'd be saving a few bucks by not providing professional home finding assistance) getting into serious difficulties. (Guess who picked-up the tab!?)

And, on the home sale side, imagine the number of North American Corporations who thought an offer was an Offer; or that UK estate agent's opinion of value was remotely equivalent to one of your Broker Opinions or appraisals. Based on a false impressions, employees have made equity advances, only to wind-up with awesome capital losses which could so easily have been avoided.

Indeed, these differences are so significant that they have prevented any of the major North American real estate franchises, in spite of their tremendous resources, from establishing any kind of credible presence in the UK, potentially the most lucrative of all European markets for them, where there is the big advantage of a common language. Yet these huge organisations have established themselves successfully in countries where you'd think the obstacles far greater - Japan, France, Spain, the Far East, etc.
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Every Cloud has a Silver Lining
All this, of course, led to Saunders 1865's decision to specialize in helping North American Corporations transfer Employees to/from and within Europe.
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Home finding Assistance
The biggest differences are found in the area of home finding assistance, where our own personnel carry out most of the functions which, under your system, would be carried out by real estate agents. Over here, the relocation company's role is very much more "hands on" from start to finish. After the assigned home finding consultant has consulted with the Transferee and Spouse our Research Team kick-in. Suitable homes are sourced and tested against the Brief.

A shortlist is developed for the Transferee and Spouse to make their home-hunting time as productive for them as possible.

Because the preparation has all been done up front, a great deal can be accomplished in just a few Tour days. The home and school can be rapidly sorted out, removing the necessity for an elongated stay in expensive temporary accommodation.
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Beware of Estate Agents in Disguise
Estate agencies act strictly for homeowners and the system is very much one of caveat emptor - let the buyer beware. There is nothing like the same requirement in the UK for disclosure of defects in a property or its Title.

So, who looks out for you and your Transferee? In the UK system, only an independent relocation firm can fully protect your interests and those of your Transferee. Be on your guard against estate agents masquerading as "free" relocation/homefinding services. They represent homeowners, never you or your Transferees, and the true cost to you could be substantial.
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Homesale Assistance
Again, with homesales, the UK relocation firm's involvement is, of necessity, more "hands on". In order to access the homebuyer population, as I have already mentioned, it may be necessary to instruct (list with) numerous estate agencies. Keeping all of them motivated in these circumstances is a major challenge. They are used to working on the basis "if you throw enough mud against the wall some will stick." We do not allow our clients' homes to be dealt with on that basis.

Once an "offer", (which is not really an Offer in the North American sense) has been received, a big challenge is to keep the property on the market until a contract (the first and only time the agreement is put in writing) is in place. It is very much during this high risk period, between proposal and contract, that the infamous gazumping and gazundering can occur. Those issues warrant much more discussion than my space here allows, but understand that it is during this period that you must be prepared for the real negotiating to take place.
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Concluding Observation
It is vital that you, or your UK representative, are completely familiar with these differences between the jurisdictions, so that both Employer and Employee can avoid the major pitfalls. Forewarned is forearmed.
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Contact the author of this article:
Christine Hall, GMS
Senior Vice President
Saunders 1865 - Global Relocation Specialists
Email: christine.hall@saunders1865.com
Direct Line (0) 20 7590 2702 - Fax (0) 20 7584 4230