NMa: NVM regulation adversely affects consumers
The Dutch Association of Estate Agents (NVM) will refrain from incorporating new requirements into professionally-led regulation following intervention by the Netherlands Competition Authority (NMa). The Authority concluded after an initial investigation that the rules may prove harmful to competition. 'Implementation of the new rules would lead to an increase in costs for estate agents working via the Internet', comments Pieter Kalbfleisch, Chairman of the Board with the NMa. The NVM has indicated that it is working on an alternative plan to fulfil its quality objectives. The NMa welcomes every alternative plan not hindering the development of competition in the estate agent market.
During a meeting of the Member's Council in June 2007, the NVM decided that estate agents, who act as intermediary negotiators for buyers and sellers, should personally view a property at least once. Consequently, an estate agent cannot entirely leave the inspection of a property to another qualified NVM-estate agent. Kalbfleisch: 'Meanwhile, current developments show that throughout the Netherlands estate agents increasingly provide their services online. The novel requirement proposed by the NVM would mean that an estate agent buying or selling a house in Groningen, while operating from Zoetermeer, is under the obligation to travel to Groningen himself. That would mean a significant cost increase for services provided. Another requirement set out that an estate agent would need to be present personally at the signing of the contract of sale and initial the contract of sale upon signing the property transfer deed. 'Some buyers or sellers only want to engage the services of an estate agent for property taxation and negotiation purposes. Bundling estate agent services restricts consumer choice', comments Kalbfleisch.
New initiatives, such as Makelaarsland, have accelerated competition in the estate agent market, according to the NMa. Parties operate nation-wide and are partly online, as a result of which they can reduce tariffs for (online) estate agent services. This creates price competition with NVM-estate agents, who are by tradition locally and regionally based. The NMa is alert to any curtailing of these developments on the basis of NVM professional regulation and closely monitors the conduct of the branch organisation and its members. Otherwise, the NMa positively rates the fact that non-NVM allied estate agents have now begun putting houses on offer via the NVM website 'Funda'.