Open controversy in real estate agent land. The announced new working method of the NVM real estate agents’ association is causing disagreement between the two national real estate agents’ associations, and with the Eigen Huis Vereniging (VEH).
The protocol, which was presented this week by the NVM as the major step forward to make bidding on a home fairer, is actually three steps backwards, according to the Eigen Huis Association.
The VEH, which represents the interests of (prospective) homeowners, even calls on its members to no longer do business with NVM real estate agents. Vastgoed Nederland, the much smaller trade organization of real estate agents, also disapproves of the NVM protocol and speaks of “false security” for buyers.
What is going on here, and how should we proceed?
1Why a bidding protocol?
In recent years, the working methods of real estate agents have been a topic of discussion more often, says Femke Dijkstra, Housing team manager at Vereniging Eigen Huis. On birthdays and on Saturday mornings along the sports field, but also in the VEH mailbox.
“Members emailed us with suspicions of handshakes and mutual agreements that brokers call each other before the deadline to pass on the amount of bids. Buyers are left with the feeling that they are being cheated and forced to bid higher.” Moreover, according to Dijkstra, it is not only buyers, but also sellers who are reporting. “They have the idea that real estate agents are trying to get them to award the house to someone they know. Or to someone whose house they can also sell – a kind of acquisition during the sales procedure, so to speak.”
In 2021, the Homeowners Association created a hotline where homeowners could tell their story. Many complaints were about the sale where an ‘open registration’ was chosen. With this form of sale, there is a deadline and a digital mailbox is set up where interested parties can submit a bid. In contrast to a closed registration, only selling agents can open the mailbox in the meantime to see what is inside. In theory, this could be abused.
The reports are in many cases anecdotal and there is little evidence of foul play, Dijkstra acknowledges. “That cannot be otherwise, because little is recorded in that phase.” Moreover: openly complaining about an estate agent is considered unwise. “You never know when you will need a real estate agent again, and it is an industry where they all know each other.”
According to the Eigen Huis Association, this is a larger, principled point: with an open registration, only the sales agent has the key to the mailbox. “And that gives them far too great an information position compared to the other parties.”
2What is in the NVM protocol?
The NVM proposes four sales methods in its own protocol. In addition to one-on-one negotiations and sales via auction, there are closed and therefore also contested open registrations.
Actually, there should have been a shared protocol for the entire brokerage sector. The NVM negotiated for two years with the trade association VBO (now merged into Vastgoed Nederland) and the Eigen Huis Vereniging about new rules.
Following the reporting point of the Eigen Huis Association, they then sat down to draw up an improvement plan. During the consultation, the idea arose that ‘open registration’ as a sales method should be abolished. If everyone was only allowed to see what was in the mailbox after the deadline, that was the idea of VEH and Vastgoed Nederland, then the bidding process would become more transparent. This creates an equal information position, and with the help of a bidding log, all bidders could subsequently see what the winning bid was.
But in March this year, the largest real estate agency organization, the NVM, withdrew from consultations with the industry and the VEH. The NVM presented their own interpretation of the agreements, the protocol, at the end of last week – it applies to all NVM members as of February 1.
For the most part, the NVM protocol contains the same agreements as those that were on the table in the consultation with the Vereniging Eigen Huis en Vastgoed Nederland. For example, the NVM requires the use of the digital ‘bidding logbook’, which provides all bidders with insight once the resolutive conditions of the sale have expired. This way you can see whether your bid was close to the winning bid.
3Why does the NVM maintain open registration?
Despite all the concerns about open registration, giving up that sales method was not an option for the NVM. “A majority of our brokers indicate that they want to keep that form. Because sellers, our customers, want this,” said a spokesperson for the NVM. “As a seller, you want to know during the sales process whether there have already been bids and how high they are. If it turns out that there are too few, you can then decide to apply a different sales strategy.”
According to the NVM spokesperson, discontinuing open registration would not prevent another problem: bids still coming in after the deadline that change everything – which can give prospective buyers the feeling that they have been cheated. “That can always happen, and you cannot prevent that with a bidding log. After all, a purchase is only final once both parties have signed.”
In addition, the spokesperson points out that 15 percent of real estate agents are not affiliated with a trade organization. “If you were to agree this way, this rule would not apply to them and they would benefit from it. You would then have to make it national policy.”
4What now?
The NVM, to which more than half of all brokers in the Netherlands are affiliated, made its protocol and the online bid logbook software publicly accessible and encourages the entire brokerage industry to commit to it.
And with this, the NVM presents the rest of the sector with a fait accompli, says Femke Dijkstra of the Eigen Huis Association. “We would like to see NVM still conform to the minimum requirements that have been agreed across the sector. Consumers now seem to have come to terms with the following: ‘anyone who does not follow these rules does not participate in the game’. And as far as we are concerned, this must come to an end.”
What offers food for thought in the last days of the year is that self-regulation in the real estate sector has apparently failed. There are now two protocols: that of the NVM, and that of Vastgoed Nederland together with the Vereniging Eigen Huis. This spring, outgoing Minister Mona Keijzer (Public Housing, BBB) expressed her disappointment about the failure of the talks and stated in a letter to Parliament that she was in favor of one uniform working method.
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