We’ve often heard on social media that the problem with the sourcing sector is that it’s “…not regulated…”
Property Sourcing IS legal when done right
In a nutshell, Property Sourcing is legal and professional when you follow the correct procedures. As sourcing agents we are considered to carry out ‘estate agency work’ and as such are defined by Section 1 of The Estate Agents Act 1979.
Governing Supervisors are now aware of Sourcers
The issue we’ve faced previously is that our sector supervisors such as The Information Commissioners (ICO), Redress Schemes, HMRC and National Trading Standards have been unaware that sourcing agents existed. This has resulted in ‘policing’ of the sector being non-existent – however, that is all changing!
There are approximately 14 pieces of Regulation and Legislation that govern our sector. To operate ‘Legally’ as a property sourcer you MUST have a working knowledge of what they are and how they affect how you operate every day.
So to be clear, property sourcing is legal when done professionally and ethically. Sadly, contrary to what is often taught on sourcing and deal packaging courses in the UK at this time, having some insurance and registrations does NOT make a compliant sourcer. Operating legally goes much deeper than the business set up.
If you want to operate a fully compliant and professional sourcing business, not only does your business have to be set up legally but you MUST also be aware of and follow the necessary procedures to meet minimum standards required.
Property sourcing can be a great way to build a cash pot however, day to day operating of a sourcing business is time consuming, costs money to run and is not as easy as some people would have you believe!
If you’re looking to start a sourcing business or unsure of the costs involved, make sure to check out our handy guide here. We also have the NAPSA checklist which follows our sector’s Code of Practice to give you an idea of where there may be gaps for you to look at.