As an estate agent who has ‘crossed the line’ after 35 years in the industry to become a ‘hybrid’, I can honestly say that the only difference between us and the agents in the High Street is the fact that I can look out of a first-floor window rather than one on the ground floor.
Nothing has changed in the way we deal with our clients and the relationships that we strive to develop.
Why would a buyer want to walk the streets to look at photographs in a window, even on a large monitor, when they can look at multiple images, video tours and 360-degree walk-throughs on their iPad in the comfort of their own home?
These are the same clients who have given up reading their local newspaper which, ten years ago, was such a massive black hole in our marketing budget.
Something fundamental has changed in the way the public interact with estate agents, though.
They don’t generally want to talk to us, at least in the way that I would like and as early in their search as I would like.
In my experience, the majority of clients gave up on visiting agency offices some considerable time ago.
They will register with a property portal, wait for property alerts and save themselves the hassle of meeting young Justin in the corporate agency pushing their mortgage advice and conveyancing service.
Once, every applicant was a potential buyer and seller, and I would pride myself on being able to convince a client with a property to sell to allow me to arrange to value, and my conversion ratio from valuation to instruction was good!
Now we receive portal viewing requests, and the opportunity to properly qualify a client (motivation, ability, need) is very limited. The quality of the conversations that we have with potential sellers is incredibly important to gaining instructions, but now the big advertising spend of large brands means that they are getting more first calls to value.
It is now a case of being quick to respond to an initial enquiry and making the most of the opportunity to speak. A reply by email is wasted as you will never find out the objections that you need to overcome or the compromises that a client will make in order to sell or buy.
I have checked the available stock in my operating area on Rightmove today: 488 properties available with 58 being duplicates on multi-agency so, in reality, there are 430 properties for sale, which is just more than half of what was available this time last year. However, those instructions are shared between 70, yes 70, estate agency brands.
There are eight agents who are based in nearby areas, and a few more for whom residential property is not really their thing.
The big difference this year is the online agents.
Those who are active locally, and eating into market share, include Purplebricks, Bettermove, eMoov, Ewemove, Express Estate Agents, E-Zy Property, GetMeMoved, Hatched, House Network, Housesimple, Easyproperty, The Good Agent, Tepilo and Yopa, in addition to which there are a couple of local guys working from their garages.
Between them they have over 10% of the instructions.
I am not going to have a pop at the ‘property experts’ from purely online agents. I know plenty who have moved from corporate agencies and have adopted the same policy of quoting high values to gain instructions as they did at their former employers. It seems that it was what they were expected to do.
However, if the fee is paid upfront, then there is not the imperative to look for reductions later as their fee is in the bag.
I do know, however, that some of those LPEs really do understand that they need SOLD boards up to get more instructions. Even in today’s new media market, boards still breed boards.
So, do we really intend to ignore the threat?
There is a possibility – a growing one in my opinion – that at a time when every instruction is hard fought-for, when sellers are counting their pennies, when inflation is rising and incomes are not, then the appeal of low-cost agency may just be starting to win people over.
Most people are pretty clued up.
In general, they know what they expect to achieve when they sell and have researched using Mouseprice, Zoopla, Rightmove, etc.
Equally, many buyers make their offers on evidence of similar sales, just as we use comparable evidence on valuations.
I don’t really want to ‘value’ the property; what I want is the opportunity to pitch for the instruction, to sell my traditional estate agency service, albeit one without a window for the negotiators to stare out of. Everything else we do, from listing to legal completion, is in line with the service standards that I have been trained and trained others to provide over the past 35 years.
My friends say that estate agency is simple. Put a picture on the internet and rake in the money!
My job is to maximise viewings, make it as easy as possible for people to view, to find the buyer who will pay as much as possible, and not the one who will pay as little as they can get away with.
There are other changes on the horizon, set to alter my working pattern. I am just mulling over the renewal of my Money Laundering Regulations registration and the commitments I am making to ‘knowing’ my customer.
It also looks as though I, my fellow directors and shareholders will be required to register as evil estate agents with HMRC in the coming year.
Further, should I carry out risk assessments on all my properties prior to viewings in case a client slips, trips or falls down a well and I am then held responsible? And is my data protection policy all it should be?
As a youth, I had friends who worked at Comet and Jessops.
They didn’t think their trade would change.
Their customers didn’t give a damn about the survival of those stores if they could buy their cooker or camera cheaper online, and after-sales service didn’t matter until something went wrong, by which time it was too late.
Come to think of it, I also had a friend who rented out VHS video tapes!
Alan Paske joined Connells in 1983, moving to Black Horse Agencies/Bradford & Bingley in 1993. In 2004 he moved to independent agency as group general manager of an independent chain of five offices. After working abroad in the industry, he is now managing director of an Essex-based estate agency
A very accurate assessment of where our business is going, until and if the facts emerge about the number of sales that take place online are negative, and let’s face it they may not be negative, the online model will continue to expand. If they are positive then the traditional agent is going to be a niche player where the experience will be even more important. The day of the average and mediocre negotiator will come and they will not be required anymore. It is not numbers you need it is experienced sales people, the problem is that the good ones are not always very good at the paperwork and all the compliance. Streamline that side of it, keep it away from your sales staff and let them sell
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“…until and if the facts emerge about the number of sales that take place online are negative…”
I think that we need to be very clear about one simple but very significant fact here.
Orders are placed online… people buy online. Sales do not “take place” online.
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Afternnoon BeeBee
I believe what 40yearvetran08 is suggesting is their listing to completion ratios as a % being negative ie less than 50% meaning their model is based on failure.More users lose out than gain?
If it exceeds 50% more users gain than lose. That is why it is so important that these figures are correctly audited and taken from the previous years accounts.
The good news is as PB have not broadcast these figures they are less likely to be in excess of 50%?
The even better news is that either way many users have lost or are being chased for a substancial amount of money without any promoted risk warning?
Your fee payment is at risk if we do not achieve a completion. Based on figures taken from 2015/2016 audited accounts you have a **% chance of losing your money.
Surely if you charge an upfront fee your have to qualify the odds potential of losing your money?
Remember why the Government introduced the Deposit Protection Scheme for tenant protection?
How about seller protection?
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Ahhh, Mr Flowers!
I am not arguing the semantics of numbers/statistics/claims/lies – simply pointing out that, as stated, sales do not “take place online”, which is the phrase that 40yearveteran08 chose to post.
Surely you agree with that simple, straightforward and iron-strong point?
Why else do we have High Street branches?
I would suggest that the other parts of your post need looking at separately, which I will do.
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Afternoon PeeBee
Always interested in your hearing your point of view.
Hence my response to your post.
As their are certain things I would like to ask your opinion on, that are best not aired on this platform, could you call me next week?
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“…could you call me next week?”
Quite difficult to do under the circumstances I would suggest, Mr Flowers…
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Those who say estate agency is a face to face people business run the risk of stagnation or decline.
There are many businesses including insurance, banking, travel agencies and a myriad of retailers who believed that people would always want face to face contact, advice or to ‘see and feel’ the wares they bought and that ‘their business’ would therefore be almost immune from the internet.
How wrong they were.
In my opinion, the only reason why using an online only agent has lagged behind the swing to the internet is because, unlike all of the above mentioned services, selling your home is not something you do every day, week, month or year.
We are all creatures of habit, safe in the knowledge that what we have done previously worked, to one degree or another.
People didn’t automatically switch overnight to buying insurance, holidays, clothes, cameras etc etc etc on the internet rather than the high street. It took time, dipping their toe in the water, hearing from friends who had saved money, learning how to search for the best bargains, until buying on the internet became a habit.
Initially, many swore they would NEVER give their credit card details to an unknown faceless web company.
How wrong they were.
Ultimately we humans, like all animals, are wired into self preservation and survival. And saving money is a huge part of that. If we can find something that we ‘think’ can do the job as well as, or nearly as well as, for a lower price many of us will ‘give it a go’. And therein lies the reason why online agents are starting to gain market share.
A strange paradox is that for a good few years the same people who religiously felt through habit that they had to use a traditional local high street agent to sell their home were in fact increasingly searching for their new one online … and if they were interested in viewing a property they weren’t in the slightest bit interested in whether the agent was in that same area or from Timbuktu.
To reverse that paradox a big and prolonged national TV campaign was needed, not the piddly online advertising that online agents had done previously. That in itself would never ever change the selling habit or gain any significant market share.
Fast forward now to PB, Housesimple, Tepilo et al spending millions collectively and regularly on TV.
Conversely because of the previous selling/buying paradox many people quickly understand the point of this advertising and the rapid growth in particular of PB instructions should come as absolutely no surprise.
More boards, more sold signs, more people talking about selling and saving money will all contribute to an increasing change in selling habits.
Whether the likes of PB offer a comparable service to high street agents, really do save sellers money etc is another issue altogether.
Home selling habits are changing, and will do so increasingly, and we traditional agents need to adapt or some of us will die.
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What a delightfully well observed and written piece. Absolutely on the mark. Well done Mr Paske.
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“Something fundamental has changed in the way the public interact with estate agents, though. They don’t generally like to talk to us.
At least not in a way that I would like and as early in the search as I would like”
There’s the problem. And the solution. All in one.
Problem has arisen because a lot of agents have nothing interesting to say. About themselves, or their business. Instead, they prefer a manipulative sales culture that fails to inspire loyalty in potential vendors and their community, as a whole.
With regard to how early in the search, that should be immaterial. If you have a blog, for example, with subscribers that are genuinely interested in what you have to say, then you have the relationship. And ultimately, the loyalty when searches commence. There is no time-frame.
Forget T.V advertising and the like. It’s for the lazy agencies that can’t think for themselves. Every agency has the opportunity to create transparent and interesting media content. It just requires hard work.
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I totally agree. We need to use new innovative products to reach more people and engage with them. If we can do it as a ‘co-operative collective of independents’ using intelligent marketing, we will have far wider reach and greater traction.
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I’d say that the reason people don’t talk to us is because we offer far too much information up front, online. There is nothing for them to talk to us about in the early stages. They can see photos galore, 3d tours, floorplans, as well as check values, see streetview, crime figures, schools, transport links, flood risks etc etc etc. We put them in the position of a kid in a sweetshop. They have no idea that if they were properly qualified in conversation with a quality estate agent they could save themselves hours of wasted effort trawling the net.
Here’s a revolutionary idea. We all put just one photo, accommodation list and the price in the online listing. With a big ‘Call us for more information’.
And before someone says it, no I am not doing a Corbyn and trying to turn the clock back… 🙂
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i agree…why do we put prices on our property..first rule of sales is to get leads…rightmove is wasting them and by supporting purplebricks they are killing us….nice .
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Before ever thinking an idea is a good one when wanting change, ask yourself:
“Is this what the consumer wants?”
So every time you consider a change…
If it is what the consumer wants, it is a good idea.
If it makes their lives easier, it is probably a good idea.
If it makes your life easier, they don’t care.
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Observer,
Have you found an independent agent to use yet? The offer is still open to help, if you want it?
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All of the problems associated with buying and selling property don’t simply disappear because the agent is online. It’s still as fraught and frustrating as it’s ever been and for the journey to have a successful outcome it often requires intense involvement and skilful management from people that know and have met both parties. It’s not something that can be done well remotely or in cyberspace.
It’s also imperative for the agent to have a significant stake in the outcome. Without the existence of jeopardy, lots of deals will never make it over the finishing line. This is a fundamental difference to buying a book from Amazon. Agency isn’t retail, even though CW seem convinced otherwise.
The other factor that’s often overlooked is that news of bad customer service reaches more than twice as many ears as praise for a good service experience.
Seeing as around half of all instructions fail to complete, with the figure rumoured to be much higher with online agents, it won’t take long for word to start spreading that most people who use online agents end up spending a significant sum and get nothing in return.
People still love to hate estate agents, online or not, and once the disgruntled masses start chattering, it will spread like wildfire. In fact, it’s already starting and the negative reviews are gaining momentum – there’s a reason PB switched off the ability to leave comments on their FB page.
It’s also interesting to see that the national press are starting to pick up on this, with The Telegraph recently running an article questioning how successful PB really are.
In many ways, their whole commissery approach may prove to be their undoing. Condemning a model that charges for success when your alternative is to charge for failure seems more than a little suicidal to me.
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It’s also imperative for the agent to have a significant stake in the outcome. Without the existence of jeopardy, lots of deals will never make it over the finishing line.
Excellent points Shaun77.
We need a phrase to keep saying until the public start asking the same questions. Online listers what are your FACS (Fee Average per Completed Sale)?
It would be good to know for everyone the average amount for each sale they complete (total fees received from every listing divided by the number of successful completed sales).
It would also be good to know for each online lister the FACSIS (Fee Average per Completed Sale including Investment Subsidy).
Beats EBIDTA anyday in my mind!
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We can also add in CSAR (Completed Sale to Advertised Ratio)
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An exceptional article and comments.
Are Purplebricks rapidly growing because their new TV adverts may be running rings round fair advertising standards?
Should agents complain to the ASA about marketing tactics?
Do PB’s most recent adverts give the impression that their service is the same as traditional estate agents and are free?
PB normally use every opportunity to promote their £849 fee. By not equally promoting this is the perceived ‘commisary’ message no commission ie free?
Could this be why these adverts have been so successful?
How about equally promoting your £849 upfront fixed fee is at risk if PB do not find a buyer who completes?
How about equally promoting the extra cost of your viewing service?
Unless any concerned agents make a stand and fight for a fair representation of what an upfront fee entails you may lose more and more business unfairly?
Should you now immediately first complain to PB in your 100’s?
A plan is better than no plan. Winston Churchill
Come on Mr S as leader of both OTM and AM you could use this to rally the troops if you can be bothered?
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When was the last time Mr S said anything or OTM /AM on PIE. Now is the time, surely?
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“I see dead people.”
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Interesting article which may well be totally relevant to the area where Mr Paske operates, but certainly not so in others. And, with respect, its’ ‘relevance’ may be more one of acceptance/capitulation to what could happen – reactive rather than proactive move to force change – although it will no doubt be argued the latter be the case and only time will tell if their ‘move’ from High Street prominence to first-floor obscurity was the right or wrong thing to do. I’ll be watching with interest.
I would have to say look up Agents in Chelmsford on Zoopla. Mr Paske’s company has one of the smallest property registers, yet charge far less than those who have multiple times more listings on their books. A clear sign in my mind at least that ‘cheap’ isn’t always the option everyone wants, I would suggest.
I do actually agree with some of what he says – it must be our shared BHA background. But because of that and the degree of length he has gone to trying to justify his reasons for coming off the High Street, it wouldn’t take much to completely re-work the article, with minimal change to the wording, to put forward a ‘traditional’ Agent’s response.
In fact, rather like Eric Morecambe’s ivory-tinkling prowess, he’s saying all the right words – just not in the right order.
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Dropping Stock levels, unfairly (advertised) competition, fee pressures, usual infighting and the great unknown of where the industry is heading. Good luck to those trying to make things happen in these challenging times.
I really cant see how this is going to pan out over the next 5-10 years but it wouldnt surprise me to see contraction on unprecedented levels. The thoughtful posts above point to just that.
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I think there is every chance a new style model will evolve based around the independent, but incorporating next generation customer engagement. If I could encompass it in one word it would be ‘communication’.
Any other suggestions for the future in one word?
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Transparency?
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Affinity.
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Quote: In my experience, the majority of clients gave up on visiting agency offices some considerable time ago.
Disagree. Lost count of the number of reasons people come through our door and just about every concern they had could not be satisfied on-line. Yes web portals have made consumers lazy and not as many walk-in today, but they do. Don’t forget portals are nothing more than a reactive marketing digital newspaper. Your job hasn’t changed. I wonder how the locals consider you, compared to the competition … often your image of business presentation, is another factor to success with the public, just like newspapers never sold properties, they sold your brand and awareness. Far too much information of a property is posted on line. That is one of the problems.
As to on-liners only. Take away the TV and no-one would give them another look, actually if you look at their stock by area, far too much worrying is done.
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