Back in 2015, newspapers covered the story of easyProperty’s launch with headlines claiming the company would ‘wipe out’ high street estate agents.
Now, with easyProperty’s merger with the Guild of Property Professionals and Fine & Country, it seems their investors have finally decided to pull the plug on founder Rob Ellice’s failed strategy.
I thought it an opportune moment to look at the wider trend of poorly managed estate agents panicking their way into a low, fixed fee offering – one that the public still hasn’t embraced beyond the 5% of sales that online agency in the UK has struggled to breach.
Can you imagine how the Guild’s members feel on being told that their membership organisation will help them earn less?
Let me repeat: help them earn less.
Estate agency is a crowded market, with often little to differentiate one agency from another. So the notion that going low fee will grow volume is beyond delusional.
However, a number of software providers are cropping up to offer agents the ability to earn less.
Proptoria is one such provider whose stated place in the world is as “Guardians of the High Street”: https://www.linkedin.com/company-beta/16275364/
Another, cleverly named Hystreet, advertises on Google that its white labelled service allows you to “fight back against online agents”:
We’ve already written about Countrywide’s efforts to ‘go hybrid’ – going as far as raising capital from the public markets with that specific intention.
The notion that agents are losing instructions to online or hybrid agents is interesting.
But is offering a clone of Purplebricks really going to help you beat Purplebricks? Common sense suggests not.
So what can agents do to compete when they think they are losing instructions to online or hybrid agents?
- Advertise – like RedDoor Homes. Purplebricks’s adverts are funny and memorable. RedDoor’s are even funnier: https://vimeo.com/219101577 and if you liked that, there’s more on their twitter: https://twitter.com/reddoor_homes
- Charge more – like Red Bull. Selling for double the price of Coca Cola in a can half the size makes people feel like they must be buying something better. Nested.com are persuading people to not only pay 2% commission, but 20% of anything Nested achieve over the asking price. They earn 50 to 100 times more per vendor than the typical online fixed fee offering. And several times what their typical high street competitor earns. Because their customers feel they are getting a better service.
- Offer a better service – use simple technology like Property Technology (I’m an investor) and Viewber to give people the sense that you’re a modern agency. Just like Fixflo, these offerings work alongside your existing software so there’s no need for painful switching.
Why does a modern approach to viewings matter?
I called to view a property yesterday. The agent on the phone actually said they couldn’t accommodate a viewing because they didn’t have enough staff. I’m still waiting for a call back from them to confirm my viewing for NEXT Saturday.
If I were ever selling my home, I wouldn’t use this agency. Ever.
Hystreet’s website says using them helps you “never lose to an online agent again”. I’d counter and say by using services like Proptoria or Hystreet, you’ll never earn a high street fee ever again. Let alone a fee as high as Nested’s.
For Guild members in their brave new world, the ‘easy’ brand carries the weight of expectation. It represents no frills and low cost. Everything you tell a prospective customer that you’re not.
Hopefully the new easyProperty management will take a different strategy, one that creates value by advertising, charging more or helping their membership offer a better service.
Well argued, Rayhan.
Will many have the courage?
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As a Guild agent this is exactly the comment I made on this site when the announcement broke. Why should I pay the Guild £6000 / annum / branch to join this low cost, low fee opportunity to save an estimated 5% of my turnover? I would be better off increasing my overal fees by 0.01%, selling 5% fewer properties, less hassle and make more money. N my view the Guild have looked at this asking how their investors can make money not how their members can. I think some membe s may vote with their feet.
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Or they have looked at it from how their directors can make more money, particularly from their shares!
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Just to put you right over Company structure. Investors covers anyone who has put money in- ordinary shareholders, preference share holders, loans etc. All will be covered with share certificates or agreements. They own and control the company and appoint directors to run it for them. Unless the directors own shares or have options they just earn a salary. They may have bonuses agreed by the shareholders but otherwise will not benefit from any increase in shareholder value.
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Yeah
I would love to be associated with online only/call centre agents:
https://www.facebook.com/estateagentmemes/photos/a.787703784683583.1073741827.787698468017448/1310091922444764/?type=3&theater
All of their days are numbered…
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Respectfully, this article is full of inaccuracies.
Firstly, as I understand it, there will absolutely no compulsion for Guild and/ or Fine & Country members to take up an easyProperty licence. So at worst this is an option – nothing more , nothing less. Guild and Fine & Country members will therefore be presented with a choice to add this option to their current offerings which can only be a good thing.
In respect of what you suggest agents can do to compete with ‘online’ or ‘hybrid agents’ – the Guild already have that covered ( and some!) and has for many years.
I intend to keep an open mind in respect of whatever options are offered and then make an informed decision. In the meantime I thank the GPEA for making such a choice possible.
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So as a member of Fine & Country or the Guild – Who pride themselves on a higher end market (the whole reason agents sign up to them)
You would / are happy having a basement budget model available to you?
A brand that is synonymous with cheapness?
Now i have no doubt most members will shun this offering, but what happens if a number do take this up or F&N or Guild start advertising this hard. Does that not make a mockery of what agents signed up for?
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No!
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