Countrywide, the UK’s largest high street agent, is going into the online sector.
Today, it announced a trial in three of its brands where customers will be able to choose either a traditional or online service, costing under £1,000 paid upfront.
Features include a personal online property account where sellers can manage their own sales; the property displayed in the high street branch, as well as on Rightmove and Zoopla; and emails about the property sent out to Countrywide’s database of potential buyers.
Self service vendors will conduct their own viewings which they will be able schedule online, but with an option to purchase accompanied viewings.
They will be able to view potential buyers’ feedback online and accept, reject and negotiate offers online.
While the Countrywide online service is more expensive than most, one critical difference is that sellers will be able to switch to the full high street service at any point.
The upfront fee they have already paid will be credited against their final bill, giving Countrywide the opportunity to win an instruction somewhere down the line, with some of the fee already in the bank.
Initially, the new ‘flexi’ service is being tried out at Spencers in the Leicestershire and Rutland area; Austin & Wyatt in Dorset, Hampshire and Wiltshire; and Frank Innes across the East Midlands. The fees vary between the brands – Austin & Wyatt is £995, while Frank Innes is £795.
The move by Countrywide ends speculation, for the time being at least, that it would buy an established online business.
Countrywide is now the third major high street agent to invest in the online agency market: Connells was first last November with the purchase of Hatched, while last Friday it was announced that Savills has taken a stake in YOPA.
Countrywide said that its venture into online agency would give its customers unprecedented choice and was “a leap forward for the industry”.
The launch has been accompanied by a training programme which will ensure its staff “are equipped to help customers make the most of the online service, and will enhance Countrywide’s traditional full service offering”.
It has also made the most of revamped technology via Launchpad, the name of Countrywide’s tablet technology.
Sam Tyrer, managing director of retail at Countrywide, told EYE: “We are incredibly excited to be launching this pilot.”
She said it had been developed after extensive customer research. In particular, consumers expected to have features that they could see in other sectors, such as online banking.
She also emphasised the uniqueness of “our new flexi service”, enabling vendors to switch at any time – for example, right up to sales progression.
Tyrer, who joined Countrywide last year with no estate agency background, said: “I have been in the sector for eight months now and I know that it is not that easy to sell a house.
“In particular, we know that some people are struggling to sell their properties with existing online providers.”
She added that the reason for launching the online service was “to grow the business”, believing it would attract more customers and drive increased footfall.
What has been the staff’s reaction?
“There was definitely initial nervousness among our colleagues, but now they are incredibly excited about it,” said Tyrer.
Had the negotiators been concerned about the possible loss of commission? “What we are doing for those negotiators nervous about losing out is to create office commission pots.
“But staff will still have to win the market appraisal.”
Asked who would be liable if a self-service seller misled a buyer during the viewing, such that a formal complaint is raised, Tyrer said: “Our teams will always work to mediate between vendor and buyer in any issues that may arise.”
We also wondered what would be the negotiators’ reaction to a self-service seller who had messed up the viewings and failed to get an offer before switching to full service. Would it be “Oh good, here’s another instruction”, or would it be “It’s been exposed to the market and failed to sell and now they want us to try and sell damaged goods?”.
Tyer said: “Our professional and highly qualified teams are always focused on doing the right thing to help our customers, whatever their circumstances.”
Tyrer said the trial will be just that – a trial. Customer feedback will be critical.
She expects the next roll-out to be at the end of this year.
More details here:
Terrible news for high street estate agency. A concern to all. Despite what we all think about CW they are a major player.
Alison Platt has just signed the end of high street agency. Instead of improving and ensuring CW future she has plunged it into doubt.
The most worrying thing is established brands are offering this “option” not a separate subsidiary.
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It isn’t a worry for everyone Smile. Countrywide are in that cross over zone between the passive intermediary listers and estate agency with the professionally cheap people over on the left, good solid local independent on the right. Countrywide have to compete with the PI agents and Local professionals. This is bad news for the shouty sorts over to the left and good news for those on the right.
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Sorry Robert on this I disagree, 1300 branches pushing the “cheap” option. Will only lead to others such as Connells and sequence pushing this. Then it will be seen as the normal way for the public to sell houses.
Believe me this really is the start of the end. Maybe not inside a year or two but 5 -10 we will not be the same industry.
It’s now about cheapness not service and knowledge. Some will survive but not many.
Time for plan B ….
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There is going to be a reduction in the number of agencies but I see this as a misinformed management trying out how to break out of a 20% market share that has remained stubbornly constant for 30 years.
I have been watching all this going on, hearing how this is the end of agency as we know it. I have seen agency after agency sell out to the Pru, Black Horse, Halifax, Woolwich, General Accident, and more recently Connels and Countrywide but in 30 years Agency dynamics and market share haven’t changed much. The onliners have now notably stopped gobbing off how “its all going online init” and are inching towards ‘hybrid’ (credit; Trafford- Nov 2012) With Countrywide and Savils getting involved in a demonstrably loss making industry sector all that is really happening is executives declaring “we haven’t go a clue, we know something is changing but we don’t know what”
The fact that people like Trafford pre-empted and argued with the likes of Day and Quirk 4 years ago they were wrong and have been by their profits proven wrong shows that some people understand this evolution of our industry better than others.
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With the greatest respect Robert, as i know you have the industries best interests at heart but most of those examples you give are 25 years old and floored from the outset. Also the whole buying up and then ditching took less than 5 years from memory. This online model in its various guises has already been going for a number of years and still growing.
In respect to agents being purchased today that is for the lettings book and they are sound investments.
Just saying a model did not work 25 odd years ago is noway to look at today’s risks.
The issues here is not if it is a good model but that it becomes the normal model for sellers to sell. If all the corporate and all these “new” options such as Yopa, PB all start pushing this advertising wise, Leaflets, national tv and radio, paper, magazines AND the national press back them (which they do). The public will have the wool pulled over their eyes and go with it.
I know you are trying to help and put a positive spin on it BUT denying is the worse thing we can do. We need to acknowledge this very real threat and look to win against it.
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I am not denying it is happening and have been labelled as mad for suggesting a solution to a problem the industry is beginning to wake up to.
The reason for including the old examples is to show how the rhetoric is always the same it is only the disruptor who changes.
You are now supporting and promoting OTM, the solution you are after is AM and not OTM. Someone needs to understand the subtle difference between the two.
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That i do agree with Robert, AM is indeed a step in the right direction but alas nobody is harnessing the potential.
But you have to question the whole idea of OTM /AM when Savillies a founding member invests in an online option.
If only a band of independent agents / ex-agents could get their act together a form a truly industry focused organisation for the good of agents and the public HINT HINT!!!!!!
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The YOPA thing is contingency purchase ( an unnecessary one) it’s an attempt to understand an evolution of the industry, a finger in the pie, skin in the game, a betamax video, a squaerial, a just in case, a reaction.
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(This would make a great telephone conversation)
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I think you are being too kind to Savills.
As a founding member they should distance themselves as far as possible from the online model not hedge their bets.
As for a call i am sure you have worked out who i am 😉
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There’s the contradiction, I go to great lengths to research service suppliers but leave agents to their anonymity, I am curious but patient. When the time is right for you I’m here.
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‘…most of those examples you give are 25 years old… Also the whole buying up and then ditching took less than 5 years from memory.’
Pru = Reeds Rains
General Accident = Your Move
Halifax = Your Move
Black Horse = Countrywide (via BBEA)
Whether we like it or not, smile please – the legacy is not only there – but still in a town near you and playing their Numbers Game til their hearts’ content!
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You forgot Cornerstone = Reeds Rains, Spicer McColl (Haart), Darlows etc.
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This will spark a faster ‘race to the bottom’ than we already have. Plus the ‘option’ of having a go themselves will damage the sale down the line.
Bad move by CW
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Their offering makes Purple Bricks sound amazing! At least you get to speak to someone.
I feel for CW staff having to tell buyers that you can’t view all 3 bungalows today… I can show you this one, but you’ll need to book the other two online.
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Also imagine being a lister going out to a 500k house quoting a 1.5% fee plus vat and the vendor turning round saying, “Why should I pay you 9k when your same firm will do it for less than 1k?”
Horrible position Platt and the board have put their staff in.
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As an agent that’s run a dual service for a while, it needn’t compromise a negotiator/ Valuer, in fact, it enhances it in many ways as it allows an easy intrduction of price v value. Personally, I feel that budget service has a part to play but, a relatively small part (dependent on location and market).
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Chris, With respect you have your own business and its very different for you. You will look to win business where you can and make a commercial decision on it. And i bet you do not heavily promote your list only service you probably use it as a last ditch hope to gain an instruction that a tight penny pincher has already decided they are “Going online”.
What countrywide are effectively doing is throwing in the towel for high street agency and asking their own staff to make themselves redundant.
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Here is the thing you see. They may have created a fancy front end “online platform” but their back end systems are so backwards. I suspect the back end process is so manual that with any volume it will fall apart. So the only way to solve it will be manpower which costs – but not only that if it is manual the customers will have such a lousy experience that the project will flop….
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So an average cost of a EA branch in the Austin and Wyatt area is a minimum of 20K per month.
So i now need to sell and exchange on 20 plus units per month.
The average mortgage sign ups per advisor are 8 per month.
But now i will have less personal contact with my online buyer or seller so make that 6 per month
If i were a sales advisor i would run as even with pool or team commission the pot will be smaller.
If this takes off you can bet that branches will close.
Bye bye countrywide
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Thing is Countrywide have over the last 5/6 years have scaled back branch and admin support and invested heavily in national “Admin” centers.
They are well placed on this to make it work if they want to.
The issues they do face is the gaining of instructions as basically the offices over the last few years have become canvassing centers. There number one job is to get property on the market and stuff the rest as it works itself out.
From what i see is these negs at these three subsidiaries are going to be tasked with obtaining market appraisals as normal but i bet they will also have a target to hit on how many pay the “Upfront fee”
They are asking negs, branches to make themselves redundant. – Unfortuanlry given CW employment record they hire young, enthusiastic inexperienced kids that do what they are told so they will not question it.
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NB
As i recall the last accounts showed an average of just 6 branch exchanges average per month.somebody needs to do the maths.
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I can see this being a huge train wreck for Countrywide and I really don’t think its been thought through. Whilst I think its sensible to develop an online option, agents that try to run a standard and then cheaper supposed online offering, always come unstuck. You need look no further than the online only agencies that have tried to offer both in this last year or so.
In my opinion the only way a cheap fee option works is if you get huge volume. With an agency offering both you don’t get that. Added to which is the real world at branch level you’ll have clients asking for the standard service at the online price and negs being negs will do some of those. I can hear it now “well its a real seller and its money in the bank”.
As Ive said developing an online strategy would have been prudent but frankly this smacks of a company that read these pages too often and believe the online only market is bigger locally than it actually is.
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The banks tried this with online models offering higher savings rates and lower mortgage rates.
They didn’t win new business. They cannibalised their existing customer basis and lost money.
And not having as a distinct brand… that doesn’t add up.
VW sell a high end product.
They wanted a cheaper option so they acquired Skoda. Pretty much the same car, engine etc.
But Countrywide are offering the VW at the high price and low price with the same brand.
It devalues and removes the justification for the higher price instantly.
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I agree, but I also think they have fundamentally misunderstood what people want from the internet when it comes to property sales. I believe they want convenience, they want ease of access to services but are they really looking for cheap, especially if that cheap means compromise? I suspect not and as you have said Glenn, they should have either enhanced their existing customer user experience by including it within what they do, or created a separate business.
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I can hear Mr disgruntled from Tunbridge wells complaining now. What do you mean you cant tell me xyz your the same company.
Well Sir it,s because your on a flexi package, I don,t care your the same company and it,s your Branch with the same people, Well you could pay for it Sir…………
Now when does the lease expire on Tunbridge wells…….can we close it yet Sam
LOL
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Somebody who knows the local brands 😉
Not surprised its not being looked at in that part of the world KK is an estate agent at heart and would hate the thought of this!
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He may soon be an estate agent for heart
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Further proof that the tightening of the traditional estate agency model marches on…
It’s significant that the industry is now ‘accepting’ of the online concept. It’s validated by the capital markets supporting break-in businesses like Purple Bricks and it’s really rather telling that the sector influencers – Countrywide, Savills (and more, surely, to follow) either make strategic investments or launch solutions of their own.
Businesses built on the percentage fee, and only the percentage fee are quite rightly frightened. As evidenced by SmilePlease.
By the way, it doesn’t matter if Purple Bricks fail, it doesn’t matter is Yopa doesn’t work out. Countrywide could pull the plug on their online offering next week – – the fact is that the more ‘online’ we see, the greater the cultural shift in buyers and sellers of the future. This train has already left the station. Get on it, or cycle back home.
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You are right, i am worried as its no longer about service, knowledge or marketing its about who can list my property the cheapest.
Why do you take so much glee in this?
Surely the service and professional standards or an agent should be upheld and built upon, not find the cheapest possible option.
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It is now becoming apparent that the reason why Countrywide believe that estate agency is a retail business is that they are now able to ‘loss lead’ via their own hybrid offering.
Let us not forget that 60% of their turnover last year was generated through cross sales.
The problem with these other ‘loss leading’ on line offerings is that they are no where near as good at cross selling as they cannot afford to have a viable specialist face to face cross selling platform in order to successfully achieve this 60% conversion rate.
Likewise with Savills recent punt. If I were them, I would be very concerned that someone does not invest a healthy sum into Fine and Country or a similar hybrid brand.
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I’m sure we must be thinking of this ourselves? We as an industry will need to adapt to compete with these new “threats”…and countrywide have done so…
Why let people use the likes of Purple Bricks, or YOPA when your firm can offer the same thing? Low maintenance marketing online…with the online agents the client is paying you to market the property for them, not sell the property or manage conveyance on the property, or assist on viewings (without additional fee, handle any hiccups or reprice negotiations, or updates and selling advice to help achieve an offer..
What I would think countrywide have done is offer both, Traditional contract/online contract whereby traditional approach they do all the requirements you’d expect from your high street branch (Minus the conveyancing management – because lets be real…has anyone ever had much help from CW firm in a chain before?) and have that fee set as the standard fee…or they sign up for just the online contract whereby they list the property, vendor carries out viewings, vendor progresses the sale, vendor deals with negotiations and that is it. Its a win win from instructions point of views – they haven’t lost an instruction to PB or YOPA because they’ve offered the same service.
Now I can see people saying well, won’t most vendors go for the cheaper option with the nationwide company? they may well do but when the property sale isn’t going as planned, I’m sure they’ll be additional fees on that online contract, or a way in for signing up the traditional contract as the online one wasn’t working for that property…
-But..but..It was my idea first!
Z
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The best thing for existing high street agencies to do is to make promo which demonstrates how challenging the DIY selling process can become, as in this example: https://www.youtube.com/watch?v=hYCH6ZqtH1w
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So a CW agent at an appraisal ” I say madam, yes we charge only 1.5% plus VAT, what’s that I hear you say? You think 1.5% is too much ! Well I’ll tell you what I can do……….
Does it go like this or ?
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Some very good arguments on differing points of view. What it does demonstrate is that what the public used to think of retail years ago to the present availability of smartphones and tablets has changed their outlook or one could argue are being honed into believing this is the future. Will it work is juts like those for and against Brexit …. wait and see. The media are pumping out more support in the direction of on-line. I have seen countrywide franchises already with minimal staff, signs going up closed for training when in fact we know that isn’t correct and one branch is often closed over the weekend and no longer use newspaper advertising (actually since Nov 2015!). Get a few big names going this way is likely to cause disruption until it fails? … all being done to reduce overheads and make profit. If they don’t make it work … they will go under as the public will never give then a second chance, nor will those agents that survive and left to pick up the pieces. Oh happy days ahead. Prepare, plan and have a plan B ladies and gentleman over the coming year.
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