The former director of Fine & Country and the Guild has made plain his disapproval of parent company GPEA’s online strategy which involves offering easyProperty licences to member agents.
Mike Bidwell, director of the Guild and F & C for almost ten years until 2015, has hit out at the strategy.
He has also criticised ‘kickbacks’ from industry suppliers such as conveyancers.
Bidwell, who is still associated with F & C as he is now back at the coalface as managing director of F & C in Essex, Suffolk and Norfolk, told EYE he is now free to speak his mind.
Posting up a comment on Friday on our story about Arun Estates walking away from any online offering, Bidwell queried why “any normal business would back a strategy that doesn’t make money”.
His comment said: “Even if the strategy is cloaked as a sprat to catch a mackerel, I’ve not seen many mackerels being caught.”
Bidwell went on to tell us: “I am on record as having a dim view of the position that GPEA has taken with regard to operating a self-service model in competition with its loyal and committed full service licensees and members, and the mixed message this sends out.
“Unfortunately, I’m not qualified to say whether this is a view that is shared by the majority, though, as I tend not to attend the regional meetings very often, but I sense that there is disquiet.”
Bidwell said there are other, related, issues in the industry.
He said: “Last I heard, the national fall-through rate was 37% and rising, and there is no way that you can do the job properly for a few hundred quid or whatever it amounts to, with the bolt-ons they charge.
“The other controversial point is the kickbacks from the solicitors.
“I have to say that it never sat well with us in the first place.
“We’ve now made the decision to ban it in this company altogether.
“This is in the belief that it is bad for the consumer and therefore bad for business.”
Adam Day, chief operating officer of easyProperty, said: “easyProperty is not right for everyone – people are obviously entitled to make their own decisions and form their own opinions as to whether they feel easyProperty is the right thing for their business.”
GPEA boss Jon Cooke said last night that he reiterated Day’s comments. He told us: “I agree for a business to be sustainable it needs to be profitable.
“However I am not so sure customers are that concerned about estate agents’ profit margins.
“At the end of the day the customer will make the choice and easyProperty are allowing licensees to offer choice if they feel it appropriate.”
I’ll pick Mike up on one point, there is nothing wrong with conveyancing referrals, as long as you are still referring the conveyancer/solicitor due to the quality of their work and not the fee. I still refer to the same companies as i did pre-referral fees, only difference is now they pay for the business, i’d be naive to now say, no please don’t pay me.
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The main reason we left the Guild at the end of 2017 was the over-focus on the Easy Property offering. The official line publicly is ‘…it’s if you feel appropriate’ but paying subscriptions every month to an organisation that has this agenda didn’t sit well.
I wonder how Mike feels knowing where his franchise fees are going?
I am certain clients and customers are completely unconcerned about agents’ profits but that is not a reason to go down that route. They are not concerned, but we do this to earn a living!
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Excellent points well made.
Referal fees should be banned – they are not good for the consumer at all. The solicitors despise them and often admit to putting the low fee work to the bottom of the pile – thus risking the transaction.
Clients paying the online only offering still expect the high street hand holding.
This policy of offering both is madness to many truly professional firms – I cannot see the likes of Carter Jonas and Knight Frank doing this so why would F and C or Guild agents want to? Fear of PB I guess!?
Be better, not cheaper.
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I think its time we had a campaign to do away with these referral fees. They are a serious stain on our industry and far worse than the tenant fees. They are NOT transparent and not in anyone’ interest, apart from agents. The conveyancers charge a fee to the clients and they think they are getting value for money, only to find out, if they look very, very, very carefully, that half the fee is going to an introducer. How can that be in any way equitable or defendable??
It is time agents had an obligation to disclose all fees for all referrals, including mortgages.
Let’s see how many dislikes that gets!
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I think if agents were transparent then fair enough, however the reality is that if you just look at the fees alone that agents are earning every month off volume conveyancers like Live and MyHomeMove, its an eye watering number.
I know of several firms that are earning over £250,000 per annum alone just off conveyancing as lets not forget they put a referral on each matter ie, sale and purchase – at one point an agent I know was taking the best part of £400 per matter – no surprises that the exchanges suffered at year end as the people handling the conveyancing are the legal equivalent of battery hens.
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We do not receive any kind of referral fee from any solicitor recommendations, instead we recommend a number of local solicitors that we feel are best suited to the clients needs and leave them to make the decision. As a result, we now receive far more solicitor recommendations which in turn produces more revenue than we could ever hope to achieve by asking for referral fees.
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Ditto.
We have a handful of local solicitors who have proven to provide a great level of service to both us and their client – and they can actually get a deal through! In turn, they have recommended clients to us.
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Sol recc fees ARE transparent! If agents aren’t writing to the clients confirming the amount they are receiving as a result of an introduction to a solicitor..they’re breaking the law! …If the client is aware, I don’t see a problem … I totally agree with @AuthurHouse02 with regard to the primary reason for recommending a solicitor as to the quality of their work.. the referral fee should be secondary … which is probably where the arguement to ban referral fees is justified where agents are perhaps paying no regard to quality of work, rather the best referral fee. More fool them I say..
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I would wager good money that agents are not divulging what fees that are earning as a referral fee. Some of the numbers getting paid are eye watering. I don’t know of a single agent who takes referral fees actually divulging how much or even that they are.
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Fair play to Mike for voicing his opinions, which I hear frequently from other agents. There are several points that don’t sit easily and despite the new poster boy of the Guild fronting up the standard line of “look Easy Property is nothing to do with the Guild” that doesn’t quite ring true when it was the very Guild that got everyone together to try and persuade them to take the Easy Licences.
The reality is simple, the vast majority of agents who have taken the Easy Property licenses are NOT working them for Easy and instead are taking the licenses to lock out anyone else coming in and doing it, therefore it is just rinsing it for another license fee. If Jon Cooke and crew were honest, they’d divulge the the number of those license holders who have and are actually listing properties – must be simple enough to find out, however its easy to just take the money every month and spin out the standard line of look how well we are doing etc etc.
At the end of the day, Guild, Fine & Country and Easy Property members are being held to ransom, as they are now saying, well you might be the Guild member, however if you don’t take Fine & Country and Easy Property then we will sell it to someone else who is then going to be a competitor – so much for protecting the very Guild agents who have supported that business for so long as they are effectively saying we want to take 3 license fees per month from your territory rather than one and don’t care who pays it – nice way to treble your monthly fees. All the bulls**t that the London Park Lane office markets properties etc, its a joke, because they wear so many different hats and outfits that they’d give Mr Benn a run for his money.
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I agree with the comments regarding easy property but i think this witch hunt on referral fees is getting a little out of hand. The solicitors need to disclose in the paper work (quote) that a fee is payable.
Same way a mortgage broker gets a fee from a lender and is disclosed. In fact most mortgage brokers now charge a fee and take a commission from the lender.
I am happy to say we get a split on Solicitor referrals, Mortgage referrals, EPC’s and Surveys. We will at some point when Mr May is up and running probably be looking at utility switching as well.
We get on well with the firm we offer the leads to, they give us a good service and their legal fee is circa £650.00. They have a proper office and you deal with the solicitor directly not a ‘Team’
This is not a bucket shop such as ‘Premier Property Lawyers’ – We also get a reasonable £200 per case not the £400 that some charge through the bucket shops.
As long as you comply with the law, and you are recommending decent honest firms there should not be an issue.
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As the owner of an “on-line” agent (EweMove) my observation of on-line pricing is that we could not expect to make any money (locally or at the top co level) if we operated on a fixed fee listings basis at the level of the fixed fees currently in play. It’s why we stick to the tried & tested no sale, no fee model, offer competitive pricing (average 1% fee) but win instructions against the traditional high street agent because we are a genuinely 24/7 business, have a slick tech platform, compete on service (we don’t lock in customers using a sole selling rights agreement) and one person sees your sale through from start to finish. Without the overhead of shops and using smart technology to replace staff, we can sell one property per week (the national average for all estate agents incidentally) and make money on every sale. The conundrum for EasyProperty is that as it morphs into a “full service” model, increases its prices, and starts charging on a NSNF basis, it competes DIRECTLY with the service proposition of its Guild members, rather than being the off-piste alternative for slightly unhinged Guild customers lured by the siren call of Purple Bricks.
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Can i book a viewing at 1.30am today and have a viewing an hour later? – No- You are no more 24/7 than any other agent.
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ChumpExecutive
we can sell one property per week (the national average for all estate agents incidentally)
couple of questions;
1). Which area of the country are you based in?
2). How many of you are there in the business?
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Why do you use the soubriquet ‘ChumpExecutive’? is it because you bought a Ewemove franchise rather than a real agency?
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Thank you Mike for speaking out. Your comments read like a breath of fresh air, when it comes to referral fees.
Obviously, we don’t disagree with referral fees as long as they are proportionate and appropriate.
To be very clear, if an agent recommends a law firm because they have been told to (ie their bosses have drunk the panel manager Kool-Aid) when they know that the service is below standard, then they are at risk of breaching the Bribery Act 2010.
If any reader doesn’t believe that there is a connection between the Panel Manager myth and increasing failure rates and extended transaction times then we’d be happy to explain it…
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