Online agent Adam Day of Hatched has launched a scathing attack on many in his own industry – saying they do nothing more than facilitate private sales.
He has also attacked Sarah Beeny’s C4 show, How to Sell your Home, in which he himself appeared on Monday night.
Day said he is now questioning his company’s own position as an online estate agency.
Day said the show has “misrepresented online estate agency”and many of the services offered by online agents.
But he warned there are many new online estate agents who are devaluing such work.
Day said: “I know for a fact that some of the ‘online agents’ were misrepresented.
“In a couple of episodes, it showed the owner taking their own photos, arranging viewings and negotiating their own sale. This is simply not what the original online estate agents set out to achieve and it’s not how we work.
“At Hatched, we personally visit the property, arrange the viewings, negotiate the offers on behalf of the vendor and progress the sales through to completion.”
On the show on Monday, it did clearly show calls being made to the owners from Hatched advising them of the four offers they had received. It also showed Day himself taking the photos and advising the owner to de-clutter.
Day said: “There has been a recent infiltration of online estate agents who, for me, have started to cheapen estate agency by cutting huge corners – allowing vendors and buyers to talk directly to arrange viewings or even negotiate the offers and their ultimate sale.
“This simply isn’t estate agency – it’s private house sales.”
Day told Eye: “There is now a muddying of the waters within the online estate agency sector, which needs to be made clearer.
“Having watched five of the six episodes, it’s clear that at Hatched, we’re actually not ‘online estate agents’ but somewhere between that and a traditional agent.”
Interestingly, Day has so far been the only online agent to actually appear on the show, apart from Beeny herself.
The property featured on Monday night was a flat in north London and was valued by a high street agent at £250,000 and sold by Hatched at £250,000. The owner saved around £4,000 in high street estate agency fees.
Day went on: “I’m an estate agent, and I absolutely believe in the ethics of good estate agency, and that will never change while I’m in charge at Hatched.
“We’re proving that we can offer a complete estate agency service, using technology to drive efficiencies which in turn allows us to offer much more competitive fees.
“But I do have a genuine fear for estate agency as an industry.
“If traditional estate agents don’t start to consider their tech offering and driving efficiencies, then these new, purely online estate agents could start to take large chunks of market share, especially with shows like this where it was made to look like it could be done with very little guidance whatsoever.
“I think high street agents who haven’t adapted or considered their tech offering are on dangerous ground at the moment, and they should perhaps consider a more hybrid model like our own.”
Day’s remarks about online agents that really facilitate private sales are relevant in the current portals debate.
Both Rightmove and Zoopla accept online agents’ listings provided they fulfill minimum criteria, while OnThe Market will not take them at all.
Thought these guys were all in favour of increased "consumer choice".
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Only to a point, Blue – they are only in favour of THEIR CONTRIBUTION to the increase… nothing else – 'cos anything else makes the slices of the cake thinner. ;o)
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Hoisted by ones own petard springs to mind here, but I feel sorry for Adam, he had an ok business while very few others operated in his space but now that 3% market place is experiencing a feeding frenzy, he's losing out. I'm not surprised he is trying to create a distinction for a third tier of service levels. He doesn't have the cash to compete and the big drawback of a business pitching on price is that he never will generate that. He needs some rich muppets but I suspect he knows that.
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Your right…Day is being drowned out of this space and can't keep up. A shame really as I've always found him to be entertaining!
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Both Rightmove and Zoopla accept online agents’ listings provided they fulfill minimum criteria – Which is they can pay the invoice within 7 days!
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Poor old Adam! (slight snigger) There is nothing more embarrassing than naivety. There have been sooooo many posts telling Adam Day, Quirk, Ellice & Co that there is a large grey beast, with a loooong trunk and big flappy ears sat on the living room carpet that it difficult to feel any genuine sympathy for them.
It is not possible to offer an Estate Agency service (with staff and premises) for less than 1.25% average (ex vat) that relates to about 1.125% with no premises at all or 1.18% on a business park. Dip below those averages and a full service agency becomes less worth bothering with. Adam Day is apparently trying to do the job properly but is competing head to head with passive intermediaries who aren't. It is because the line is so blurred between the two services that Adam Day is suffering the financial consequences of not being able to compete and Agents Mutual are discriminating against full service agents that are as professional as any High Street Agency but who simply don't have a window display.
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Forget online agents mark my words if Z 6% down yesterday or RM 3.4% down yesterday (who are answerable to their shareholders ) end up loosing out they will certainly start 'The private Sale' process as to a certain degree are already facilitating this without real proper checks on 'online agents process'. The rumor mill on this has already started and will continue to develop, However dealing with multiple vendor/ clients and payments could get interesting! and could effect their own client base too. Decisions, decisions.
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Zoopla already does with it's "tempt me" proposition, essentially allowing people to sell privately if somebody is willing to pay the price they want.
The link below shows 4 pages of "private listings" in SW11 alone.
Talk about biting the hand that feeds – sheer arrogance on the part of Zoopla.
http://www.zoopla.co.uk/home-values/london/sw11/battersea-clapham-junction/?st=ST
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Hold on Shaun77…Are you saying that Zoopla now allow properties to be listed privately? Can buyers contact the seller direct and does the seller have to pay a fee for this?
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This feature has been available for years, if you have not seen it I would question why not as you have a very strong opinion on Z and RM thought you would be more in the know……. Buyer contacts seller direct and seller pays no fee. I actually like it as its so hard to find on their site they never get interest from the public and we contact them to list the property for them. (although some CRAZY asking prices)
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Smile Please…I genuinely did not know about this feature and probably for the reason you have specified,(it being hard to find on their site). How much does the seller pay for this?
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Seller pays nothing. Not a penny. its not shown on the main listing page, you need to set up a zoopla account from that you can see properties available in your area. think they go back to 2008. They list it through the Z index, i.e. how much is my property worth, they can set an asking price of how much they would be tempted to move for hence the crazy prices. I have used it to pick up instructions for last 5 years or so. Not once has a vendor had a viewing from Z
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In their sales pitch, they advise agents to use it to canvas for instructions. In yesterdays report to the stock market, Zoopla say they have issued 40,000 appraisal leads to their members which equates to £150m in fees! Anyone received them?
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Do a google on Alex Chesterman and uniplaces too. Its a site be invested in to allow private landlords to advertise away from agents.
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Is that really an issue? A lot of Directors of successful businesses have fingers in other pies. Its not like Z are promoting uniplaces or they purchase data from it. I know most of us as small companies only have one revenue stream but as wealthy individuals they spread this wealth to create more. If Alex Chesterman had a host of companies he had set up and failed and continued to do this I could see cause for concern. Harry Hill left easyproperty – is it just coincidence this happened after the press and others jumped on his numerous failed business ventures??? This is a concern Alex Chesterman with another investment to me is not.
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I know 40,000 appraisal leads! I think in all the years I might if I am luck have received 2! I wonder how they qualify an appraisal lead? Given they have circa 20,000 agents that's still just 2 leads per office every year.
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fair play to his honesty……….
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Whilst RM and Z let budget and operatives of passive FSBO models in some such as Day they have created models propped up by the majority other agents there. Agents have now adopted other market places such as OTM and even our own INEA as a MLS B2B. Such new models exclude budvet operatives in favour of traditional agency……………… grenville Turner MD of Countrywide told me they allow 200 budget models into Zoopla. Proper agents are now voting to be elsewhere. Places where buxgets will be excluded………………. Maybe the "Day" is returning for traditional higher fee agency. The places that allow budget may end up with just that. FSBO and developers. Roll on traditional higher fee agency………………..In fact we do have one budget agent joining INEA. But on the basis he changes from budget to a traditional agent model which he has agreed to, saying budget offers hasnt worked for him.
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Many online parasite agents are out to do a small amount of work for a small fee without leaving the chair in their spare bedroom at home. They will stick the owner's photos and description on websites. It's as easy as selling your old stuff on ebay.
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People used to complain about the lack of 'barriers to entry' in the traditional estate agency model because anyone could open up. The hard task used to be finding ground floor premises with office use, but even that hasn't prevented agents operating in an overcrowded marketplace. Well it is even worse for the online agent, simply no barriers to entry. All you need is a PC, broadband and someone to host your website. If sellers are taking their own photos and listing property how do would they know the site isn't run by a group of IT literate GCSE students trying to raise pocket money? If kids can do it for next to nothing, the business model will be eroded away by overcrowding, poor service, poor resulst and end up with a worse reputation than traditional agents. If I child of 14 was stabbed by a 19 year old he met online, how safe is a prospective seller who allows an online agent into his or her home to take photos? At least with premises, there is a chance to check reputation and credentials. Perhaps the Government should control who is allowed to enter sellers' homes posing as an estate agent. Would that be better for personal safety?
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I agree with most of what you say, The day a homeowner is attacked from arranging a meeting at their property by an internet agent will have a real impact on their business model. I think any agent reading this should but this in their armoury when pitching against an online agent. Is it really worth putting your families lives at risk to save a few hundred quid….
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At Last an online agent that is trying to align his service level with that of high street agents, rather than attack them. I think that their options (all are linked to results – in truth) are far more appealing than those offered by the companies that he is moaning about in this article(pay up front and we'll stick you on Rightmove!). We all know the industry is changing quickly and, up until now, sellers aren't interested in online agents, but Hatched seem to be on the right tracks, in my opinion. Those that work alongside the established agency model will do far better than those that stand against it!
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I agree with Wilko in that the industry is changing faster than most people think but the public are not ready for a square wheel. The existing system works well and gets results…. it's just not effective and as streamlined as it could be.
I believe most clients for the foreseeable future will always want someone to guide them through the process, accompany viewings and be there for when things go wrong. If the agent isn't local he/she will never be able to do this as well as a national company.
I have to disagree with Benay however re fee levels. Surely % fee level thresholds depend on where you are in the country? For example if your 3 bedroom semis are £175,000 and ours are £350,000, we can operate on a lower % but still receive a healthier cheque on completion day? I own and run a local (full service) non-high street based company with a team of 6 experienced staff (including myself), have nice office premises, and generate a profit charging all clients 0.75%+VAT.
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Why? You could charge more. Maybe AM should encourage agents to charve a min fee of 1.5% and above. 🙂 only joking as the competition markets would jump on board. But if an agent does a good service and at least negotiates deals up. Then charge more.
A good agent is worth more to the vendor when they can negotiate top dollar in a deal. Getting higher fees isnt hard. It should be the bi lroduct of justifying a better than average service.
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Trevor – I see your point but I guess it's a business decision I took and am happy with. Clients like the transparency of our terms and conditions/fees which is something (based on previous experience) is missing from the traditional model. The general public are bored of hearing that 'agents really need to see the house before they are able to tell you what their charges are'. How many potential clients really believe that?
With most agents having a range in their fee levels, i.e from say 1% up to 1.75%, is this really down to how saleable the property is, or is it based on how much the client has haggled the fee down with the listing agent? If a 'typical agent' (whose pipeline has deals in it with fees ranging from 1% up to 1.75%) values a property which they know will sell within the week, how likely is he/she to openly offer the client a 1% deal if the owner doesn't ask for a discounted rate? Quite unlikely. Our approach is more open and in return more clients are realising this and using us to sell their homes.
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I'm sorry Mark but I just don't understand comments like yours. Since when has anyone been in business to just about make a profit? Do you see RM saying: well we made 28 million but we don't need that much so we will offer listings to our customers for less (however much we wish they would), in fact name me one business that does. If you are happy with profit then good for you but lets be frank about this, if you thought you could charge more you would or should, you clearly have to compete on fee to win business, personally thats not how I do it, but each to their own. For those who say that anything more than covering costs or making a small modest profit is disgusting, I say move to Russia, because the whole economy relies on companies making money and expanding. More profit means more taxes, it means greater investment, it means more jobs, more money going back to the community, more given to charity, the list is endless. In short its not a bad thing and certainly isn't as simplistic as lining some fat cats pockets. Its about valuing your service. If you are the best in your field you charge the most, if you are not you charge less and hope people use you because of that. Only you will know where you sit amongst that with your 0.75% +VAT.
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Real Agent – Perhaps I came across too softly there. I am in business to make the best possible profit (we are far from just about getting by) and agree with all of the points you made re regeneration. However, I am sure you are aware it is a fine art to get the right balance between volume of instructions and fee level. If it's not then why don't the best agents in the UK charge 4%?
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Best perceived agent in London 2.5% sole
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Firstly, I can be blunt so no offence was intended and yes of course there is a deferential, there are price points in any market where if you cannot show a discernible difference, then customers won't buy. Its not for me to tell you how to run your business, and if 0.75% is the highest fee in your area then fine, thats the market point, if it isn't then why would you charge less than your competitors. Do you feel you offer less, are your staff inexperienced, are you likely to achieve less for the property? If these things apply then fine charge less, if they don't however then you are devaluing your product and looking to win business on how much you charge, which is a waste. You see this all the time, agents lose an instruction to an agent charging less and then think we've got to be cheaper, when actually there are always agents that will charge less, enter the plethora of online only agents, the fact is though its always better to take on fewer, do a better job with those fewer and earn more from the transaction. I think 1.35% – 2% is a perfectly reasonable charge for most agents (perhaps more where property prices are cheaper), and as to high commission values well that normally reflects the more affluent markets thus expensive areas, so you would expect agents to have to pay higher salaries to get the best local experts. But of course that's all just my humble opinion.
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I think a transparent .75 % is where a lot of the market will be in the uk in the next few years. People will still want "full service" but not expect to see their agent at a ground level commercial shop/office. There will be exceptions (top end) but on the whole this is where I see it ending up.
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"I think a transparent .75 % is where a lot of the market will be in the uk in the next few years."
What a scary thought, wilko! What about areas where property still sells in groats and farthings? Would YOU list a twelve… yes, TWELVE… grand house and give it all the trimmings, knowing your reward will be a gut-churning £108 – of which the Chancellor takes £18 to help balance the nation's books?
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fair points pee bee, and I did say "a lot" not all of the market, and to be fair I should have said bottom of the market as well (hatched do have minimum fees). Average uk house price is around £250,000 which would make an "average" fee of around £1875 plus vat. Thing is, in time, some of the extensive advertising that the online agents are doing will, at least, focus sellers more on fee and that, in turn, will squeeze fees. When high st leases come up for renewal there will be a fair few agencies that move some/all their operations "upstairs" and pass the savings on to increase competitiveness and maintain profit.
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I'm afraid I have to disagree with you here Wilko. Whats more transparent about .075% + VAT than 1.5% + VAT? I'm sure you are right, some clients don't care whether you work from a high street office or a non high street office but what's the real difference in cost, £5K a year in rent?, and of course the former has the advantage of being an advert for buyers who may just happen to catch site of their dream home, or be accessible for the client who is in town and wants to chat through their sale. I also think that many agents forget there is only one side of the transaction that pays for a service here. In lettings both the tenant and the landlord pays for the administration (staffing, set up, advice, protection, selling skills, problem solving etc). In sales because it was deemed someone wanted to "sell" something, its now taken for granted that the agents will deal and assist the buyers to get them to completion without charge, but there has to be one. Even in companies that employ separate sales progression the local branches end up being involved to ensure that the buyers questions are answered and they are continually encouraged to "buy". That takes staff and sales people to do that and that cost is real. Many estate agents across the country are looking at profit levels of I would guess between 11-18% and thats based on the national average commission charge. Not massive is it really, I wouldn't say that firms making those sorts of profits are "lording" it up. They are charging about enough to make their businesses worthwhile. Online only are simply cheap agents, the smarter ones have worked out their charge on what numbers of properties they can guarantee a profit from, but even with them they are investing in the gamble that they some day reach 30%+ market share and can increase their prices because as it stands today, not a single one of them will be making a profit. The dumber ones, including many trad agents, have just picked a sum that sounds cheap and haven't really worked out what is costs them to make profit. They pat themselves on the back and say how well they've done to win business and then are sending out c/vs applying for jobs two years later.
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Real Agent "Whats more transparent about .075% + VAT than 1.5% + VAT?"….nothing, and I didn't say that there was a transparency difference. You make some very good points…could I ask if you advertise 1.5% plus vat in your window, on your website, leaflets etc? And if a potential seller calls your office and asks for your fee do you state 1.5% straight away?
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The crucial word in the paragraph was 'average' some agents still get 2% sole 3% multi which off sets all the sub 1%. If you were reading EYE a few weeks back the averages were included in one of the stories courtesy of Peter Knight.
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Sorry Wilko only just saw the question. I think I have answered it in a thread below but in essence, I don't want my potential clients to choose based on fee, so its not hidden of course, but no we don't advertise it. If someone calls about fees, we will again try and suggest we discuss all of the home move costs including charges at the valuation, but if someone insists then we will say. Its always a judgement because customers don't know what to ask for when they speak to an agent for the first time so the simple question is "can you tell me how much you charge" but that isn't what they really want to know however. What they really want to know is are you the right agent for them so our job is to try and rephrase their first question…….if that makes sense.
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Which is exactly what we do, and most other agents like us. My point was that I think that some of the online advertising will begin to start influencing sellers over a period of time to "not believe" our narrative that goes with our fee and to look for "best value" on websites. In truth that may mean we don't get called in as much in the future.
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I wouldn't lose to much sleep over it Wilko, the bottom line is that the advertising these firms are doing right now is as good as it gets for them, At some point without generating huge profits they are not going to continue it. Besides we make a big play of it on here, as in fact they do, but if you've got a good business 50% of your customers have used you before, 20% will choose you because they see your boards and adverts everywhere, and 10 % because of your high street office….that 20% is the only bit you need to focus on in terms of promotion and valuations and if you can speak to them you can sell to them. They will need your pricing because they won't get it from the online only or cheap fee crew because accurate valuations, as we know, come from comprehensive local market knowledge.….otherwise its all just guesswork.
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Good, @hatched has done himself a bit of credit, not enough to unwind the 'hit and run' cobblers he has spouted in the past but today, on this subject I agree with our own little one man press release so that's nice. He might **** it all up soon but for now I say good man Adam – Jonnie…………Ps, I reserve the right to change my mind on this at any moment.
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Hmmm… not so sure I agree, Jonnie. Only a week or so ago I requested NOT FOR THE FIRST TIME that Mr Day answer a few questions relating to the "local" service he claims to provide. Despite his earlier zeal to interact on the thread – http://www.propertyindustryeye.com/high-street-agents-almost-incentive-get-better-price-clients-claim/ – my questions have lay unanswered for nine Days. Or 117 days, if you want to take it back to the FIRST time I asked him… Now SOME people COULD well come to the conclusion that he is avoiding the question on the basis that the answers tar him with the same brush as those he now seeks to distance himself (never a better decision made, methinks…) from – BUT I am sure that it's simply down to the fact that he's far too busy to chew the fat with the likes of little old me and my pesky posers.
No doubt there simply ain't enough hours in his Day… ;o)
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Either I'm mixing my meds or Smirnoff finally caved and upped the proof because Adams got me all choked up. Dude tex me when this dovetails and Russ grabs his lady b*lls and starts buying a round. Sure, I get the enemy of our enemy thing but jeez, a friend is spreading sincerity a little thin so maybe we just let this one bleed out. Either that or we get Adam to p** in a cup and wait out the results because here's the thing and I'm too half man half sofa to overthink this but, doesn't defining online agency benefit online agency? Buddy I get the ranker but using 'estate agency' as a fig leaf just ain't cool.
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Some good points raised on the lower fee level. Our average value currently is £314,309 making an average fee income of £2357+VAT. This works well for us but wouldn't 10 miles up the road. We have a min fee of £900+VAT based on selling a property at £120,000 which is approx £20k less than the average value of a 1 bed flat in our area. 0.75%+VAT is certainly not the highest fee which is being charged in our area but in offering this to our clients, and openly promoting it, it has enabled us to rapidly grow our market share (trading for just over 18 months). Approx 20% market share in our town where there are 10 competing agents + others from adjoining towns. 0.75%+VAT is more transparent than 1.5%+VAT because we openly advertise our fees. I don't think there is a company in the UK who openly advertise their charges at a level of 1.5%+VAT or above which clearly demonstrates less transparency than our approach.
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"0.75%+VAT is more transparent than 1.5%+VAT because we openly advertise our fees." With respect, Mr Treagust, that is a ridiculous statement. Your fee is NOT 0.75% + VAT – the fee your "average" customer pays is 0.9%. Why should YOUR CUSTOMER have to work out how much TAX they will pay at completion? REAL transparency starts with not 'hiding' cost… and on your web advert the '+VAT' is small enough to fit UNDER the '%' sign – and certainly NOT under a spotlight for their attention so that they have a TRANSPARENT view…
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Also Mark to be fair you advertise your fee because against the backdrop of public perception you believe 0.75% + VAT is a selling feature of your company. I don't want my potential customers to choose me based on how much I charge so I don't advertise that I prefer to advertise the things that my company stands for, My charges are every bit as transparent, but I feel that customers need a commentary to go with the fee they will pay so that they fully understand what they will be paying and can make an informed judgement comparing like for like. Ive been doing this a long long time and there is not one company that has set out its stall as the cheapest that is still around today. Not one.
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I appreciate the feedback and the points raised. I respectfully understand that there are many different ways to offer a complete service to home-owners looking to sell. Whilst I do consider a cost saving is an appeal to many clients, it is not the only, or necessarily always the main reason why people choose to use us. After all we are still quite expensive compared to the likes of the national online models which people would choose if they were looking for the cheapest option out there. I am pretty sure all sellers base their decision on the correct balance (in their view) of service, cost and reputation. I do not have 100% market share in my area and never will as I fully respect the fact that we are all different, like different approaches, and have different priorities.
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"I am pretty sure all sellers base their decision on the correct balance (in their view) of service, cost and reputation." "0.75%+VAT is certainly not the highest fee which is being charged in our area but in offering this to our clients, and openly promoting it, it has enabled us to rapidly grow our market share…" Two HIGHLY CONFLICTING statements, Mr Treagust, both made by yourself less that two and a half hours apart.
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I am struggling to see how these are highly conflicting statements. The point I was making is that clients consider various factors when choosing an agent. Not just cost, service levels or reputation alone. If a firm offers a good service, has a good reputation, and offers a competitive selling rate I believe their chances of winning the instruction is higher than the next agent who is offering the same but trying to charge/justify a higher fee.
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"I am struggling to see how these are highly conflicting statements."
Yup – I can see why this be the case, as you also struggle to see that IF your bite is anywhere near as good as your bark, your clients would without doubt pay you more for what you do. On the other hand, if that is all YOU consider you're worth…
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It seems that we are both running out of steam here….but I've enjoyed the exchange. I hope there is one thing that we will agree on – 'profit is more important than turnover' and we will only know ourselves which approach works best for our individual businesses. I'm sure there are some agents out there charging 2% who are less profitable than other charging 1%, and vice-versa.
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Sorry to hear you have run out of steam so early into the exchange – I'm up for an all-nighter anytime – but as a result some could well come to the conclusion that such an early stand-down serves to clarify why you have set your stall out in such a way that fee will never be an issue with clients.
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Thanks for the offer of an all-nighter… maybe another day on a different topic? As for running out of steam… perhaps I was just being polite. I am quite happy with your conclusion that some people might think their approach is better than mine. That's the nice thing about us all being different.
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Thanks (genuinely) for coming back Mr Treagust. I hugely enjoy healthy banter… and I THRIVE on heated debate with the usual whingers who think they are ninjas! ;o)
Here's the thing – in some ways I don't think we're poles apart on this. Unlike some, I don't have a problem with your business model. In fact, from what I see you are building quite a good one considering the length of time you've been up and running and I applaud you for having the cojones to go for it. I dislike the 'hybrid' badge that the likes of your company seem to have been tagged with… but at the end of the day it's better than some of the alternatives so forgive me if I occasionally let it slip into conversation, it won't be an attempt to dilute what you are and what you do – which from what I have observed is SELL HOMES.
I just wish you valued your own service more, as I firmly believe your clients would…
Have a good weekend, Mr T – look forward to the next time! ;o)
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Thanks Mr Peebee. Nice message. I actually quite like the title hybrid although it's not one I'd usually use to describe my company to clients. Hybrid works though..two more sales agreed today. Have a nice weekend too… Until next time (maybe). 🙂
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