Estate agents – the traditional sort – might be forgiven for muttering “Infamy, infamy, they’ve all got it in for me” after this weekend’s media coverage.
In the Sunday Times Review section, writer Rosie Kinchen talks to Poundland founder Steve Smith about his foray into estate agency, with the interview headlined as “Giving property sharks a pounding”.
The sub-heading contains the usual (apparently mandatory) reference to “rip-off estate agents”.
It appears everyone over the age of 25 hates estate agents: “The only people who don’t harbour a tyrannical loathing of estate agents are 25 or under and that’s because they still live with their parents,” Kinchen asserts.
She goes on: “A ‘moral crusader’ and a ‘shark slayer’ are just some of the names he [Smith] has been given in the past seven days.”
The interview ends with a quote from Smith: “I loved saving people 20p on bleach, so it would be amazing to save them thousands.”
Over in the Sunday Times Home section, journalist Graham Norwood looks into online versus high street agents in a piece flagged up as “The death of the estate agent”. His article ends: “Traditional estate agents: you have been warned.”
Eye’s view?
There is, of course, nothing wrong with innovation, new business models, choice and competition, and indeed we welcome it.
However, it is a shame that this has turned into what feels like a very unfair PR battle and some better informed debate might be more useful to consumers than these endless slurs on high street agents (or double-dealing granny gazumpers, as Sarah Vine called them in the Mail last week without, so far as we can see, any evidence).
We are not here to do PR for agents, but we do stick up for them. That is not difficult given that the large majority (and we realise this doesn’t get headlines) are hard working, ethical, highly knowledgeable about their local markets, unafraid to grasp innovation and, most of all, capable of doing what most people simply can’t – ie, negotiate and hold deals together.
Of course, some (not all) online estate agents will do this and will argue that they do it just as well as high street agents. One rather wishes they would emphasise this rather than continually feeling the need to attack their opposition.
However, the crucial difference as far as consumers are concerned seems to escape the media’s notice.
It is that, generally speaking, you pay an online agent upfront, whether or not they sell your property. This means that consumers run the risk of losing that entire sum. Should this not be flagged up as much as the 0% commission?
With a traditional agent, you pay only when the deal has been done. It is called ‘no sale, no fee’ and it seems to suit the selling public pretty well – otherwise, why would well over 90% of vendors still use high street agents rather than go through an online agent or attempt to sell the property themselves?
Of course, some online agents will succeed, and indeed, we hope that the best models do just that and offer the public choice and the high street agents competition.
But we suspect that those that succeed will do so on the basis of the service they offer – including negotiation and sales progression – and not on savings, which may turn out to be anything but.
Well said, Eye. Very well said.
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…the trouble is…re the article pointing this out:
Of course, some (not all) online estate agents will do this and will argue that they do it just as well as high street agents. One rather wishes they would emphasise this rather than continually feeling the need to attack their opposition.
…the 'traditional' estate agents are attacking the 'opposition' (online or hybrids) as per the previous article quoting Mr Springett.
Everyone is attacking each other, rather than accepting the world is moving on, innovation and new business models will come to the fore and it would be great if all would be welcomed for what should be, in a service industry, the benefit for the consumer (vendor) in they have choice.
All should cut out the attacks – all forms of estate agency (professional and qualified) should be welcomed.
Regards
John
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Couldn't agree more…as far as I can see there is just a difference in service type , style, and cost from agent to agent……nothing new really.
We can all attack and argue all day long but in the end it is always the consumer who ultimately decides.
That is why I was somewhat dissapointed with Ian Springetts' somewhat strong feelings towards refusing certain agents without a traditional High Street branch behind it for AM.
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Jam01 said "Everyone is attacking each other, rather than accepting the world is moving on"
I'm not sure that is entirely the case. Below is a list of phrases from online portals;
"The internet has eliminated the need for traditional estate agents." EMOOV
"Internet based property portals such as Rightmove, Zoopla, Globrix, Prime Location and others have made the need for these kinds of high street agencies and their inflated fees practically non-existent."EMOOV
"Join the thousands that have saved thousands with the best online estate agent."HOUSENETWORK
"How much you could save? Use our online savings calculator" ESTATES DIRECT
The list is endless.
Yet can you show me any 'typical' estate agency bad mouthing online agents on their website? You would be hard pushed.
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Paul
I don't see, apart from the one comment about eliminating the need for traditional estate agents, as being an 'attack' on the traditional estate agent. It is a comparison of fees and hence, a service provided and this is the competitive market we live in.
I see nothing wrong in comparing prices – Asda adverts will show a tin of bean at 22p and the same tin for 40p. It is a comparison – not an attack.
What I am advocating, I would say, is play the ball, not the man/woman. Compare and contrast services, but do not attack the concept of the agency, when ALL are being run by professional and normally NAEA-qualified agents.
Regards
John
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You simply cannot compare the two.
Asda show a price comparison, a physical price comparison on what you pay at their store as opposed to Sainsburys.
These online agencies have savings calculators on agents 'estimated' fees but do not show what it could be costing you by using an online agent.
It's a saving based on a guess, yet it's being claimed as fact.
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None of this is new. After 50 years in the profession I must have seen a dozen or more of these 'new kids on the block' with their innovations and promises of slashing agency fees. They usually disappeared as quickly as they arrived.
What sellers want is to sell their property for the best price possible, and they prefer to deal with someone they can trust, namely the estate agent in the High Street. OK a few may be tempted by the apparent cheapness of the new offering, but they are the ones who until recently would have put their own board in the garden and we wouldn't have seen them anyway.
My mantra is stick at what you do best, do it well, make sure you make your clients feel as though they are valued, and you will continue to get your fair share.
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Would you still go to Dixons or Currys for your new TV.?
What about Thompsons in the high street for your flight / holiday.?
Sell your car/part exchange with your local High Street dealer without thinking of selling it yourself on Ebay?
Look in the yellow pages or thompson directory for a plumber if you had a leak?
Old ones I know, but true, and getting truer day by day. You really don't understand that the new generation of sellers and buyers will not use a high street agent as they do not want face to face service backed up by a shop…it's just not how future business (house sales inc.) will be done……and that is a fact…..If it wasn't why have Barclays got a plan to be off the high street within the next 10 years?
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Wilko
That was my point in the comment on the other article about Harris and 'taking the high st out of banking' when he set up EGG and FIRST DIRECT.
Some agents will remain on the high st but they will be few and far between. Others will be in serviced offices. Others will be virtual offices. Others will work out of their kitchens, some from the back of their garden sheds.
Technology has enabled us to run businesses now with flexibility and mobility – where the focus remains on customer service, exceeding client expectations, quality, quantity and spirit of service, then service delivery is all that matters.
A shop is no longer required to deliver these, as you rightly also point out.
Best
JM
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Does anyone remember the 'property shops' that charged a few hundred quid for displaying a property in their window? Did their 'innovative business model' prove popular with discerning home owners? We've seen new entrants come and go, which is fair and good for the market.
Journalists were less popular than estate agents in the last poll I read. Not all hack phones, as they know, so why do they try to tar all agents with the same brush?
It isn't agents who gazump buyers. It is other buyers who, when told a property is under offer, make a higher offer that we agents are legally obliged to pass on to the seller. Then it is the seller who makes the decision. These journalists are simply shooting the messenger and agents operating the poundland model will be obliged to behave the same way, so there will be no change to the market or protection for granny from gazumping.
One of my favourite clients turned down an offer £100k over the agreed price "I've accepted an offer and I'll stick with it". Would you behave the same way? Until we all say yes to this question we'll never escape from gazumping in a rising market or gazundering when prices drop. The second bidder was amazed that he wouldn't believe I'd put the offer forward until the seller's solicitor told him to 'get lost'.
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Well said PIE.
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It seems to me our industry requires a hot PR person of our own to present the positive side of estate agency and what we do. The NAEA, as always, seem pretty quiet on these type of press slurs. Bring back Peter Bolton-King all is forgiven!
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The problem is that the general perception by EVERYONE is that selling a property is easy. We are simply men and women in suits putting properties on the internet and then sit back in our neat high street offices whilst the money comes in, no wonder we are not respected .
In truth we spend half our time running around for nothing .
Someone needs to grab hold of the industry and change the public perception, it won't happen over night but it's now time that estate agents begin to be taken seriously .
I'm sure it is within the wit of man to find a way to make that possible .
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Well said, Paul H. I do so agree with you.
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Paul
I too agree!
JM
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The thing you missed from your statement above Paul is that the general perception is also that we charge them for too much for easily selling their property.
We do indeed spend half our time running round for nothing, and of course spend a large proportion of our income on abortive costs. harking back to our discussion on a previous thread, we, as an industry have made a rod for our own back with the no sale-no fee model, which is of course, usually referred to as the 'traditional' model. The real traditional model was that agents agreed a marketing budget with a client, and then a commission on completion of a successful sale. In my part of the world there were still one or two agents operating on that basis as recently as 30 years ago.
I do think that there is more public awareness now that we charge those that actually sell for all the cost we incur for those that don't, and how often have you been asked why you can sell a £200,000 property for a fee of £3,000 and yet you charge £6,000 to sell a property at £400,000
I firmly believe that if the industry as a whole charged for what we did, the public perception would be far better as they would perceive that they were getting value for money. I also believe that it would lead to an improvement in professional standards if a level of service was agreed with the client at the outset.
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Can't disagree with most of that Hound.
The no sale no win model is in part a contributing factor in that we are perceived as being happy to work for (in some cases) nothing, as we do for sales and lets that do not proceed fully. This helps to fuel the lack of respect for an estate agent.
The free market does, in some cases work against us !
I believe a good start would be that all agents must be fully qualified and adhere to strict codes of practice. The rest, I hope, would then fall into place .
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Paul
Unless all agents are compelled to be professionally qualified, then it won't happen. I wondered why I bothered being NAEA-qualified, when the branch managers of Bairstow Eves, swiftly followed by Mann Countrywide, knocked on my vendors doors trying to get them to break/change contract. They know I could not do likewise as I was NAEA qualified.
Also, I am now looking at a model where vendors do pay a marketing fee upfront, with a reduced fee but still a good fee, upon completion of sale, to negate the need for higher fees to cover costs of fall-throughs, etc.
Ward & Partners in Kent are advertising half of their stock as 'Sale By Tender' and are charging the buyers 2% plus VAT to purchase a property. Is this the face of Agency to come in a low-stock market?
JM
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Jam01,
I'm saying that all agents should be compelled to be qualified and that this should be law. It's a big ask, but I believe the only way we can start to properly change and better the industry and it's perception.
Not sure I agree with sale by tender, it turns us agents into property finders as opposed to estate agents.
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Yep – and most 'property finders' work out of serviced offices, particularly in Prime Central London. It is only a matter of time Paul….only a matter of time! 🙂
JM
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Good luck with your new model JM, I've been offering clients the choice between an up front marketing fee and a reduced commission on completion, or a larger fee on a no sale no fee basis for a few months, and the up front fee option is proving a popular option with committed sellers, particularly when you explain to them that other agents will expect them to pay for those that don't sell.
Doesn't work for everyone, particularly those just 'testing the water' (although we're not seeing too many of those at the moment!) but it also gives them an indication that we are a company who are committed to being fair with our charging, so has also helped to win some instructions on the no sale no fee basis.
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Thanks Hound
Good of you to share that it is working with committed sellers. I want to flush out the 'testing the market' brigade as in the past, a lot of time, money and effort was wasted with them – they don't 'get it' that you are running a business and not a 'let's see what I can get if I sell, which I am not going to' attitude.
The model focuses on getting market appraisals and when the property is listed, then it is down to services, application and ability to sell.
So many of those with High Street shops, and I used to be one, believe the shop is required to gain the instruction. Not in the new world and the new way of gaining them.
Look forward to sharing the results!
JM
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Well – at least I made 'comment of the week'!
That's one in the 'PIE' for some lol!
JM
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Jam01
You do realise that the property finders in my area charge between 1.5% to 2.5% to find a property. 😉
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Yep – as before it is not about the price you have to charge, just a better way of doing it. Buyer's agents don't need a high st office – neither do estate agents.
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