High street estate agents earn ‘money for old rope’ says Charles Dunstone

Carphone Warehouse tycoon Sir Charles Dunstone has said that estate agents get “money for old rope” and that online agents will do the industry what Uber has done to black cabs.

He made the claims in an interview with This is Money.

Dunstone, who also heads up Talk Talk, invested £5m into online agent HouseSimple earlier this year.

He hit out at traditional agents who charge “the same percentage commission for any property they sell, whatever the price”.

He went on: “The average house in the UK costs £6,000 to £7,000 in estate agents’ fees, against our [HouseSimple’s] £475.

“It’s doing to estate agents what Uber has done to Computer Cab. The idea of an expensive intermediary in the middle isn’t adding enough value.”

HouseSimple is described in the article as offering “consumers a different choice to grasping estate agents”.

The article also described Dunstone as having launched HouseSimple.

In fact, Dunstone neither launched the business, nor is a director, although he is a backer.

HouseSimple does have a non-executive director from Dunstone’s company Freston Ventures Management, Robert Clarkson. The majority shareholders of HouseSimple are Alex and Sophie Gosling.

 

 

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18 Comments

  1. Typhoon

    I hope he has a lot more money as he has just poured £5m down the pan. He clearly has no idea just how much a professional expert estate agent does”for their money” A property sale or purchase is not a taxi ride. You hail a taxi, get in it get taken by it and then get out,pay your fair end of transaction.

    By contrast, a property sale or purchase is a roller coaster ride and without the focus and involvement of someone committed and expert at what they do, it will be a car crash. How anyone thinks an Internet advert and then leaving buyers and sellers to coordinate all that ensues will NEVER work is simply living on a different planet.

    Our buyers  and sellers rarely have enough time in their busy days to even call us back soon enough . How anyone thinks they (buyers and sellers) will effectively conduct viewings,negotiations,chain checking, coordinate all the componant individuals involved in a transaction and then deal  with myriad issues and difficulties,all without the experience snd knowledge of the whole process, and a lack of time, simply demonstrates a total lack of understanding of the true complexities of the process. Me thanks our man has made a VERY bad investment of his £5m

     

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    1. Robert May

      “I hope he has a lot more money as he has just poured £5m down the pan” It is realisation he has and the hope that he hasn’t that is driving this bit of promotion.
      This is my game, I have been doing it long enough to be good at it and I  have enough experience to know Sir Charles  and his cohorts are going to need near on  10 fold what they have pumped in  so far to even scratch the paintwork on traditional agency let alone dent it!

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    2. Dave G

      Yes I am an agent too. He is talking rubbish we all know, but of course he has a voice that people hear and above all else he is trying to talk up his business venture, whilst trying to rubbish our industry. What you have said, we all know to be correct and a large portion of the public do know this too, but we have to work harder it seems to bring to the attention of the masses just how much hard work it takes to get a sale through. We have a completion yesterday which started on the 1st August 2014!!! My neg said he has never worked so hard for his commission. That sale would have never in a million years gone through without his input.

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  2. JWVW

    Now, let’s take a look at Carphone Warehouse…….pot, kettle, black comes to mind.

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    1. phoenix

      Couldn’t agree more. It would seem the ‘estate agent beating’ season is well and truly open. What I find the least palatable about his comments is that they came from a man who made his fortune making nothing and as nothing more than a middle man between phone makers and service providers. Fantastically successful and clearly a good business man but comparing what a decent estate agent does to either an on-line offering or the kind of service you might receive at Car Phone Warehouse is simply ridiculous!

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  3. Robert May

    How thick does a journalist have to be to report  an opinion without checking  the claimed  facts?
    The average House price in the UK is now just short of £180,000, the average agents commission is now 1.23% (ish) ex vat which can be rounded up to 1.5% inc VAT to help a journalist’s maths
    180,000 x (multiplied by)  0.015 ( that is the same as 1.5% inc VAT, check it with a grown up but I am right ) = (equals aka comes to)  £2700 not £6000- £7000.

    You can get away with billshut, lies (wrt CW Barnstaple,  Vodafone 3G coverage) and  bad maths if you are flogging  phone contracts  but in the world where people  know the numbers, know the facts and how to use a calculator, one is likely to look like a   spiv if you try to t pass this off as anything other than stuff you have made up to support your own vexatious promotions.

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  4. jmeapps01

    Well he would say this wouldn’t he! How embarrassing for him. Strange as we are doing more business than ever before. I think High Street agents are never going to be replaced by a half cocked poor quality service.

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  5. surrey1

    Just before Christmas I lost an instruction to an “online” agent as the client advised they were 10% higher on price and £10k cheaper on fee. It languished on the market for sometime before through gritted teeth I mentioned it to a client of mine with a view to completing a chain. With some assistance from yours truly it’s been agreed at 10% less than I said and 20% less than the “online” agent said. So he saved about £10k on fees and lost £100k on his sale price because they didn’t know the market and had more limited marketing. That old rope looks quite good value really.

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  6. wilko

    In my view crowd funding is really “money for old rope”

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    1. Robert May

      After 14 days crowd funding is actually money for  whatever they like. There is no obligation to spend the cash on  hemp,  those with the pitch can blow the cash on a Stag do if they want to.

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  7. Trevor Mealham

    I’m looking at changing my mobile phone. I was going to check out 02 – but they run those expensive shops in the shopping malls. Im sure I can buy online MUCH cheaper  🙂

    * High Street agents still hold a lot of value in that people see their facia boards 24-7  People don’t buy and sell houses every day – so seeing a Hg St brand whilst doing other things once – twice – three – four times a week is a constant reminder. So every few years when people need an agent thy see brand recognition. Sorry Mr D – people don’t look at agents brands on the web when they are not looking for property.

    For branding a local Hg St agent with active local boards with a local tel no wins.

    Be an agent online only – or Hg St and online, there are good and bad in both camps. My near 30 years in the game, has shown selling on service (including agent to agent B2B) achieves far more for agents and vendors than Budget Billy who a few months ago knew nothing about selling homes.

    Budget is a FALSE economy

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  8. GPL

    Dunstone? Is that the fella that shafted mobile phone consumers for years!?

    Dunstone!? …. the fella that stood in the middle of the road and passed the manufacturers phone and 3rd party mobile phone service from one side of the road to the other… where the consumer was stsnding?…. and got paid for it!

    Isn’t Dunstone related to Paul Daniels?…… wee fella, top hat, magicking things out of a hat!?

    Mr Dunstone?…. step inside a cupboard, we’ll lock the door and lets see if you can get out?

    Silly comment Mr Dunstone…. enjoy your fortune!… you were lucky to be in the right place at the right time!

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    1. Robert May

      That isn’t quite correct  GPL and it is important not to throw  virtual sticks and stones at someone like that or any of the others that are attempting to grab a slice of agency action right now.  They are actually after such attention, they want that sort of reaction.
      Sir Charles, Sir Stelios etc  haven’t ended up with Knighthoods for nothing, they were actually very good at what they did, both pared back service and frills and sold volume product cheaper than anyone else. People put up with dealing with ‘Vicky Pollard done good’ staff in Carphone warehouse to get hold of the emerging technology cheaply and have  someone  pseudo explain stuff  neither really understood.  I get my phones from Carphone warehouse, happy to put up with the chap who pongs of a deep fat fryer and gingivitis because the contracts are as cheap as the internet and I don’t have to wait till tomorrow. When the lies  turn out to be lies I have the full force of trading standards  on my side. Despite the  downside of dealing with them  I get what I need;  that wont be the case if they apply that model to agency.

      Estate Agency is different, it is not a retail sell,  sales volumes can not be increased by paring back service or service price, The market is finite and restricted to those who own or want to own a home. Sir Charles and Sir Stelios  and all the rest have  seemingly not understood that. They have not understood why 98% of vendors have stubbornly stuck with traditional agency rather than the online model which emerged with websites in the mid 1990’s. It is not possible to remove the service from an industry that is by dictionary definition a service industry and hope to charge  well over the odds for the bit that is left; listing property on  property websites.

      You carry on throwing rocks at his sorts, that is great if it makes you feel better but in my opinion you would be better off understanding what you can do to pull the legs off the internet property listing firms and those who offer a bit more but are currently making false claims about their ‘services’
      You are a keen supporter of Agents Mutual, it is important for you to understand the power of what has been put together, the power and influence is not OTM but the combine collective influence by 25% of the industry; the affinity group.
      Right now there is one thing AM ought to be doing but because the domain knowledge of those at the core is portal focused the opportunity is being missed. I have explained in some detail what can and should be done , if you  care to get hold of  Peebee, Paul H or Ric (all AM Gold members) via Ros each will be able to share  my thoughts on what the industry ( not just AM) ought to be doing to redress the balance with its service suppliers (not just Rightmove and Zoopla) but  also its competitors (which includes  its service suppliers)

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      1. GPL

        Robert May… do not get me started on the validity of Knighthood’s!….. there is no forum large enough in the universe to accommodate my views although simply put… a Knighthood doesn’t always equate to recognisable real world achievement (define that) or credibility (because someone has a knighthood they are to be looked upon as being credible in their field of business etc).

        This United Kindgom of ours is awash with hugely deserving ordinary people who have no award gongs or titles to dangle as a sign of some perceived enhanced credibility… they just get on with it!

        Charles Dunstone is Charles Dunstone…. a businessman, entrepreneur… in the right place at the right time!

        I once told a short wealthy employer of mine that when he stood on his money he was taller than me however other than that we were no different!

        That’s the thing Robert… if someone places credibility in a honorary title then they lack credibility in my personal opinion. When a “Lady” client I was selling for queried why I didn’t refer or use her title I politely said that the only title worthy of reference, other than Mr, Mrs, Doctor etc was God!…. thereafter she accepted that to me she was Mrs and I was plain old Mr…. and we got on famously well! I even got a lovely Thank You card from here after I had sold her property.

        Alas, as it is Saturday Robert I have spent too much time on here on a fruitless thread… you may call me whatever you want!… have an honorary free weekend Robert… it’s a lovely day here as I put my iPad down and decide on garden or motorbike…. garden or motorbike?…. I wonder!?

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        1. Robert May

          Don’t get you started? I can’t not!   If good people content themselves with doing the gardening or riding their motorbike those who do wrong,  lie and make false claim will prosper.

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  9. Trevor Mealham

    Robert – the game only changes when you change the way data can flow and the industry rules.

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    1. Robert May

      I don’t need or want to change the industry or the rules Trevor,  I have built a Cirrus cloud system that can float way up above the  Portals  & SAAS systems, it allows you to do your thing with MLS, it allows AM to do their thing, Countrywide, LSL everyone to do what they are good or bad at. It even tolerates Agents doing what is right for their individual business.  The people who can’t Estate Agent won’t like it but I can’t be worrying too much about that I am not here for their benefit.
      The game has changed!
      One notable quote  from a former  critic “xxxx!!! Robert, do you know what you’ve done and how powerful this thing is?”
      Quote from the most discerning (?)  Agent in any universe or dimension explored by any generation of Starship “This really does have the legs and  potential to be  the  product   for the industry, fortunately it is owned by someone who  is genuinely motivated by the good of the industry”
      The end of week  beta compile didn’t compile properly yesterday and my CKB has stuff which needs to come before me or the system to attend to.  Once I have a compiled version I will send you a beta login so you can see how it benefits you and the INEA members.

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  10. Jonnie

    So this interview lacks any real / accurate figures ( including missing the vat on his fee) says nothing about what his business will do for a customer except possibly be cheap and is all a bit shouty, is he cross his £5m is gone for good and who is he trying to convince? Himself, more semi celeb business friends?

    Anyway, who cares, but one thing is for sure if you are the public face of a budget agent then it seems you have to be a bit of an uptight sort and avoid using too much fact………2 skills all of them seem to have – Jonnie

     

     

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