It is time to go public about ‘fake’ agents, says Spicerhaart boss

There’s nothing like the personal touch, whatever industry you’re in. Nothing can replace the experienced professional who can discuss your requirements in a personal capacity.

That’s definitely true in estate agency, where a local agent can advise on what’s best for a customer, their home and their family, whether buying or selling.

It’s something that an online-only agent simply can’t offer.

In a virtual digital world, where you are led to believe that one click on a device will solve your problems, the online agents fall down the minute that a transaction becomes complicated.

We’re forever having to rescue chains because online agents wash their hands of anything that a customer isn’t paying for.

So should we even be calling these virtual assistants ‘estate agents’ – or are they just a ‘fake’? At a time when fake news is making the headlines, are we looking at the rise of ‘fake’ estate agents?

Should the definition of an estate agent be more than just someone who sells and rents out buildings and land for clients?

Surely, at the very least, it should be someone who knows the local area and isn’t based 50 miles away, with no knowledge of local prices or issues?

That’s why those of us with traditional bricks and mortar branches value our valuers.

Their experience and local knowledge is a cut above the cheap, internet-only agent. We’re not just about selling homes, we’re a people business, and we must ensure that at all times our customers, whether buying or selling, know this.

If we resort to just being a fast-turnaround, cheap business, we will fail to serve the people who put their trust in us. Innovation and technology should be there to enable our teams, not the other way round.

As an industry, we must therefore do far more to promote the people side of our business and guide our customers about the shortcomings of the ‘one size fits all’ service. If something is a cheaper option, it almost certainly is a lesser service, and our vendors will never gain.

These ‘fake agents’ will end up ruining all of our reputations and it will only lead to misery.

We need to fight back and highlight the shortcomings of these ‘fake’ agents, whether it’s offering a discount to sellers who’ve failed to get anywhere with online agents, as we at Spicerhaart do, or taking a leaf out of Foxtons’ book and running an online ad campaign that highlights that ‘With a virtual agent, you get virtually no service’.

You may not have a huge ad budget using investors’ cash to blow on a nationwide TV ad campaign, but use your PR or local ads to talk up the people side of your business.

Internet agents are simply listing tools to get a property on Rightmove, but many of these ‘fake’ agents don’t have the negotiators to actually sell a property – and the public need to know this.

What’s left in the piggy bank?

When you sell your shares in a successful, growing business to prop up your own floundering firm, it is inevitable people will be wondering what’s left in the piggy bank for next year in order to keep the company afloat.

Many eyebrows were raised when Countrywide, the UK’s largest agent, sold the last of its shares in Zoopla in September, raising £29.2m. Which is just as well, as last month it announced that pre-tax profits had fallen to £19.5m from £47.7m the previous year, i.e. down by £28.2m, with operating profits down by £25m.

Countrywide has since issued 21.6m new shares representing a tenth of its current market capitalisation, raising £37.8m before expenses to invest in its new ‘digital offering’.

But if it performs as badly this coming year as it did last year – and its own chairman has acknowledged “The company is at a critical point in its evolution” – what will it have to sell off next in order to fund its doomed ‘retail’ strategy?

Meanwhile, LSL Property Services, the parent company of 12 brands, has also announced it is exploring its “digital opportunities” this year.

It too sold off its remaining Zoopla shares, raising £36.1m in the process. Taking this into account, its underlying profit to December 31 slipped 19%, down to £34.6m, compared to £42.9m the year before.

Only Connells remains of the big three who signed a strategic partnership with Zoopla in 2010. Although it sold some shares last year, it retained some, in effect continuing to fuel Zoopla’s attack on estate agents. Talk about biting the hand that feeds you when the big agents should have thrown their weight behind OnTheMarket.

As we’ve all discovered in the rollercoaster of our profession, it’s vital to have savings for a rainy day.

Once those savings have gone and you’ve got rid of your experienced managers, combined your estate agency and lettings divisions, and cut your overheads, in my opinion, the only remaining option is to sell off your assets.

More queries over Purplebricks valuation

I’ve long queried the valuation of Purplebricks and challenged the City to help us understand how a company that has never made a single penny in profit can be valued at just under £800m?

At last, the Financial Times has issued a story questioning its valuation and noting how Purplebricks’ capitalisation is over double that of Countrywide at £388m.

It just doesn’t make sense. It’s trading on ‘hope value’ – hoping that its roll-out to Australia and the US will help these magic profits to materialise.

Are investors having the wool pulled over their eyes, giving money over to a model that requires millions in advertising to generate the sales that it gets?

The Bruce brothers who founded the business have just cashed in £17m in shares. It’s interesting to note the timing, just before the next set of financial results are announced.

I do wonder sometimes whether the business world has gone completely mad!

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  1. Thomas Flowers

    Paul, if PB fail to make a real profit when they announce their latest financials, and given that the Bruce Bros made £17 million prior to the release of such financials.

    How would the the stock market regulators view this transaction?

    As PB lost around £12 million the previous year shouldn’t that ethically be recovered from their £17 million?

    Is that not normal business practice?

    Why should a floated company be any different?

    Is so, is that not putting tradition agents at a disadvantage?

    May even be ruled as anti-competitive?


    1. g4lvo17

      Unfortunatley Thomas Flowers, the stockmarket cannot simply take the money back , they would have to instigate legal proceedings after first establishing that a crime had been commited. secondly it is quite normal for the founders of a business to cash in some shares after the business has been floated on to the market, they are usually unable to drop all their holding and normally sell in tranches over a number of years. They cannot buy or sell during a period of reporting financial results to the stockmarket called the “closed period ” , apart from that they can sell at any time they please even if they are making losses.

      1. Thomas Flowers

        This ‘closed period’ of two months as below does not make sense to me as investors may not have the same opportunity to assess performance?
        Does this really level the playing field?
        £17 Million share sale announced 17th March, year end 30th April……less than 2 months?
        Therefore, unlikely that the results shall be published before May 17th?
        DEFINITION of ‘Close Period’
        The time period between the completion of a listed company’s financial results and the announcing of these results to the public. The close period is typically regarded as the one-month period preceding the release of a company’s quarterly results, and the two-month period before the release of its annual results.
        Read more: Close Period Definition | Investopedia Follow us: Investopedia on Facebook

        1. g4lvo17

          All very true Thomas, but I’m sure they have checked the dates to make sure they don’t flout the rules 

  2. B6RKY

    Do you mean E-fake agents 🙂

    1. Bless You

      Its Righmove and Zoopla who should be policing the #fake industry. 
      Online only is very stressful for buyers. 
      This alone is like allowing private sales on their portals. 
      I am sure rightmove would prefer 7000 estate agents paying £1000 rather then a few onliners paying a few quid per instruction. 
      It is for the portals to say.,’no office = no service…get lost’ 
      Even holding a something an online agent struggles to do..they are no good for anyone but the seller..and jury is out on that as well. 

  3. JAM01

    A very good article. Perhaps many of the issues described regarding lack of local knowledge for most online agents will be overcome by Countrywide selling Online only for £995 from their High Street Branches.

    if this Option succeeds, they will have to generate up to 5 listings to generate an average fee for our area, and that is a tough ask.

    if it fails, then they have their full service option to fall back on, but that has already failed.


  4. Keyser Söze

    Don’t Google Fake Agent…

    1. NewsBoy

      I couldn’t resist it.  Oooops!

  5. StanLaurel35

    So did i, bought a Potnoodle and now having the afternoon off.


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