You turn your head for two weeks and the world changes.
Grenfell Tower, Brexit talks start, and The Guild cosies up to easyProperty.
The latter doesn’t move the dial in the same way that either of the former does but, with one big caveat: anyone who simply dismisses it out of hand may be missing the point.
I’ve written elsewhere that you simply can’t ignore the tens of millions being spent letting Joe Public know that there are other ways to market your home than through a high street agent.
I’ve deliberately not said “sold” as the jury still seems out on actual performance.
To hear the biggest online outfit saying they don’t release that data because their peers don’t is stretching credulity to breaking point.
But I do wonder if the way the selling public appraises and then chooses their agent is changing.
For as long as I can remember most potential sellers will get three agents round – a local, a national and someone in between. Anecdotally it would seem that many now at least flirt with the idea of an online agent as the third and will have them look at their property, just to see.
The implication of this is that unless as a high street agent you have at least some kind of direct offering you may be missing out on getting your foot in the door.
Anecdotally, it seems that for some, offering both a direct and full service could be working. The fact that local sellers know the agent offers a direct service is getting them through more doors and then enabling an upsell to full service.
Indeed the vast majority (>90%) of those who talk to a local agent offering a “direct” service seemingly end up selling on full service.
Given we know an agent’s real work starts at the offer stage, this would seem to enable local agents to simply cover off both angles to best advantage.
Independent agents often struggle to answer anything technical for reasons of cost, and who is to say that IF the Guild’s members, all independent local agents, can get their heads around working with easyProperty, they could have an immediate entrée into what may be one way agents will work in the future.
I have always been a little worried of the online only option.
However I can’t help but think the bubble is already bursting.
The majority are still to make a profit, they are finding it harder to raise funds.
Despite the blatant mad up positive reviews online and the suppressing of negative ones. The public are starting to learn the pitfuls and are warning others.
Just this week we have been instructed on 2 properties which were previously on with an online only agent. The service and advice they received is shocking.
Those 2 fees alone will raise me 10k and the movers more than happy to pay it after their experiences.
I for one will not be offering a cheaper alternative. If we do this as an industry it is a race to the bottom.
It’s a fad and the public are already seeing through it. Hold your nerve and your fee offer exceptional service, support and advice and you will be fine.
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I don’t think you can say fixed fee online only is a bubble that is bursting based on 2 sellers switching hats.
Sellers switch high street estate agents daily and they don’t switch because they think they have received good advice and service.
Without a doubt there will be casualties amongst the onliners but I doubt that PB will be among them. PB are following a well proven path to dominance in a new market by spending far bigger than the competition to become the recognised brand in their sector.
Other onliners currently spending big on marketing cannot sustain this without massively increasing instructions to become profitable.. PB know this, and all PB have to do is stay the course with their far deeper pockets and the competition will inevitably fall away leading to an ever increasing share of online for PB.
As for PB proft; whilst PB aren’t in the Google, Amazon league both of these companies failed to make a profit for years whilst they persued the same market dominance/bulldozing the competition route that PB are following now.
Both Google and Amazon were supported by massive investment during the non profitable years with the knowledge that market dominance comes first and profit second.
PB are still a very very young company but they have recruited seriously experienced management and they will be evaluating and evolving the business rapidly on a daily basis.
In my humble opinion PB’s effect on our market place will only increase and any agent who believes otherwise is taking a big risk with the future profitability of their own business.
The strong and efficient local agent will always survive, it is the others who are less so that will be most at risk.
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I am not naive enought to base it on 2 sellers switching.
Depending where you read the “Online disrupters” have between 3% and 5% market share after almost 5 years of promising they will send full service agents into retirement (some even holding funerals).
Russell Quirk (despite what people may think of him) has been a prolific fund raiser and now it seems he has hit a brick wall.
Easyproperty fell flat on its face and as such had to purchase a high street chain to prop up their investment.
Yopa despite spending millions on advertising has not even made a dent in the market.
The only online lister to appear to do well is Purplebricks and this is down to a very clever stratagy of listing the firm, Selling the properties (sorry listing the properties) is a by product. PB is an invesment vehicle. And they have been very good at doing what they do to make money.
Long term PB cannot be sustainable, the margins are just not there. They cannot keep pumping millions into advertising for another 5 years making losses.
Also remember if PB (or any other company) gets to a point where they are the place to go RM will step in and become a listing agent themselves. Before you say that will not happen take a look what has happened in the states with Zillow.
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The way I see it is that PB are like a new plant or animal introduced into an ecosystem where they have no sizeable predators or rivals…..a bit like Japanese knotweed. On top of this they are being given free range with their marketing and advertising claims with no public counter information.
Obviously we will all see how well they are doing with the annual results being released tomorrow. I fear the TV adverts have worked really well for them, as to the general public it appears PB will sell their house for free!!!
We all have our livelihoods at stake here. There is lots we can do to start the fight back, if we do what no one believes is possible…., we form a collective for the purposes of counter intelligence whilst maintaining our own individuality.
It can be done. Why! Because the small group of us so far know how. So if you are interested in joining IN (Ideas Network) at no cost whatsoever then let us know.
IN@agentv.co.uk
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We certainly live in interesting times.
It is worth bearing in mind that the change to fixed pricing has already occured with conveyancing lawyers. It is now unheard of for lawyers to charge percentage fees other than at the top end of the market.
We believe that the fixed price model is definitely making inroads in agency based on our experience with hybrid agents (albeit in the London and home counties market).
Whilst we have seen attempts by online agents to get involved with progression activity, it is very early days for some of the bigger names. Indeed, we suspect that they will get bored of this, but, in terms of fees and service, change is most definitely happening.
Just to be clear about service – this is not on the sales and marketing side where the change needs to happen but on progression. We had a major agent chasing us continuously over the last three days only for him to trip over his own laces yesterday when it became clear that he’d not checked the immediate onward. Suffice to say, they weren’t ready and he had wasted literally hours of our time and upset his client in doing so. Service means understanding what is affecting the transaction and how to solve it and this is where we see many agents missing the mark.
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We have made a complaint to the ASA about several published claims by PB. on the basis that they were misleading the public. Their response was, that this was an inter firm spat and we should contact the competitor firm first, Farcical as this was, we wrote a personal letter to the CEO, Michael Bruce, but to our not inconsiderable disappointment, we didn’t receive a reply. We have therefore gone back to the ASA for a response. We know how weak the system is, but what else is there to protect the public? The usual action, even if they find in our favour is to ask them to ‘desist in their claims’, perhaps in 6 months time? How many will have been mislead in the meantime. Any suggestions would be welcomed? Basically, if you are not too scrupulous or honest, it seems you can claim anything you want and get away with it for up to 6 months, profitable for business!
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Cardiff Agent
Try an anonymous letter to the ASA with the attached customer reviews link:
https://www.allagents.co.uk/purplebricks/
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The only chance you have is targeting disgruntled customers, and let them raise the issues. They are the only ones the ASA will take notice of.
Also would the Competition and Markets Authority be more interested in anti-competative practices used to gain business by misleading the public?
For the future, monitor the ‘online lister’ listed sales in your area, changes in price and completed sale prices. This data could be key in a system being developed.
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