An online agent has sent out a warning – about other online agents.
The accuser claims they are ripping sellers off.
Houses.co.uk, which offers packages from £395 payable upfront, says some online agents are offering apparently cheap prices which are not what they seem.
Houses.co.uk, based in Leigh-on-Sea, Essex, advertises properties on both Rightmove and Zoopla, and while it named no names, it could appear to be having a pop at a rival online agent which also lists on both portals.
Houses.co.uk founder Russell Bennett said that vendors looking to save money by using an online estate agent should be aware of the “common tricks that could more than double the headline cost of selling their home”.
He said that most online agents charge one-off fees of £350-700.
“But there are some who claim that they will sell your house for as little as £95. If you think that sounds too good to be true, then it could well be,” he warned.
“Typically, such a low fee will just cover the cost of a listing, with extras such as For Sale boards, EPCs and floor plans costing more. Some online agents charge as much as £35 per viewing, while others do not include sales progression in their basic packages.
“Most online agents offer a variety of packages, so my advice to sellers would be to thoroughly check exactly what you’re getting with each package. Look out for charges per viewing or extra fees upon sale completion.
“We like to think that we are upfront with our customers and try to save them money wherever we can. We advertise clearly what’s in each package and that’s all you pay, plus all our plans include sales progression.
“As with any online industry, it’s a few rip-off companies who damage the reputation of the whole sector.”
It is not known which online agents Bennett had in mind when he launched his attack.
However, in Beckenham, Kent, Wesold.co.uk charges £99 in upfront fees and then £35 for every completed viewing.
According to its website, this is up to a cap of £420 or the equivalent of 12 viewings. After that, viewings are free.
When Wesold.co.uk launched last year, founder Tom Harrington said: “I spotted a gap in the market. Online estate agents are fine, but the difficulty is that sellers can pay money upfront and get absolutely nothing back.
“We charge a lower fee upfront, but then make a charge for viewings, demonstrating that we really are working for the client.
“We believe all agents should sell property on a viewing basis and were astonished that this concept had not been introduced much sooner.
“We believe in results and it’s clear that the first step in selling a property is to get interested parties walking through the front door to actually see the home in person.
“It’s for this reason that our pay per viewing model is so relevant and so attractive to sellers sick of forking out thousands to traditional agencies or paying hundreds of pounds upfront to online agents with no real proof of how effective the agent’s marketing packages will be.”
This looks like something on EAT, should have let them run it..
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I disagree, Paull.
1 – they haven't, so it would simply be bimbling about in the ether.
2 – different audiences will offer different opinions.
3 – HOW the content is presented defines reader responses.
EYE are on the money to cover these articles.
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Histerical. A budget agent not happy with cheaper budget agents. Shame. The big fear is that if an agent can't negotiate a proper fee, then when an offer comes in what poor price will they get for the vendor.
And any vendor who pays a budget agent upfront could find its costly as most respectable agents work on the basis that if they don't sell – they don't eat.
With proper fees a traditional (be they online only or Hg St + online) can do far more than the budget boys. More comm in the pot allows more working funds to do a better job which normally results in a better price for the clients.
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Trevor, im not a budget or online agent but what you said at the end ,in my opinion, is nonsense. Using that logic "When Rightmove and Zoopla charge bigger fees than Agents mutual, more comm in the pot allows for better working funds to advertise to attract potential vendors and landlords results in a better service for the agent… Feel free to explain to the difference .I think youll be hard pushed to explain that reasoning in the front room "my commision pot is bigger therefore I can spend more money on stuff for you … " Im sure they would prefer to hear here's my track record of selling houses in your area, would you let a mechanic service for car for a tenner and expect a decent job ?
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It is not difficult to imagine the possibility of someone mimicking this charging structure and then having a team of viewers paid cash in hand to look round property.
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Click on the 'Get Started' button, the portal logos are all blurred, enough said!
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I see that most online estate agents quote prices excluding VAT, when most homeowners have to pay these fees why is this? 'Let the buyer beware' should also account for published fees.
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“We like to think that we are upfront with our customers and try to save them money wherever we can." (You can just see them all sitting round a table thrashing out ways to save their customers money.)
So often we see this type of hype: "trying to save you money". Do they seriously expect people to believe the reason they set up shop is "to save people money"? Very strange, I set mine up to MAKE money.
Sorry Houses.co.uk, this is not a personal dig at you – I've never even heard of you before today – I just get fed up with this new catch-line that gets banded around. It insults the intelligence, but I suppose it must be working for you in attracting (certain types of) customer.
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@ Danny. Hi Danny, let me explain – What is your stance in estate agency?
Okay – starting in your words which wouldnt be my intro – but:
'' Mr & Mrs Vendor – my commision pot is bigger therefore I can spend more money on – increasing exposure of your property on a no sale no fee basis – I could offer sole agency but in your situation (there are approx 7-8 motivated reasons people sell) I can do more for you if you would let me broker your home. As 3 in 4 people move locally by sub instructing agents W, X, Y and Z I can hit more applicant registers than our register alone. Also some of my fellow agents have offices in other locations, some do newspapers still and together we can market your home on more portals and other places. Our track record is that we sell 40%-50% via sub agents and in doing so may achieve a better price, faster or to more solid buyers. Many of our sub agents may have close relationships with their sellers and as such can often sway close clients through another agents clients properties door, simply as trust has been established over us an agent that your potential buyer has not yet had dealings with''
Danny – when one agent endorses another – its better than agents competing and saying to prospectinve buyers '' no you don't want to view that one because''
RM and Z are the UK's 2 biggest sub agents. as such for the last 100 years sub agency has been the biggest contributor to UK house sales. A sub agent takes a sub fee for introducing applicant buyers to the main agent. RM and Z take an ongoing sub-scription for introducing applicants.
RM and Z are just marketing windows on the web. I hope AM does win over more agents and fragments the portal stronghold. But above all, with stronger commissions main agets can reach applicants via B2B that maybe they wouldnt have had influencing access to. If a property is £200k and the agent achieves that at 1%, then if more offers are achieved via a main agent having sub agents at say 1.5%, then what would £205/210 be worth to the seller. Higher fee, but vendor gets more. Its just old fashioned main agency.
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Some good comments Trevor and I appreciate your point of view.The only lapse in your strategy is that c95% of my enquiries come via the internet channel to start with. I can work in these into a viable applicant database but turning off the tap turns off the list. I got brand new carpets about 18 months and they are still pristine, not like the old days where people would be trudging in shaking off their brollies. The simple fact is that vendors dont care if you can tap into a network of like minded agents that have access to a buying database, they want you on the main players on the internet because that mirrors they journey they are taking themselves as a seller, ease of use for them is important …
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Which part of the world are you in Danny? I only ask because that is the polar opposite to the market around here. Old school still seems to be the go and some vendors and applicants are not aware of Rightmove.
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Budget agents shouldnt advertise 'saving clients £1,000's' As mentioned budget agents don't have enough in the pot to do what higher fee charging agents do. As such only being able to offer a 'less' service questions the ability to do more.
BUYERS BEWARE – BUDGET AGENTS ARE LIKELY TO ACHIEVE FAR LESS THAN A TRADITIONAL (HG ST OR ONLINE) AGENT MODEL.
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ALSO
SELLERS BEWARE – BUDGET AGENTS ARE LIKELY TO ACHIEVE FAR LESS THAN A TRADITIONAL (HG ST OR ONLINE) AGENT MODEL.
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It is a race to the bottom.
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I can't help but have a little sympathy with the bonafide "online" agents and I'm glad that some are highlighting the dodgy practices of others .
I believe most posters here could set up from their home tommorow ,charge around £500 to sell a property (whilst the market is good) by advertising on portals. We would do exactly the same as we would do as a high st agent but we wouldn't have the overheads. It would not make us bad agents and it would be fantastic value for money for my clients, and profitable for us.
I believe that our customer base still likes to know that we have a network of offices that are visable, but I am very sure that future vendor generations will sell through a budget model.
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It seems Houses.co.uk believe that only their pricing structure is reasonable. High Street agents are too expensive, people who undercut them are too cheap.
As regards pay per viewing, I just don't get it. Imagine a vendor desperate to sell, and you have 5 applicants and only one fully qualified and in a position to proceed who was just let down on the property next door. Should I go for £35, or show my red hot buyer last? And where is my incentive to get the best price and manage the sale? A fall-through is no good to me, but the chance of more viewings after an aborted sale looks promising.
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This isn't an article about pricing Eric this is a bit of "Frogger" SEO. How does an online Agent get the publicity they want without running the gaunlet of Irking traditional agents? Simple make a pitch for the middle ground, have a dig at the cheap uneducated spivs in the hope avoiding a Peebeeing.
This is genuinely daft pricing model as it is so open to abuse. I reckoned on about £12 cash in hand /viewing , 2 viewings an hour? The DSS and nosey neighbours are unlikely to spot this one as a lucrative sideline. A professional viewer could quite easily fit this in between dropping the kids to school and picking them up @ 3:30
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"…avoiding a Peebeeing"??
Oh my word – I am now an adjective!
Mind you, the chap hasn't exactly raised his head above the parapet, has he? Fired off some badly thought-out PR ******** (which usually only makes 'print' on sites such as EYE…) in order to fluff up the feathers of the site. They have FIVE properties on their books – so they clearly need all the help they can get!
Not exactly in a position of strength to belittle the competition (which is in any respect the most unprofessional way of trying to drum up business – whether you name names or not…) in any way, shape or form.
Mr Bennett – IF you are reading this – you wanna let the readers of EYE sound you out?
I, for one, would like to give you a PeeBeeing…
(thanks, ampersat – I like that one… 😉 )
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No No Peebee you are a much higher rank than that you are now a verb.
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"…you are now a verb."
Oh joy… fame at last!
I remember them well – "Watch with Mother", wasn't it?
Parsley the Lion was my favourite. Oh – not to forget The Chives, though… 😉
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I think you've coined a new word there Ampersat, 'Peebeeing' do you think we'll see it in the OED next edition? 😉
On the topic of fees, payment up front etc…. the real 'traditional' model is not no sale-no fee, but a marketing figure agreed up front and a commission on completion of a successful sale. This was the norm, certainly in this part of the world until the beginning of the eighties, when Owen Oyston started offering no sale-no fee as a marketing ploy across his chain in Lancashire, and it spread like wildfire.
I've always maintained that no sale-no fee is a complete nonsence as a business model (I think from previous exchanges that I won't get Peebee'd on that particular point 🙂 )
Pay per viewing is a definate no, as has been pointed out, it would be wide open to abuse, but there would be some milage in a return to the 'real' traditional model of an up front fee and smaller commission on completion. From the inside perspective, better cashflow, earning something on every property you market, increased customer loyalty, and the knowledge that your sellers are serious and not just testing the water. And from the client's point of view, a fairer fee, and not paying for abortive work done for someone else. For the industry as a whole the advantage would be that there would have to be an improvement in standards, as the client would expect to get what they are paying for.
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You are absolutely right that traditional Agency has to charge for services that it gave away under NSNF. What is the point of having unique skills and experience if one simply gives that away to compete in offering the cheapest service?
More than the fees charged by Rightmove and Zoopla it is fee erosion caused by the use of Rightmove and Zoopla that has to be halted and reversed. Most Agents have not worked out that Online Agents are wholly reliant on the online valuation tools as an essential tool of their business. Confirming to a vendor what the vendor has already looked up on the internet is not a valuation, it is not advice on value it is nothing more than Spivery.
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Amperset….Are you sure that all "online" agents are wholly using online valuation tools?
A number of models I have disected send a valuer to the property as part of the service, the same as us traditionals.
The problem is that you are like many others …."tar them all with the same brush" There are probably as many good "online agents" as there are bad "traditional" agents. I know you are a professional and therefore cannot understand why you would make such sweeping incorrect comments about the "online" model. Unfortunately, responses like that create the "bun fight" that many newbies are looking to have with us "traditionals". It is important that responses to the new style of estate agency are measured and not rash.Otherwise, we are playing right into their hands…..however good, bad or indifferent their services are.
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Hi wilko – a couple of points in response to your post above if I may…
"A number of models I have disected send a valuer to the property as part of the service, the same as us traditionals…"
Hmmm…. yeah. IF that's what you want to call them. Take one company for example – no names. They have on their website two "branches" – one in Scunthorpe; one in Gainsborough. Distance between the two town centres is approximately 15 miles. Scunny has at least 11 Estate Agents with branches (RM Branch Listings – Sales only), Gainsborough has 4 or more. But this online Agent – whose name doesn't figure in the branches I am quoting – proudly announces "Are you in the [just add place name, apparently…] area and looking for an experienced LOCAL property expert to help you sell or rent out your house?"
I wonder just HOW "local" they actually are? And how much their appraisals rely on online valuation methods and tools, not LOCAL knowledge and experience?
"The problem is that you are like many others …."tar them all with the same brush"…"
Would that be in EXACTLY the same way that they are "tarring" US, wilko?
"There are probably as many good "online agents" as there are bad "traditional" agents."
I doubt it. I hate to say it, but I wouldn't think that there are enough online Agents FULL STOP as there are "bad" 'traditional' Agents, mon ami! Your point, however, is semi-valid. I have no doubt that there are a good proportion of those working in the online model whose intentions are to offer great service and get results – but in my humble but honest opinion their model has gaps in it that simply cannot be plugged by slapping a property on a portal or two and I am afraid that NO-ONE will ever convince me otherwise.
Okay – buyers' habits have changed… ARE changing… WILL change – I readily accept that. But at the end of the day, every person who puts their hand on my office doorknob is justification to me that we dinosaurs of the property industry are offering something unique that the onlines SIMPLY CAN'T OFFER (actually, they COULD – they just CHOOSE NOT TO cos it's cheaper for them…).
Over to you – and whoever else – mon ami… 😉
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I'm not advocating the 'cheapest' service Ampersat, but a fair fee for sellers, it would be the 'unique skills and experience' that would justify a seller parting with an up front fee on that basis, hence my parting statement that I believe this sort of fee model would lead to an overall improvement in standards.
According to many commentators, the public expectation of estate agents is pretty low, and they all think that the fees now are a rip-off so an arrangement where they get what they pay for may also improve the public perception of the industry.
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This public perception of Estate Agents is a bit anecdotal, I have never ever had a complaint from a successful vendor, buyer, landlord or tenant, not one. The reckonings of comedians, competition, the media and Joe Blow really are of no matter or consequence. For those folk who don’t appreciate the value of a genuine Estate Agent there is oodles of choice and I would thoroughly recommend such clients use them.
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Hound – I have to agree with ampersat. The "commentators" you refer to are commentating for a reason…
Question, my friend (well, several, actually…). IF you were to offer a service WITHOUT the confines and cost implications of the current NSNF model,
1. how much/what percentage do you think you COULD reduce your fee by?
2. how much WOULD you reduce it by?
3. How much in your honest opinion do you believe doing so would change the public's perception of you (us, if we were ALL to follow your lead) as Estate Agents?
I look forward to your response.
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Oh – and remember, as far as the NSNF model goes I'm with you all the way – so I'm not simply baiting traps here for you to walk into! 😉
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@ Danny – Danny. Question, How many times can you sell 22 The Green and how many times can you let 15 The Oval?? Ficticious names, but as a fact I know if the prices are about right and say you have 20 listings. You can only sell any property ONCE when that time on the market.
If you get 20-30-40 viewers, you can still only sell any property once?? But you can pass redundant leads to other fellow local agents who maybe have 18 the Oval or 29 The Green.
A redundant lead who offered but didnt get one of your other listings could generate revenue for you as a sub agent on another agents listing.
Im seeing more agents in london with 12-25 listings who don't do RM and not all do Z. Partner to promote other agents listings that may not be on portals that you do – and you would earn more. Vendors do pay for extended service. They don't have to be your direct clients to still earn from another agents sale.
Also advertise other agents listings in places (be it backs of buses, other portals or office locations) that a main agent isnt in – and your phone will light up. 3 in 4 callers are likely to have a local property to sell and by collaborating with other agents – guess who gets more potential clients calling them.
I learnt this subbing system back in the 1980's from surveyors. I opened my own offices pre the tinternet and worked with other agents to increase what we had in the window and newspapers. The other agents funded other office locations and other papers. In the 90's recession my profit went up 41%. Be it portals, papers, Hg St office or not. Collaboration and aggregation is a winner for the B2B agents who compliment other local agents rather than compete. Whey have 20 listings when you could have 120. it makes selling suddenly very easy.
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For any members of the public: If you want to gain the best offer and buyers for your property use a proper agent be they Hg St or online.
The BIGGEST FALSE ECONOMY is to use a budget agent who takes a low fee upfront. Is likely to then not worry as they have your funds. Only promises RM or Zoopla. If a budget agent can't negotiate a decent fee from you, the they are unlikely to be able to get you £1,000's more that a proper agent COULD ACHIEVE.
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We really do need to all get over this myth that only a 'proper' agent can achieve the best price. Achiving the best price is all about how the property is marketed, and the level of interest it generates. There is no evidence that an online agent will achieve a lower price than a high street agent.
Presumably then Trevor, you believe it when Spicer Haart or Countrywide tell you that because they are a nationwide chain that they can achive a better price than the local quality independent?
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"We really do need to all get over this myth that only a 'proper' agent can achieve the best price. Achiving the best price is all about how the property is marketed, and the level of interest it generates. There is no evidence that an online agent will achieve a lower price than a high street agent."
Well put Hound.
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Actually it is mathematically possible to prove the likely hood of a local agent outperforming an online one. In terms of evidence it is down to each individual agent to gather together the stats they present at every appraisal as invariably for every online agency competitor they have 49 traditional competitors they must fight for each instruction.
It is probably enough of a statistic that after 15 years of online agency only 24,000 vendors in the 1,200,000 who sell each year think the cost savings and benefits of an online Agent is worth the frankly unknown chance that they can, remote from the selling area, achieve the sorts of sale prices demonstrably achieved by Local Joe and Co.
What’s is great about online agency around here is the fact that to date not a single solitary property has been sold by an online Agent. It is not because they haven’t had the properties, applicants or the applicants interested in the properties. I am afraid guys 30 years of dealing with all manner of new competition means there really is nothing new and it is all too easy to show other career choices seem far more lucrative than Real Estate Agency.
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'Actually it is mathematically possible to prove the likely hood of a local agent outperforming an online one.'
I'd be very interested to see your maths Ampersat.
What part of the world are you in? Can you be absolutely certain of your final statement that 'not a single solitary property has been sold by an online agent'? Where I am, they are by no means prolific, but there have been a number of properties sold by online agents
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As I use the maths to win instructions I will hardly be wanting to share it with you. But a smart chap ought to be able to work out how relying on a defined section of the market restricts the full coverage of both supply and demand and with that so restricts achievement
In at least half of all the years I have been doing this, new competitors have popped up with sometimes very well funded campaigns to see me bankrupt. Running through the corporate list, Prudential, Woolwich, Black Horse, General Accident, Halifax and Countrywide. Then there have been the Cord and Brogues boys plus a host of independent financial advisors and Mortgage firms even large supermarkets, successful overseas realtors and franchise groups. This past few years has been Online agencies (15 years since I saw off the first one) and now passive intermediaries who are exempt from even basic levels of business acumen. It must be terribly galling not to work out how to win market share away from people like me. We have now seen every possible Baldrick cunning plan thrown at breaking above a 2% market share and above the quite laughably low £1000 fee barrier but somehow none of it works. Just revisiting Steve Clemo's attempt at mature debate how can fat, baldy, comb over, impotent, losers like me out perform the latest breed of competitor by a factor of 50:1? It just does not make sense especially when the general public are quite happy (as in this case) to pay me over 6 times as much to be not very good at my job. Every single insult ever thrown at us traditional agents is turned on its head by asking why we are paid so often and so well.
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Trevor, like you, I remember a time when we used to sub other agents, but do you really think that in this day and age, Mr John Smith who might have bought 22 The Green will not already have seen that 29 The Green is on with another agent, so are they really likely to part with some of their fee for you introducing Mr Smith, who probably saw both properties on Rightmove, and probably arranged to view them both anyway.
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@ Hound. I had 2 offices that were very successful and I had offers that were too good to not take.
I worked often with 10 other nearby local agents per office. My pitch to win over the corporates was that 3 in 4 people move locally. As such as a main agent I could hit more people moving lo ally through 10 nearby offices over local corporates with 1-2 offices.
My pitch would ask vendors where they lived before and were going to. 10-20 offices under me won most times as vendors brought into the clout over greater local exposure rather than a 1000 national offices. So hound local agents like you became my premium product and we became theirs. My typical access to stock was own and sub props of around 120- 140 listings per office.
Wilko. I never defined online as budget. I know online agents who charge premium fees and win on extended exposure.
Not all agents see the need to do RM and Z when other agents are on them who collaborate.
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Trevor, I've seen that work in the past, 13 years ago, I managed an office for an agent who was part of the Team network, and it was a system that worked well for us at the time, when we still had a good footfall through the office door, but my point is, would it work as well now, several years down the road, and the vast majority of buyers starting their search on the internet, and therefore seeing everything that is listed in their chosen area in one fell swoop.
although you told us what your pitch was, you did not actually answer the question I asked, 'do you believe it when Spicer Haart or Countrywide tell you that because they are a nationwide chain that they can achive a better price than the local quality independent?' It's the same principal as saying that only a 'proper' agent will achive the best price.
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Open request to Rosalind Renshaw
The comments above relating to your story are brilliant, Ros – and I would suggest warrant further coverage.
Yet again, your bringing to light of what is not necessarily "news" – but is being put out there for general consumption for what are often questionable motives – allows us to not only be aware of what we are up against and what is being prostituted around behind our backs, so as to speak, but also to put forward our own opinions as to the claims that are being made.
As has been previously pointed out, stories are added so quickly to this site that they rapidly become 'yesterday's news'. I would respectfully suggest that somehow EYE put issues such as Fees, NSNF business model, 'online' vs. 'traditional' etc under the spotlight – and let's see what comes as a result.
How's about it, Ros? 😉
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We are working on how to keep popular stories on the first page. We also need to make various other tweaks, so that stories do not fall into the archives with quite such a thud! Please bear with us – and further suggestions for improvement are very welcome. We are aware that we haven't got there yet and appreciate feedback.
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Don't get me wrong, Ros – you have done a great job to get EYE where it is so far, and I am light-years from complaining! 😉
My point is more related to something that 'ampersat' brought up a while ago (and has since been relegated to the Archives – hence to be referred to as 'Exhibit #1'…) – that what is 'right' and 'wrong' about the industry both show up next to each other and we all debate/argue/gnaw at heels but then we lose track (or just interest?) and start all over again on another (almost identical) thread.
I would suggest that, rather than keep popular stories on front page, which will reduce the impact of "today's news", you look to a new "Property Industry Matters" section alongside, or even within, the Archive. Maybe even one that individual Members can customise – a 'favourites' page?
Your site: your call! 😉
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Ampersat, you are a tease! If you can prove 'mathematically' that a 'proper' agent can get a better price than an online one, please don't be coy, do tell us. It's a topic that has been the subject of endless debate, and your mathematical proof could end that debate once and for all, and give us our lives back!
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98% of the selling public believe that a traditional agent is worth on average £2625 plus VAT to get the best price for their property, 2% of the selling public think that paying a not very easily obviously calculable average internet listing fee (about £750) with no guarantee of selling is the better way of selling their property. If this was the £1,000,000 question on "Who wants to be a millionaire?" The question is "what is the most likely method of selling your home for the best possible price?"
You have just gone 50/50 with only two options left; Online Agency or Traditional agency, still unsure of the answer but with two more life lines still available you then asked the audience and the reply is coming back 98% traditional 2% online are you really going to need to phone a friend?
Guys this is a bun fight, I didn't start it but I do have plenty of buns!
The full blown calculation is a sound and recognised statistical calculation with multiple published stats but reading what Professor Eggwell Fried & Co posted the other day I am thinking of using it for a Phd thesis.
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And there I was, thinking that you were going to come up with actual PROOF, not just what the public think 😉
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Come on Hound you know you would struggle against that presented as fact, besides it is enough for a conviction. 😮
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Work out who I really am and I will explain the Dipoldocus theory of property valuation,
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And in other "online" news;-)
Purplebricks, having now taken on only 100 sales properties since it's exception is now stating on it's website that it will refund fees if they do not sell the property within 6 months. If they are so confident that they will sell, why not take the fees on completion?
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On the other side of the coin Paul, Purplebricks will probably tell you that taking on ONLY 100 since their launch 6 weeks ago is not a bad start!
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Hound….
Theyre target pitched to potential investors was apparently 15,000 by end of July.
They are (pardun the pun) clearly already bricking it!
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Playing devil's advocate Paul, their website now shows 125, all in a fairly tight geographical area along the South coast. I'm guessing that's where the initial thrust of their publicity has been, I've certainly not seen any where I am in the east.
hyperthetically, just suppose a new high street agent had opened new offices from cold in the major towns across that stretch of the south coast, would they have attracted 125 instructions in the two month period since pruplebricks went live. Personally, I doubt it.
If they roll out their marketing and publicity nationwide fairly soon, their apparent target for end of July starts to look as though it might be achievable!
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PaulH I know you don't work for P*********S but why do you keep on about them? They aren't a threat to you so why not simply ignore their existence? The unhappy and disgruntled ex-staff of Purblebricks are now posting how all the Purplebricks’ spin and hype isn't all it is cracked up to be. A lot of effort is going into SEO but unfortunately the attention to detail is missing; the internet suggests the minimum price for selling a house is a figure £310 lower than their poster adverts. As a potential vendor I would be miffed and suspicious if the cost of the service more than doubled between booking a valuation and being asked to sign up.
Me being me I have run the figures on their business model just to see if they have come up with the Holy Grail of Agency, The holey reality is that even if one of their self employed? minions earned every penny of the charge to the vendor the would still only be earning 91% of the commission they would expect to receive as a junior neg in a firm paying minimum wage topped up with commission. Call me old fashion but I think the level of staff they need to attract isn’t going to be the sort of person who would be happy working for an income 9% below that of a junior Neg but moreover isn’t going to be the sort of person whose status in life is pegged down to that of new entrant to the industry.
This was posted elsewhere by someone with the inside track and does a great job of vocalising the resentment of an Agent who I am guessing obviously didn’t think things through before jumping out of possibly a senior neg or manager role abandoning *** years continued service, xyz perks and benefits and £*** income in the hope of grabbing a big fat slice of the promised action.
"Wait until you see the group of scam artists behind this, they have set up many a foolish ex estate agent like myself, drawn up contracts (CEO Michael Bruce has owned law firms before) that leave all self employed agents with no basic, without a leg to stand on when it comes to purple bricks taking back the territory original offered once that persons time and effort has gone in to build up anything that the general public actually buy into. Purple bricks are using up and letting people go in huge numbers to try and get this mammoth task off the ground, the aim of purple bricks is to get as many homeowners on board as quick as possible nationally (tv adverts are about to air) and float the company before getting out as I'm sure anyone would guess this isn't a viable long term idea, someone will always do it cheaper and make it easier, these guys are not even targeting customer service as a reason to use them over any other cheaper online agency as they outsource all there customer service issues to a sub contracted call centre (they are calling them central property experts) they haven't a clue about property, property law or anything they are suppose to be an "expert" in, these will be the people dealing with the sale (legal matters included) of the majority of people's most valuable personal asset. Luckily I managed to get out before investing too much time and money into purple bricks, others are not as fortunate as myself. They have all the media teams on board to make sure comments like this don't stay around for long so tomorrow this will of probably disappeared. Concept and software well constructed! Management and strategy very dangerous"
In an attempt to bring this post solely away from P********s. I think anyone considering jumping out of a salaried position in a sector that is 98% dominant in selling property would have to be a little tapped to take up a franchise or self employed position with any of these online house listing organisations in the hope of making more money. Tempting as it seems just like all the wonderful opportunities that have gone before the maths doesn’t support the dream. Would all of the General Portfolio retired by 45 millionaires please stand up?
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"PaulH I know you don't work for P*********S but why do you keep on about them? They aren't a threat to you so why not simply ignore their existence?"….Fair point Ampersat, I just don't like the way they do things, I shall leave them to their own demise!
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Not at all, but only use their full name when it is in a context that suits you. Use their full name as much as you like when it is associated with the stuff they don't want exposed, don't use it if it helps their rankings.
One of the interesting stats is how much of their income comes from selling property, how much comes from listings that never sell. If Purblebricks earn more money from listing but hardly sell any of the stuff they list that is something you ought to have to hand if you come up against them.
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Morning PeeBee, quite happy to answer your questions, we are in fact doing it, offering our clients two fee options (not quite brave enough to go down the up front fee route totally 🙂 )
one option is a strict NSNF, the other is an up front fee of £299 + vat and 0.75% on completion.
We're finding that the up front fee option is proving popular, and is the chosen option for the majority of our new instructions. The public perception is that it very much that is a fairer way to charge, as they are contributing to their own marketing and not picking up the bill for those that don't sell.
I'm not going to go into great financial detail, but since we started offering this two months ago, we've banked over £5,000 in up front fees, and most of those instructions now have sales proceeding. There is the obvious advantage to cashflow, and the knowledge that we have committed vendors.
To help put this into perspective, as we all know, we're all grubbing around for new instructions, the lack of property coming on is well documented, and is certainly the case in this area, where we have 21 established agents already, and 7 newcomers in the last 3 months, all offering heavily discounted fees to buy in some business, ranging from flat fees of £500.00 to 0.5% (8 newcomers if you count Mr Ewemove, who does not appear to have done anything yet, but spends a lot of time sitting in his nicely signwritten car in the market place!) Given the general lack of new instructions and the new competition offering cheap fees, I'm very pleased with the way our level of instructions have held up, and have no doubt that the up front fee option has contributed to that.
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Hound
Thank you, Sir – your response (especially its' divulgence of structure) is firstly most appreciated and secondly highly interesting and needs me to get my head firmly around it. Of course it is what is MISSING that is the vital ingredient in knowing how 'good a deal' it is to your customers – or, equally important, how much of a mistake it may prove to you and your business.
Just quickly analysing what you say –
"I'm not going to go into great financial detail… (in two months)… we've banked over £5,000 in up front fees… To help put this into perspective… the lack of property coming on is well documented…"
In a town/city with almost 30 competitors, you have taken instructions on a minimum of 17 properties that have plumped for the up-front payment model. I would hardly call that "a lack of property coming on" – unless of course all of your competitors have done diddly in the same timeframe! But clearly your new model is having an impact and you score massive kudos points for having the cojones to roll it out. It is far easier to continue to do what you have always done than start to do what you intend to do from today onwards.
Blimey – that's a bit profound from me, innit! 😉
Look forward to the next round, mon ami!
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Just to give you a little more info to chew over PeeBee, according to Mr Rightmove, there are currently just under 1000 properties on the market in the area we cover, a typical modern 3 bed semi is around the £240,000 mark, and with the competition, where even the old establishment are cutting fees to compete, we were struggling to get better than 1% on a NSNF basis, so on an 'average' property we're not actually giving away too much, but the public perception seems to be that it is a good and fairer deal for them, and particularly on the bigger stuff is is a good deal. (Although what we've publicly promoted is 0.75% on completion, I have reduced that percentage on a few smaller properties where the up front fee appealed to the vendor, for example, I've taken on a couple recently at around £160,000 and have done those at 0.5% on completion with the up front fee)
Prompted by your reply, I checked and it is actually 10 weeks since I took on the first one on an up front fee basis, so just a little more than the two months I said earlier, but you are spot on with your figure of 17 instructions, and all but four of those are currently sstc.
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