Between 800 and over 1,000 sellers have been affected by the apparent second demise of online agent House Network.
The administrators told EYE yesterday evening that they are unable to provide “much information”.
However they said they are working with “800 customers as fast as it can”, while Rightmove told us of over 1,000 sales properties that could be affected – but the figure would be a lot more where chains are involved in those properties that have gone under offer.
House Network went into administration on March 29 and was bought by Universal Acquisitions Limited that day.
An upbeat statement by UAL was swiftly followed by staff lay-offs, and on April 15 UAL confirmed that House Network ceased trading.
It gave no explanation, citing legal reasons.
Rightmove yesterday evening gave EYE a steer on the size of the problem.
Its data for House Network from April 12 shows 1,063 sales properties, of which 273 were sold subject to contract.
In round figures, there would have been 750 available properties and 250 with sales going through at the time of the second ‘demise’ of House Network.
Last night, EYE received this statement from the administrators:
“Michelle Mills of Hudson Weir Limited was appointed as administrator of House Network Limited (‘the Company’) on 29 March 2019.
“We can confirm that any customers who made a payment to the Company prior to 29 March 2019 will be contacted shortly with instructions on how to make a claim in the administration. At present the likelihood of a distribution to customers is uncertain.
“Any queries regarding this matter should be forwarded to info@hudsonweir.co.uk
“I can assure you that we are dealing with all 800 customers as fast as we can and further information should be sent out early next week.”
The company that bought House Network was incorporated on March 13, and is registered here:
https://beta.companieshouse.gov.uk/company/11879126
* Meanwhile, EYE has received offers of help for stranded sellers from a number of local agents offering reduced fees and, of course, enhanced customer care to ex-House Network vendors.
We thank you for these, and would be very interested in your views as to how we might progress things in a practical way that would help sellers – but which could also enhance the industry’s reputation.
Comments (17)
What I cannot fathom in all this mess is, what the purchaser of House Network actually was buying and why. If it was so far up the creek without a paddle then surely due diligence must have shown it was not a viable business. Were there any assets worth stripping? Anyone have a clue?
Would guess they took a punt and bought it quick and cheap without doing any due diligence. Got the keys and found it was worse than they thought and walked away.
TPO recently stated that they were investigating around 75 cases of dual billing by traditional estate agents presumably on completed sales as these successful sellers swapped estate agents and it is likely that TPO will rule on which one agent introduced the buyer?
A surprisingly low figure given that the traditional market share is circa 93% of the market?
The demise of emoov version 1 and now House Network version 1 and 2 have placed many 1000s of upfront payment users fees in jeopardy.
Is it now time that the regulators insist that the pre-paid/deferred loan payment hybrid agents must hold enough cash funds to compensate their clients in the event of administration or ban them altogether?
If the regulators can ban tenant fees, why not consider a ban on upfront fees to protect sales consumers from having to pay two estate agency fees now and in the future particularly as the two largest on-line only agents shall soon need further additional financial support?
There is an interesting aspect to onliners which most people haven’t cottoned onto.
But before I explain, here’s a simpler example.
You have been with your wonderful girlfriend for 8 years and you want to make her your wife. So, you decide to buy an engagement ring. You fork over 1500 GBP for it and thankfully, she says yes.
Buying an engagement ring is supposed to be a “once-in-a-lifetime” purchase, and therefore it requires commitment. The commitment comes in the form of the amount of money you pay for it.
The large sum of money you spend on the ring is symbolic of the fact that you take your relationship seriously and plan on it succeeding.
The alternative is that engagement rings are sold for a fiver in a petrol station.
Tell me, how many more engagement rings would be bought, and how many of those engagements would fall flat, because the commitment of that purchase was no different to buying a Tesco Meal Deal?
—
This is the problem with onliners.
By charging less, the commitment becomes smaller.
By not having an office, or full-time negotiators, you are implicitly telling your customers that you are less committed to the completion of their property precisely because there is less riding on it.
Onliners are buying 5 quid engagement rings, and customers are saying “yes” because they really want to get married.
It is an ironic twist to the online model.
By virtue of having no premises, fewer staff and fewer overheads, they can treat each engagement as if it were a fling – which is fine for them, because they’re serial monogamists. They needn’t focus on one relationship, because they have 20 on the go.
But the customer always, always, remains the same.
They don’t want an engagement ring, they want to get married.
So when the onliner runs off, the customer realises that they weren’t wearing a 1500 quid engagement ring, they were wearing one from the petrol station, bought in bulk and handed out like lollipops to anyone with a sweet tooth.
…
…
The question to the customer is: do you want the engagement ring? Or do you want the marriage?
Because, here’s the secret – having one doesn’t mean you get the other.
Happy Friday, everyone.
Absolutely brilliant and if you dont mind i may use this on appointments
Go for it, man.
I think it is the simplest explanation of the difference between online and high-street without resorting to jargon and legalese.
And if you need a copywriter for your business, you know where to find me 😉
Absolutely brilliant! This should go viral, be published in newspapers and former part of our pitch at every appraisal!
Have a great weekend, mine is now cheered up!
Good analogy, I’ll probably use something like that!
(Just to point out that engagement rings don’t have to be expensive though, the same as a big flashy wedding doesn’t guarantee a happy marriage. But if the proposer is handing out cheap rings to all and sundry then it’s a pretty big flag that you don’t want them!)
I’d be surprised if these customers are even aware that HN has gone bust. They have been too busy down at the kitchen shop choosing a new one with the thousands of pounds they have saved not paying a traditional agent. I’m pretty sure that is what the advert told them.
I should imagine that any agent worth their salt will have already contacted vendors in their patch who have been using House Network to market their properties to offer their services.
Surprised that Michael Bruce in his letter from America hasn’t already reached out to offer the services of Bricks.or Sporting Ken now back in Blighty if he can drag himself away from his football club and his racehorses.
. Bricks must now be concerned that with this latest failure their pay anyway model is under threat having already been forced to drop the model in Oz and USA due to a lack of appetite by the public This latest pay anyway casualty is likely to put them under pressure to initiate that change here too.
In the USA they announced the change in January which will have impacted heavily on revenue .Just looking at Brenda as an example on Realtor.com . she has taken on a highly respectable 16 instructions since January. However she has not sold any this calendar year
.Under the old system this would have produced some decent revenue but under the new system SFA .
https://www.realtor.com/realestateagents/brenda-bowlin_gilbert_az_1840263_353109058
Rinse and repeat in OZ ,their overseas H2 FY 19 revenue which they will be reporting shortly is likely to be under the cosh Imagine the impact on revenue if this change was adopted in the UK which could be forced upon them anytime soon!
There was a very confident piece of blow-harding by a Bruce about how once you had a a decoy all the pigeons would come flocking to the field. The sheep investors feared missing out more than making a loss blah blah blah . 4/5 years down the line with un-arguably the best of the passive intermediary for recognisably sound financial performance (until 2015) now collapsed as a result of sector competition it ought to be very obvious there is no need to fear “missing out”
Asking investors to subsidise listing to the tune of about £2500 a time means either the investors will need a lot of patience and a lot more cash or they need their heads examined.
If this was happening in America, the FBI would be investigating the owners of these online companies. People compare online agents to the likes of Uber, Amazon etc but estate agency is totally different. You need high quality people to help you through the process of selling or renting, where’s with amazon or Uber you don’t need someone to guide you through the process. Hence why the only way for the business model to be sustainable is to charge high fees. All current online agents should seriously have warnings on their websites to say that their money is being gambled. The bigger they are, the harder they will fall. No profit, no business unfortunately.
Exactly correct. Car industry has to include 5 minutes of disclaimers on all their adverts.
When did advertising watchdogs become so out of touch with the world ??
Call it tech and average person thinks it’s above their pay grade.
Wake up which? Asa , rightmove .
I hate this online lies at moment. You can’t warn people because you just look like a bitter loser.
We need onthemarket to bring out adverts that educate the public, not try to hammer the name home.
Inbound marketing and informed adverts.
Hurry up! Email for content if don’t know what I mean.
: the importance of having an :
office
Local negs
Local solicitor
Where the money from fees goes locally Disabled / vision impaired / elderly
assistance when buying and renting When you don’t sell and you’ve paid anyway
Why negotiating your own sale could cost u £1000’s not save.
The best solution for the vendors would be to register with Doorsteps or 99homes then they can re-list their property on Rightmove, Zoopla and OTM for a fraction of the cost of employing an agent to pass on messages in return for a percentage of their property.
Simples……
Ha ha ha very good