Pressure to lower fees an issue for four in ten agents

Pressure to lower fees is an issue for four in ten agents, new research has revealed.

It says that it is affecting business performance for 39% of agents.

The same research also finds that only a slim majority of agents were feeling optimistic for this year. However, most were questioned in the three-month run-up to last month’s election and sentiment may have changed since.

According to the latest ‘State of the Property Nation’ report by Zoopla, 55% of agents questioned over the last quarter of 2019 were feeling upbeat about this year.

The proportion was slightly up on 2018, when 51% of agents felt confident about the prospects for 2019, but well down from the 79% questioned in 2016.

In the latest Zoopla survey, just over half (52%) of the 675 agents questioned were expecting stock supplies to start meeting buyer and renter demand this coming year.

Zoopla found that most are now heavily reliant on lettings.

Only half expected increased income from sales this year, but 54% expected more revenue from property management. The proportions could, however, have shifted since the December 12 election.

A number of agents were also looking for referral fees to increase income – 43% thought they had scope to increase earnings by recommending mortgage lenders or brokers, and 42% by recommending legal services.

While the latest Zoopla report almost entirely covers the pre-election period, it does say that almost half (47%) of agents are unsure what the new government’s housing policy is.

The ‘State of the Property Nation’ survey also questioned over 6,000 consumers – who, like agents, may have changed their thinking since December 12.

The portal is continuing to forecast 3% growth in house prices this year.

Chief commercial officer Andy Marshall said the hope is that agents will benefit from “a new dawn”.

 

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7 Comments

  1. Richard Rawlings

    Hmm. I wonder from where the “pressure” to lower fees is actually coming? Thousands of good agents charge what they feel they are worth, they have the confidence to charge anywhere between 1.5% and 3% (and still be the cheapest in the world) and, importantly, they know how to go about addressing the fee conversation with the seller. They are persuasive yet charming but most of all have the RIGHT ATTITUDE to secure a much higher fee than their average competitors, as well as the right words. The greatest pressure to reduce fees comes from within! Don’t let this happen to you! Have a great day.

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    1. SLF

      …..and then in the real world….

       

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      1. AgencyInsider

        Actually, Rawlings is absolutely right.

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    2. brokerofexcellence

      Slightly controversial notion, but had the majority of the high street held firm and said “we aren’t stooping as low as that” to “compete” with PB/Yopa etc 4 or 5 years ago, instead of racing them to the bottom and rolling over, would there be that price pressure?

      There used to be the corporates, charging between 1.5% & 2% (we are the biggest, we do more blah blah blah), the indies charging between 1% and 1.5% (we have a database of local buyers, do the same as the corps without the over heads blah blah blah), and then the disruptors (Online/Hybrids with a pay anyway marketing service blah blah blah) charging £800 or so.

      The minute the corps went to 1% and the high street went to whatever they could get, it was an admission that they were no better than the onliners in the eyes of the average client. No differential between getting what you pay for. I’ve seen really strong brands offering £995 fees in some market places, and I’ve heard of Countrywide/Connells branches offering less than 1%. And don’t even get me started with CW’s failed online offering. So even though onliners and hybrids still only account for less than 20% of the market, the remaining 80% is being cut up amongst the high street at prices that don’t reflect the service that is offered.

      Not the case for all agents, but certainly the case for many of them. Rather than everyone racing everyone else to the bottom, should everyone have just said “No, we are better than that!!!”, and if they had, what would agency look like today?

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  2. Richard Rawlings

    If a real agent can’t compete with an online agent without dropping fees then they are either not “attractive” enough or they are not persuasive enough. It’s simply a training issue (or possibly recruitment one!) R.

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  3. Blue

    Sounds about right.  Can’t value, can’t prospect, can’t differentiate themselves, can’t market, can’t sell.  No surprise they can’t negotiate either.

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  4. Woodentop

    Fear, Fear, Fear is the disease of all poor sale people. There is no easy answer to the solution, particularly when the management has the same disease. The foundation of Estate Agency is still the same today as it was decades ago but the internet for all its good points is a double edged sword and reinvented all those horror stories of poor planning, management and training coming to the fore, with “buy your customer” with less effort.  
     
    But, the consumer is only happy to take advantage of cheap, if they think they can get away with it and still want the full service!  
     
    Agents need to stop worrying about their competitors and racing to the bottom for all to see, including the customers you want to win over. Your competitors are probably in the same boat and wishing everyone would move back up where you all belong but fear of making the jump first, to be demonised by the competition.  
     
    The reality is the rot has set in for many and if you don’t have the conviction in yourself, you should be considering a new life for it is not going to change for you. Only the strong will survive. AND its not about fee’s.

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