I was surfing on the Wayback Machine, looking for nostalgia.
In case you haven’t ever used it, the Wayback Machine is the archive of the internet. Head to web.archive.org and type in a website to see its old versions.
My personal favourite is Geocities. It was proof that the crowd definitely doesn’t have too much wisdom.
What quickly becomes apparent when looking at old websites is how the vast majority of estate agent websites look like they belong in the archives of the internet.
Considering how much time we spend online it seems incredible that estate agents invest so little in the online marketing or shop front.
This is one clear advantage the likes of Foxtons and online agents have over both independent agents across the country and the big corporate chains like Countrywide – one set genuinely invest in their websites. You can see the different iterations over the years.
With independent agents, you can see the same websites five and even ten years prior in some cases.
But there was something else that struck me while looking at websites of online/hybrid/new style agents: their fees have been subject to massive inflation.
While Purplebricks charge £849 for their base selling service (£1,199) in London, back in 2014 they were charging £599:
That’s a doubling of fees if you’re selling in London – they didn’t have different fees for London until the ‘Bruce brothers’ TV adverts started to appear.
If you think that’s inflationary, here’s a sampling of fees from others over the years:
Settled: Free (2014), £299 (2015), £399 (2016), £499 (2017)
easyProperty: £59.99 (2015), £475 (2016), £825 (2017)
Tepilo: Free (2013), £495 (2014), £495 (2017)
eMoov: £349 (2010), £295 (2012), £395 (2013), £595 (2015), £795 (2017)
How long will this trend continue? And at what point do online agents stop becoming all about fees?
Over the last year I’ve been using Monzo – a new online bank for my spending. And today I signed up for Starling Bank who have recently launched their current account.
It took me less than five minutes of security checks to receive an account number and sort code. Starling now have a video of me speaking to camera to help them verify who I am.
I went in to Santander recently. They knew who I was, but because I didn’t have ID on my person refused to serve me. It’s worth noting that it took them 17 days to open an account for me.
That’s 17 days of costs that Santander had to bear, just to take my money.
Most of the current crop of online agents do little more than list your property on Rightmove – that is after all their value proposition: get your property on Rightmove for less.
And that’s probably why we see a regular increase in fees: because Rightmove increase their fees to agents by approximately 20% per annum.
In contrast, the vast majority of independent and corporate chains operating on a commission basis have enough margin to conduct business without needing to take on endless amounts of investor capital.
You can guarantee Rightmove will increase their fees again this year. It’ll be interesting to see if online and hybrid agents are forced to follow suit.
Rayhan you are a brilliant, brilliant man, thank you! For 2 years I have been describing the old http://www.arielmotor.co.uk/ site as the benchmark of simplicity in captivating web design, my favourite! The trouble is they changed it to some same old, same old design.
I now have access to a site as fast, minimalist and exciting as the car. I can now show people what I’ve been banging on about!
Brilliant!
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The dominance of internet style agents will reduce the number of high street locations over time, (the basis of Rightmove revenue is derived from each branch). Ergo, internet style agents charges will increase to offset and as such there will come a time when internet style agents will cost more than the typical estate agent of today….. unless the Rightmove financial model implodes or goes “personal”. The rot has set in.
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The rot has set in and any attempt to put things back on track is called a cartel.
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If different companies collude to agree a set price for a service or product it is often (but not always, there are exceptions) described in law as a cartel. It is also illegal for suppliers to force retailers to sell at a fixed price. HMRC classes franchisees/ licensees as individual companies.
Worth bearing in mind if you are a self employed estate agent/ franchisee of a larger organisation where the price is fixed by the franchisor/ supplier.
“Whistleblowers are being offered up to £100,000, as the CMA launches its first-ever advertising campaign to crack down on cartels.”
https://www.gov.uk/government/news/cma-launches-campaign-to-crack-down-on-cartels
COMPETING FAIRLY IN BUSINESS AT A GLANCE GUIDE https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/477569/SME_Compliance_At-A-Glance.pdf
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What he said.
If there are less agents to pay Rightmove, I suspect fee increases might become more aggressive on their ‘best’ customers.
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My money is on many agents don’t put much effort today into their own web site, due to costs they are now charged to make it flashy by IT companies and the main culprit are the likes of RM & Z. I can think of a number of agents who do not have a web site at all, just a web domain which is a link to their stock on RM. As one said to me, why bother to have your own when the customers are coming from the web portals, making their own web site redundant. I see their point, but disagree ……….. image is everything!
Interesting media coverage today about real term affordability. Inflation has meant you have less today due to wages not keeping up. How can an employer pay a rise, (if you didn’t have a pension scheme you have now which is a pay rise) when they are competing with budget models …. which the consumers are being fed is the way forward. Talk about two or more bites of the cherry, pay more expenditure but charge less income.
It is no good agents roling over saying we can’t do anything. Thats a slow lingering death. While you contiune to support any other buisness that is bleeding you dry, you have only yourselves to blame. Take back control and work out what YOU need to do, not for today but for tomorrow. Look at other web portals that could support you. Customers will follow you, for that is the very reason why they are using the likes of RM & Z. You are just delaying the inevitable, when you had the chance to be rescued.
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If different companies collude to agree a set price for a service or product it is often (but not always, there are exceptions) described in law as a cartel. It is also illegal for suppliers to force retailers to sell at a fixed price. HMRC classes franchisees/ licensees as individual companies.
Worth bearing in mind if you are a self employed estate agent/ franchisee of a larger organisation where the price is fixed by the franchisor/ supplier.
“Whistleblowers are being offered up to £100,000, as the CMA launches its first-ever advertising campaign to crack down on cartels.”
https://www.gov.uk/government/news/cma-launches-campaign-to-crack-down-on-cartels
COMPETING FAIRLY IN BUSINESS AT A GLANCE GUIDE https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/477569/SME_Compliance_At-A-Glance.pdf
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So if RM have done a deal with an agent fee’s that are not in line with other agents (the norm) and disadvantages those agent, that would be a cartel? If you are ahead of me as I think you will be, you know where this is going!
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It wasn’t RM I had in mind, as they don’t have franchisees, (though it could be argued that they are abusing market position). However, I’m sure if you give it some thought, you will work it out.
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I had but it actually applies in both.
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On these continuing price increases by leading portals such as RM.
Does anyone agree that the solution to solving this problems such as this, has to in the hands of us agents.
Most of us belong to various trade association, then why not with group power make some attempt to reverse this trend . . .
Give them a 50% drop in income for few months and I don’t thin any portals will tariff remain firm. The rewards would be ongoing.
We do not have to stop advertising, just either reduce the quantity or change to another more reasonably price quality portal
Are there any supporters for this line of action. 🙂
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Its called On The Market.
Agents had their chance and blew it.
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🙂 Don’t mention that name, still annoyed at having used them . .
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Why?
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How can it upset you?
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At what point will Rightmove and Zoopla start acting for the numerous smaller independents ?
If the ‘conmissery’ lot get enough of a toehold, and lets face it, they are probably the most well known agent in the country at the moment ( billions on advertising buys you that ). Do they need to be on Rightmove and Zoopla ? Or will people simply add their website to the short list that people currently search for a place to buy on ?
It may be in Rightmove and Zoopla’s interests to start helping their numerous smaller subscribers. As an agent it will get similar to when one landlord has 20+ managed properties with you, and demands a drop in fee’s otherwise they will take their business elsewhere.
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You are right but RM in particlaur have shown no care, profit rules.
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A few years ago Yahoo allowing Google to advertise on their site comes to mind!!!
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WOW! What a proper handy bit of kit!
I’d forgotten that in 2014 it was stated that “All of our Experts are NAEA qualified.” I wonder how accurate that is now?
I’d completely forgotten about the 2014 “100% Money back guarantee”. I wonder how many claimed on that?
I’d even forgotten that their advertised Fee in July 2014 was £599 inc VAT – yet by October they were advertising a Fee of £665 PLUS VAT (or £798 inclusive, to quote the LEGALLY correct amount).
And I’d totally forgotten that they were claiming that 99% of their properties sold for at least the asking price.
I’m gonna have sooooo much fun with this…
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“All of our Experts are NAEA qualified.” Never was true and still isn’t.
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in 2000 they also said they would issue shares to founder members and those of us who were offerd it, can remember what happend when they went public … a theme that holds water today?
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New RM boss (I wonder why the last one decided to leave so quickly) to shareholders via satellite link at mission control.
Shareholders we have a problem.
Have we facilitated our own demise?
We have helped grow the call centre agents at the expense of the small independent estate agent who pays vastly more per listing than any of these disruptors.
Not only have we squeezed them dry but they may well be losing more fee income from lost opportunities in the near future than our huge subscription charges!
Have we orchestrated a platform that may well grow into a portal in its own right?
What are we to do?
Peter Brooks-Johnson I have a very cunning plan.
Do you?
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