Estate Agent Closures...

[TheCountOfNowhere]

Had a busy weekend, driving round various places, noticed 3 estate agents that had closed.

One particular one in Northampton must have been open less than 18 months.

What happened to the spring bounce ?

The other thing I noticed, petrol, up to £1.05 again...if I was being cynical I'd say, gordo somehow managed to get the petrol price down, whacked on 2 p tax when people minded less, now petrol prices are being allowed to shoot up....but hey, there's no way they'd do that to us poor drivers is there.

And...Milton Keynes shopping center....which I must admit I thought would be quiet immune to the down turn...must have had at least 6 empty units, which I have never seen before. They board them up and they dont look so empty, but they are there.

Green shoots....Brown sh*ts more like.

Edited June 22, 2009 by TheCountOfNowhere

[uptherebels]

And...Milton Keynes shopping center....which I must admit I thought would be quiet immune to the down turn...must have had at least 6 empty units,

What about the shopping centre in Northampton? The smaller one by the market. I think there are only two shops open in that one!

[TheCountOfNowhere]

What about the shopping centre in Northampton? The smaller one by the market. I think there are only two shops open in that one!

I stopped shopping in Northampton about 2 years ago.

No free parking. Poor selection of shops. Town center packed full of dodgy looking eastern europeans hanging about out side the bookies.

I'd rather spend the petrol money and drive to MK, which is a sad thing to say, but im sure a lot of Northamptonians do just that.

[Flat Bear]

Estate Agents in general have been very resiliant. I must admit to being suprised.

I have been looking at the various factors

#Many moving into the rentals market to make up for shortfall, which is understandable but is it anywhere as lucrative as commision on house sales?

#Relatively low overheads of an EA, where salaries are topped up with commisions and the only big cost being rent and rates on premises and where all other costs have been cut to the bone (maybe problems end of june when quartely rents due?)

#Many may be in severe trouble but are sticking it out in the belief the market will somehow turn? Whilst using up reserves of cash ie running at a loss (how long can they go on?)

#Maybe many are stuck with a lease they can not offload (like numerous other businesses in the UK)

#Maybe some are run as non profit making organisations

OR

Maybe it is a combination of all the above.

[TheCountOfNowhere]

Estate Agents in general have been very resiliant. I must admit to being suprised.

I have been looking at the various factors

#Many moving into the rentals market to make up for shortfall, which is understandable but is it anywhere as lucrative as commision on house sales?

#Relatively low overheads of an EA, where salaries are topped up with commisions and the only big cost being rent and rates on premises and where all other costs have been cut to the bone (maybe problems end of june when quartely rents due?)

#Many may be in severe trouble but are sticking it out in the belief the market will somehow turn? Whilst using up reserves of cash ie running at a loss (how long can they go on?)

#Maybe many are stuck with a lease they can not offload (like numerous other businesses in the UK)

#Maybe some are run as non profit making organisations

OR

Maybe it is a combination of all the above.

Ive been amazed at how reliant they have been but it looks to me like they are in their death throws, which is nice to see.

As you point out above many will have been landed with long leases and a forlone hope that things will get better, I mean, why wouldnt they, house prices only ever go up

Edited June 22, 2009 by TheCountOfNowhere

[CokeSnortingTory]

And...Milton Keynes shopping center....which I must admit I thought would be quiet immune to the down turn...must have had at least 6 empty units, which I have never seen before. They board them up and they dont look so empty, but they are there.

Yeah they board them up in my local shopping centre in Peterborough. They use these sort of expensive-looking but low profile pseudo-advert hoardings that suggest a continued level of activity. It takes a while to remember there used to be a shop there!

[yellerkat]

Not quite an Estate Agency; but this charming little place in Brighton (Glamorous St James's Street for those who know the town ) caught my eye the other day:

No proof of income! ERIC!

They tried to reinvent themselves as a letting agency - how did that pan out?

On closer inspection:

Whoops!

[Flat Bear]

Ive been amazed at how reliant they have been but it looks to me like they are in their death throws, which is nice to see.

As you point out above many will have been landed with long leases and a forlone hope that things will get better, I mean, why wouldnt they, house prices only ever go up

There are many UK companies looking to "mothball" through this crisis including many I know.

To be able to do this overheads must come down low enough to be sustainable with reduced profit, zero profit or minus profit.

An Estate Agency is no different really and if the business was very profitable when the sun was shining, which is quite plausable looking at the number that set up, then it could be argued that it would be worth keeping a low presence in the market place until the market changes and with the upturn and the reduced competition from those that did fold it would again be a lucrative venture. Many other businesses in different markets including my own are doing the same. The longer so many "stick it out" the harder it is for those that do manage to survive.

I predict a large proportion will call it a day late summer early autumn when the reality of a longer protracted market becomes obvious.

For an EA to stay in business it primarily needs property to sell and people invariably will put it on with the Agent that gives them the highest valuation. So the successful agent will be the one with the highest prices. Getting the sale is secondary, and as any decent salesman knows selling on price is simple it takes a professional to sell a higher priced product on its benefits alone. EAs are purely salespeople and realise presentation and salesmanship will get them through this crisis. Unfortunately the "honest" nice ones that tell you your house is not worth much or who only get properties after everyone else has had a go, has no chance. It is the nature of the beast.

[loginandtonic]

agents branches look dead to me, but i suppose its all on the phone these days?

a "we buy your house for cash" outfit on my route - closed down & to let

[50%deposit]

Not quite an Estate Agency; but this charming little place in Brighton (Glamorous St James's Street for those who know the town ) caught my eye the other day:

No proof of income! ERIC!

They tried to reinvent themselves as a letting agency - how did that pan out?

On closer inspection:

Whoops!

yaaay!!!

[Namaste]

Had a busy weekend, driving round various places, noticed 3 estate agents that had closed.

One particular one in Northampton must have been open less than 18 months.

What happened to the spring bounce ?

The other thing I noticed, petrol, up to �1.05 again...if I was being cynical I'd say, gordo somehow managed to get the petrol price down, whacked on 2 p tax when people minded less, now petrol prices are being allowed to shoot up....but hey, there's no way they'd do that to us poor drivers is there.

And...Milton Keynes shopping center....which I must admit I thought would be quiet immune to the down turn...must have had at least 6 empty units, which I have never seen before. They board them up and they dont look so empty, but they are there.

Green shoots....Brown sh*ts more like.

And now other EAs start seeing more business due to the reduced competition from other branches. They report to the media of massive rise in interest from potential buyers, the bulls get all excited as surely this means the smell of recovereh is in the air. But then reports come in that estate agents are still selling on average 1 property a month, and the dipsticks look at each other wondering, "how can this be"?

[Caveat Mortgagor]

For an EA to stay in business it primarily needs property to sell and people invariably will put it on with the Agent that gives them the highest valuation. So the successful agent will be the one with the highest prices. Getting the sale is secondary, and as any decent salesman knows selling on price is simple it takes a professional to sell a higher priced product on its benefits alone. EAs are purely salespeople and realise presentation and salesmanship will get them through this crisis. Unfortunately the "honest" nice ones that tell you your house is not worth much or who only get properties after everyone else has had a go, has no chance. It is the nature of the beast.

+1

[Flat Bear]

There are probably 1000s of EAs around the country thinking OK i'll move into something else. But what do you do after being an EA? There arn't many jobs about for unqualified people and most companies are cutting back on sales staff.

[mikthe20]

For an EA to stay in business it primarily needs property to sell and people invariably will put it on with the Agent that gives them the highest valuation. So the successful agent will be the one with the highest prices. Getting the sale is secondary, and as any decent salesman knows selling on price is simple it takes a professional to sell a higher priced product on its benefits alone. EAs are purely salespeople and realise presentation and salesmanship will get them through this crisis. Unfortunately the "honest" nice ones that tell you your house is not worth much or who only get properties after everyone else has had a go, has no chance. It is the nature of the beast.

-1

So a successful EA is one with lots of instructions at high valuations but no sales?

The EAs who stay in business are the ones who can use their sales skills to convince SOME sellers to price realistically and can then find buyers. They may well gain fewer instructions, but they will have that rare and valuable business advantage - people actually buying and money entering their bank account. And they will not have the costs of marketing unsellable houses.

[Flat Bear]

-1

So a successful EA is one with lots of instructions at high valuations but no sales?

The EAs who stay in business are the ones who can use their sales skills to convince SOME sellers to price realistically and can then find buyers. They may well gain fewer instructions, but they will have that rare and valuable business advantage - people actually buying and money entering their bank account. And they will not have the costs of marketing unsellable houses.

I understand the theory but the truth is people are greedy. Why sell for 20k less? People will go with what they want to hear and who is to say they are not right? Why should they believe the cheapskate? He only wants to put their house on the market at that price so he doesn't have to work. People believe they could put it on the market themselves if "they were to give it away". Are they wrong?

It would be good to get an Estate Agents perspective on this. Are there any out there?

[CokeSnortingTory]

It would be good to get an Estate Agents perspective on this. Are there any out there?

If there are, there would appear to be considerably less of them

[mikthe20]

I understand the theory but the truth is people are greedy. Why sell for 20k less? People will go with what they want to hear and who is to say they are not right? Why should they believe the cheapskate? He only wants to put their house on the market at that price so he doesn't have to work. People believe they could put it on the market themselves if "they were to give it away". Are they wrong?

It would be good to get an Estate Agents perspective on this. Are there any out there?

I would argue that the time is not far off where people will put their house on the market because they need/want to sell quickly. Either they are in financial difficulties or they believe that house prices will continue going down. So, that flip from "greed" to "fear" typical in all crashes. In that context, realism wins - picking the highest price EA may mean you lose money as your house will stay on the market longer and will have to come down in price more. Also, my experience in business is that the really successful sales people are the ones who under-promise but over-deliver. Sales people who over-promise are usually completely crap at actually selling (but have a vast plethora of excuses).

[Yorkshire Lad]

When we sold our house May last year we didnt put it on the market with the EA who gave the highest valuation, we put it on with the agent that could market the place better, and had a better high street presence.

The fact that the valuation he gave was 40k less than the highest made no difference as we wanted to move. If we had put it on at the higher valuation we could still be living in our old village, but we beat the market using a sensible (at the time) valuation and got the place shifted in 3 months or so.

Seemed to me that the other EAs were more interested in shifting properties with a higher valuation as they gained more commission. They forget the fact that you can make more money by piling them higher and selling them cheaper than the competitor.