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Life Expectancy Of The Traditional Estate Agent Model?

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I know this has been discussed before, but hey, its bugging me, and its raining. Driving home today, I decided to count the estate agents (it's a Sunday, I'm young, I'm free, so why the ****** not?! Yep, that's the kinda way I like to roll).

Just in the length of what is by most standards a modest high street with maybe around 30-40 businesses, there were 12 estate/lettings agents. Only one I know of has closed shop since I've been here (3 years or so). Conversely, there is now just one travel agent. This was just in one suburb of Reading. There are many many more dotted around other parts of the town, all presumably covering overlapping areas.

I find it ridiculous there should be so many. They continue to exist in the face of massive changes not just to the market, but also to the mechanisms driving it. Sites like Rightmove etc have, from my perspective, almost removed the need for them to have premises, at least in terms of selling. There are even sites popping up intended to exclude the agent altogether (I'm thinking of that one by that Sarah Beeny lady, I can't remember the name). The internet wrought havoc on the travel agencies. I do understand the product is different and they deal with both sides of the market, but still...

How much longer can it go on? When are these 12 high street locations going to be used for something more useful? For the most part, I cannot understand how they are contributing enough value to the economy to continue to be present in such numbers. I'm aware some perform some useful functions other than just advertising properties, but how can the sector continue to be worth 12 out of 40 (max) high rent premises!?!?

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The fact that they prosper (or rather exist; most of them are just keeping their head above water I'm sure), when high-street travel agents died a death tells you what you already know. Our economy is based on buying and selling ever-ludicrous-inflated properties to each other, estate agents do this, travel agents don't.

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I know this has been discussed before, but hey, its bugging me, and its raining. Driving home today, I decided to count the estate agents (it's a Sunday, I'm young, I'm free, so why the ****** not?! Yep, that's the kinda way I like to roll).

Just in the length of what is by most standards a modest high street with maybe around 30-40 businesses, there were 12 estate/lettings agents. Only one I know of has closed shop since I've been here (3 years or so). Conversely, there is now just one travel agent. This was just in one suburb of Reading. There are many many more dotted around other parts of the town, all presumably covering overlapping areas.

I find it ridiculous there should be so many. They continue to exist in the face of massive changes not just to the market, but also to the mechanisms driving it. Sites like Rightmove etc have, from my perspective, almost removed the need for them to have premises, at least in terms of selling. There are even sites popping up intended to exclude the agent altogether (I'm thinking of that one by that Sarah Beeny lady, I can't remember the name). The internet wrought havoc on the travel agencies. I do understand the product is different and they deal with both sides of the market, but still...

How much longer can it go on? When are these 12 high street locations going to be used for something more useful? For the most part, I cannot understand how they are contributing enough value to the economy to continue to be present in such numbers. I'm aware some perform some useful functions other than just advertising properties, but how can the sector continue to be worth 12 out of 40 (max) high rent premises!?!?

One reason they still exist in such numbers is the crazy price of property which has risen far above inflation in thelast 15 years. They base their fees on a percentage. Boy, it must have been good in 2006-7. In the longer run, when the meltdown about to commence has finished, taking many agents with it, there will be room for net based agent models, with access to all the srrvices you need including negotiation, for a lot less than now.

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Costs of running an estate agency business are probably not that high.

Get your staff to operate on a commission basis. Slim down ones you don't need. The only overheads are someone to sit in the office and rent etc.

During the week you're not getting many people in, so just staff the office with some low cost stooges and while your not doing viewings moonlight doing something to bring in some extra cash.

One thing that might prevent them closing is business leases. Often in my type of business you have to take out a really long business lease which causes some issues on vacating premisis at short notice (I don't know hwether this is the same or not for EAs). If things aren't going great it may well seem better to batten down the hatches for a couple of years until the market picks up rather than try to get out of the lease.

Finally, it's reasonable to assume that over the last few years a lot of these agents have been making serious amounts of cash. If that's the case then they should be able to ride a couple of lean years until business picks up again.

Of course if the net model really takes hold it could be a different story, but there are some reasons why the net cannot offer a complete ea service.

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Of course if the net model really takes hold it could be a different story, but there are some reasons why the net cannot offer a complete ea service.

If I had a house to start selling tomorrow, I'd take the photos myself, advertise it myself, field enquiries myself, show people round myself... I'd have to get a solicitor involved at some point no doubt, but would I really need an agent at all? The internet has provided a route for an individual to do this, where this was much much harder before. Perhaps this too has been masked by the boom? It may not suit all to do so perhaps, or having never sold a property, am I being naive in believing I could do this?

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500 offices have closed down since late 2007. On top 000s of staff have been made redundant. Those offices still open have skelton staff. When you hear they're busy, no wonder!

Transaction numbers are still less than a half of the peak. Patience.

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thinking about it, i am surprised why there isnt more privatly sold property than there actually is now.

if you look at the car market, yes you have dealers, but they buy the stock they sell, but there is 1000's of vehicles sold with out the need of a dealer.

so why doesnt this take off? and this has been happening long before the internet became main stream. £1000's would be saved in fees.

if an estate agent had to buy the stock they sold, there would be a lot less in the high street, but it wouldnt work as easy as selling cars, but private (no agent) sales would work

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thinking about it, i am surprised why there isnt more privatly sold property than there actually is now.

if you look at the car market, yes you have dealers, but they buy the stock they sell, but there is 1000's of vehicles sold with out the need of a dealer.

so why doesnt this take off? and this has been happening long before the internet became main stream. £1000's would be saved in fees.

if an estate agent had to buy the stock they sold, there would be a lot less in the high street, but it wouldnt work as easy as selling cars, but private (no agent) sales would work

You might save £1000s in fees - and miss out on £5000s on price. I work with high-end classic car sales people and boy, are they slick. The facility with which they ease huge wads of cash out of punters is awesome. A good agent will know their area and will have a list of potential buyers lined up; they will also talk up your property and very often persuade people to pay much more than they would otherwise. A typical ploy - you make an offer, they go well, OK, but the sellers won't accept it. You'll need to up your offer to have any chance at all. So you up your offer - and now you are in an auction in which you re bidding against yourself. Or there's the "we've already had a higher offer than that" so again you are bidding against yourself; how do you know the other bid is real? Astonishing though it might seem, they lie. Yes indeed.

Best story I heard; rich, sophisticated punter looking at very expensive motor. Friend of mine was there as buyer's agent, two dealers trying to sell it. One of the smart-ass dealers says "We've already been offered £x for it." Sophisticated gent looks him straight in the eye and says "Well if that's so then you should sell it to them." Collapse of sale.

I'll tell you for nothing, the vast majority of people will be cut to ribbons and comprehensively screw*d over by these people. A good agent is worth the money.

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I'll tell you for nothing, the vast majority of people will be cut to ribbons and comprehensively screw*d over by these people. A good agent is worth the money.

Neither slick nor sophisticated are words that spring to mind when thinking of any estate agent I've ever met. Perhaps there are some out there somewhere. Not the ones I've met, sorry. They were nice enough, but simple.

If you want sophisticated, meet a few folk from the City. Now they know how to screw you.

Edited by Fraccy

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I sold my place in 2007 for rented (which kinda sucks - so I wish house prices would frikkin' hurry up and fall a bit!) - and I used a £999 service (including vat) with a company called wow property. They got me on prime location and right move - although I had to show people around and do some chasing. It saved me about 5000 quid on the best quote I could get from an EA.

The irony of it is - wow property have gone bust - and all the estate agents that quoted from 1.5% to 2.2% are still going (strong?... I doubt).

Tescos are still trying to get their version off the ground and I think Google have a national property advertising service planned for later in the year.

will be an interesting 6 months - but if we don't see the double dip in house prices start by the end of this year, then I'll buy back in, because I just can't tell how far down the road they are kicking the can. I might be old and grey (er) before the world wakes up.

I wish everyone out there all the best in your property / saving endeavours.

Peaks.

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Tescos are still trying to get their version off the ground and I think Google have a national property advertising service planned for later in the year. Will be an interesting 6 months.

I agree, a company with the financial clout of Tescos or the net savvy of Google could revolutionise the way property is sold in the UK. However pending this, the continued existence of high street EA offices is separate question.

Just what is the point nowadays of paying out for these seemingly pointless retail premises? Much of the 'hands on' service provided by an EA could be done from a cheap back street office or from home. Surely EAs should be the first to see the light here? I suspect inertia is by far the most important factor.

.

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In my small town there are eight EAs. Thinking back to 1998/1999 I think there were six, so maybe an increase of two.

When I look through RM and I can tick to see houses under offer, I often wonder how easy it would be to be able to produce a quick grid that showed:

Estate Agents In This Area

Total Properties Per Agent

Number Marked as Sold

This way you could see which agents haven't got any under offer right now ....

With eight agents in my town, RM currently shows 542 properties listed, 626 including those under offer. So 84 between the eight of them. However, also in RM I see there are a lot of London estate agents selling the £350k-£1.5 million flats. e.g. Savills, Knight Franks. There are probably, therefore, more like 16 EAs selling property that's here.

Edited by ScaredEitherWay

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I know this has been discussed before, but hey, its bugging me, and its raining. Driving home today, I decided to count the estate agents (it's a Sunday, I'm young, I'm free, so why the ****** not?! Yep, that's the kinda way I like to roll).

Just in the length of what is by most standards a modest high street with maybe around 30-40 businesses, there were 12 estate/lettings agents. Only one I know of has closed shop since I've been here (3 years or so). Conversely, there is now just one travel agent. This was just in one suburb of Reading. There are many many more dotted around other parts of the town, all presumably covering overlapping areas.

I find it ridiculous there should be so many. They continue to exist in the face of massive changes not just to the market, but also to the mechanisms driving it. Sites like Rightmove etc have, from my perspective, almost removed the need for them to have premises, at least in terms of selling. There are even sites popping up intended to exclude the agent altogether (I'm thinking of that one by that Sarah Beeny lady, I can't remember the name). The internet wrought havoc on the travel agencies. I do understand the product is different and they deal with both sides of the market, but still...

How much longer can it go on? When are these 12 high street locations going to be used for something more useful? For the most part, I cannot understand how they are contributing enough value to the economy to continue to be present in such numbers. I'm aware some perform some useful functions other than just advertising properties, but how can the sector continue to be worth 12 out of 40 (max) high rent premises!?!?

I don't know if your area can continue to support 11 estate agents. I suppose once the house price crash actually happens, then sales volumes will start moving again, and they will have more business. I guess for a lot of them, most of their income will be from their lettings business. That gives them monthly income of about 10% - 15% of the rent they collect, and the number of people renting certainly hasn't fallen.

Personally I don't think estate agents as a profession are at risk of disappearing any time soon. While most people would be happy to buy, or at least search for a property over the internet, I don't think they would want to sell a property over the internet, so for that reason, estate agents, advertising their clients' properties on Rightmove are likely to be around for the forseable future. We don't like estate agents on here because they try to ramp up the price of property, but that is just them doing the job they are paid to do.

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  • 259 Brexit, House prices and Summer 2020

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      • down 5% +
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      • up 5%



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