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Alfie Moon

Estate Agents Going Under

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In the 2007 - 2009 stage of the house price crash Estate Agents were going out of business at a fair old rate. Then we had QE, the Base Rate cut to 0.5%, and SLS with Estate Agents cutting their staff teams to the bone and developing their Letting side of the business and the number of Estate Agencies going out of business reduced greatly and stabilised. However, more recently with demand falling further, obtaining mortgage loans becoming ever tougher, and Estate Agents beginning to compete with asking price reductions there now seem to be reports of Estate Agencies going out of business appearing regularly again. See for example:

http://www.halesowennews.co.uk/news/worcestershire/8394838.City_estate_agent_is_forced_to_call_time/

Is this a developing trend?

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In the 2007 - 2009 stage of the house price crash Estate Agents were going out of business at a fair old rate. Then we had QE, the Base Rate cut to 0.5%, and SLS with Estate Agents cutting their staff teams to the bone and developing their Letting side of the business and the number of Estate Agencies going out of business reduced greatly and stabilised. However, more recently with demand falling further, obtaining mortgage loans becoming ever tougher, and Estate Agents beginning to compete with asking price reductions there now seem to be reports of Estate Agencies going out of business appearing regularly again. See for example:

http://www.halesowennews.co.uk/news/worcestershire/8394838.City_estate_agent_is_forced_to_call_time/

Is this a developing trend?

We hope so.

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In the 2007 - 2009 stage of the house price crash Estate Agents were going out of business at a fair old rate. Then we had QE, the Base Rate cut to 0.5%, and SLS with Estate Agents cutting their staff teams to the bone and developing their Letting side of the business and the number of Estate Agencies going out of business reduced greatly and stabilised. However, more recently with demand falling further, obtaining mortgage loans becoming ever tougher, and Estate Agents beginning to compete with asking price reductions there now seem to be reports of Estate Agencies going out of business appearing regularly again. See for example:

http://www.halesowennews.co.uk/news/worcestershire/8394838.City_estate_agent_is_forced_to_call_time/

Is this a developing trend?

The next few months look particularly tough - it would appear that a lot of landlords are taking properties off the rental market and trying to flog them for unrealistic prices. So, no sales, no rentals...

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Unfortunately, I doubt it.

I mean, what overheads does an EA actually have?

A bit of ground rent in a pokey shop, a bit of petrol and shoe leather, a few prints to hang in their window.

er... that's about it. Add to that they just have to, en masse, start charging to market properties (if they don't already).

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"...Winners was set up with some fanfare in
August 2007
when Manchester United boss Sir Alex opened the agent’s city branch... ...“
For three years the targets haven’t been met
so I wasn’t willing to fund it anymore."

A dead loss from Day 1.

:rolleyes:

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What would be really good is if the EAs realised that no sales means no pay and started encouraging low offers and the acceptance of low offers.

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Unfortunately, I doubt it.

I mean, what overheads does an EA actually have?

A bit of ground rent in a pokey shop, a bit of petrol and shoe leather, a few prints to hang in their window.

er... that's about it. Add to that they just have to, en masse, start charging to market properties (if they don't already).

you forgot a cheap suit.

Mind you, must take a bit of time to write up the dimensions.

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I might set up an estate agency.

I'd only take on houses which are priced at 30% below peak and then willing to negotiate more. You might think you'd get no instructions but i bet you'd get motivated sellers and a lot of potential buyers who wouldn't have to waste time looking at all the unrealistically priced stuff.. Setting a new marketplace if you like, getting ahead of the curve.

You could attract whole chains of people, simultaneuosley (sp) dropping their price to get the deals through. quick turnover, low commision.

Actually, i'm not enough of a ***** to be an estate agent but why hasn't anyone else done this? this would work, no?

The problem at the moment is that that everything has ground to a halt. We're in limbo, suspended animation and waiting so nothings shifting all the while, EA's will go out of business.

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I might set up an estate agency.

I'd only take on houses which are priced at 30% below peak and then willing to negotiate more. You might think you'd get no instructions but i bet you'd get motivated sellers and a lot of potential buyers who wouldn't have to waste time looking at all the unrealistically priced stuff.. Setting a new marketplace if you like, getting ahead of the curve.

You could attract whole chains of people, simultaneuosley (sp) dropping their price to get the deals through. quick turnover, low commision.

Actually, i'm not enough of a ***** to be an estate agent but why hasn't anyone else done this? this would work, no?

The problem at the moment is that that everything has ground to a halt. We're in limbo, suspended animation and waiting so nothings shifting all the while, EA's will go out of business.

Maybe you should hook up with Ajay.

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you forgot a cheap suit.

Mind you, must take a bit of time to write up the dimensions.

And the hair gel. That probably eats up most of the budget.

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In the 2007 - 2009 stage of the house price crash Estate Agents were going out of business at a fair old rate. Then we had QE, the Base Rate cut to 0.5%, and SLS with Estate Agents cutting their staff teams to the bone and developing their Letting side of the business and the number of Estate Agencies going out of business reduced greatly and stabilised. However, more recently with demand falling further, obtaining mortgage loans becoming ever tougher, and Estate Agents beginning to compete with asking price reductions there now seem to be reports of Estate Agencies going out of business appearing regularly again. See for example:

http://www.halesowennews.co.uk/news/worcestershire/8394838.City_estate_agent_is_forced_to_call_time/

Is this a developing trend?

I have been wondering how the estate agents have been earning a crust, as the past few months nothing in my area on right move is selling.

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I might set up an estate agency.

I'd only take on houses which are priced at 30% below peak and then willing to negotiate more. You might think you'd get no instructions but i bet you'd get motivated sellers and a lot of potential buyers who wouldn't have to waste time looking at all the unrealistically priced stuff.. Setting a new marketplace if you like, getting ahead of the curve.

You could attract whole chains of people, simultaneuosley (sp) dropping their price to get the deals through. quick turnover, low commision.

Actually, i'm not enough of a ***** to be an estate agent but why hasn't anyone else done this? this would work, no?

The problem at the moment is that that everything has ground to a halt. We're in limbo, suspended animation and waiting so nothings shifting all the while, EA's will go out of business.

No, can`t work until the belief in property having an inherent high value is smashed. The spending review is the first stage, not long now until total collapse of the housing market from both ends, EA`s and delusional "homeowners", there has been too much brainwashing, and it is far too late to sell now for anything remotely approaching peak price for the majority of homedebtors.

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Unfortunately, I doubt it.

I mean, what overheads does an EA actually have?

A bit of ground rent in a pokey shop, a bit of petrol and shoe leather, a few prints to hang in their window.

er... that's about it. Add to that they just have to, en masse, start charging to market properties (if they don't already).

Well, in my local town - 50k in rent, 7k in business rates, software (often rented), computers, printers etc. Rightmove and other portal subscriptions, cars, phones, petrol.

They'd need a couple of good house sales a month to cover their overheads. 4 or 5 to cover employing staff and making a bit of money for themselves.

In the bad old days a busy EA was selling 20 properties a branch. Around here that would stack up to 80k in fees. Big money when you think overheads in total wouldn't be more than 250k.

No wonder they use to spring up like flies - anyone with half a brain who worked for an agent and had a bit of money to get started - would open their own agency.

About a year ago - maybe 18 months - new guy started up in town - right in the middle of the slump. Shop smack in the middle of town - new lease, high overheads. I thought he was certifiable. He's taken about 30% of the business in the town at a guess (number of his boards up).

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No, can`t work until the belief in property having an inherent high value is smashed. The spending review is the first stage, not long now until total collapse of the housing market from both ends, EA`s and delusional "homeowners", there has been too much brainwashing, and it is far too late to sell now for anything remotely approaching peak price for the majority of homedebtors.

They're still selling pretty close to asking around here. Not that many, but they do get away.

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What would be really good is if the EAs realised that no sales means no pay and started encouraging low offers and the acceptance of low offers.

I think they already do this more often than you realise. When I put my house up for sale all the EA's wanted me to market it at under £200K as that was "the area price". However, it was the best house in the street as it had a massive extension and was fully renovated so I insisted on £210K. It sold in 3 days to the first viewer for full asking price which proved I was right and I probably could have got £220K for it.

There really is no incentive for EA's to get you the best price as they still get a tidy sum of money whether it goes for the full asking price or £20000 less. At 1% fees they got £2100 from me but it would have still been £1900 if I'd got a full £20000 less for the property. So I take a massive £20K less and they only lose £200.

The key is for EA's to be persuasive enough to get sellers to reduce the asking price quickly once they realise there is no interest, which is what I agreed to do had there been no interest in my house within 4 weeks of going on the market.

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I might set up an estate agency.

I'd only take on houses which are priced at 30% below peak and then willing to negotiate more. You might think you'd get no instructions but i bet you'd get motivated sellers

I bet you wouldn't.

There are already some EAs that state that they target BMV properties and for the most part they are as overpriced as all the rest.

Punters go with the EA who tells them that they can sell the property for the most money, even the ones motivatyed to sell

tim

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  • 140 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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