Here We Go. Agent Struggling

[spunko2010]

Reported by Henry Pryor.

https://mobile.twitter.com/peterproperty/status/756377766820536320

I'd like to repeat my earlier prediction (h/t to venger) that agents will be the driving force of downward pressure on prices to start as the market just isn't moving and they need those commissions...

[spunko2010]

http://stopthepress.propertyindustryeye.com/224e4b6e11ef05ce88680cff3a1a004c.html

[Patient London FTB]

Reported by Henry Pryor.

https://mobile.twitter.com/peterproperty/status/756377766820536320

I'd like to repeat my earlier prediction (h/t to venger) that agents will be the driving force of downward pressure on prices to start as the market just isn't moving and they need those commissions...

You'd hope so, but the problem at the moment is there are simply too many agents, which means they will overvalue property in order to get sellers on their books.

We need agents going under, reducing their numbers to the point where they don't have to do that anymore.

[spunko2010]

They don't get paid for getting houses on their books though. They get paid when they sell them. And they aren't going to be doing that at current prices so now need to start being realistic with their vendors. Not an easy task to tell someone that your valuation was blx.

[rantnrave]

Online EAs must be eating into the profits of the more established players too.

I also think that the skew of older buyers in the property market has given traditional EAs a false sense of security that they are immune from digital rivals. If (big if) younger people get back into buying and selling property they are much more likely to be happy to use the services of an online EA, IMO.

[Patient London FTB]

They don't get paid for getting houses on their books though. They get paid when they sell them. And they aren't going to be doing that at current prices so now need to start being realistic with their vendors. Not an easy task to tell someone that your valuation was blx.

They don't sell them if they don't get them on their books first.

[spunko2010]

They don't sell them if they don't get them on their books first.

Of course, but something has to give. They can't keep quoting pie-in-the-sky asking prices and then whinge when they can't reach them and their takehome wage is down 75%.

[nome]

I reckon most agents these days are making most of their money by being predominantly lettings agents and residential sales is just a side business!

[thewig]

Mate of a mate who is an EA (decent chap on the face of it but haven't had to deal with him professionally) said their target is 97% of initial asking price.

"Any less than that then we overvalued, any more then we undervalued" seems like an arbitrary figure with no basis in much of anything. True story.

[Pop321]

They don't sell them if they don't get them on their books first.

Good point, Definitely some agents who are happy to overvalue and get the instruction.....then ask the buyer to reduce after a few weeks.

And there are definitely some agents who prefer to take less instructions and be 'more realistic' at the outset.

So less about what 'all agents' do.....rather than there is probably not a general rule for all.

Agree with main thread it feels like it will be agents who will encourage a 10% drop to 'refresh rightmove and get interest' rather than seller. Agents then say.....and if it's worth more you will get a few people bidding.

[thewig]

Can't these agents focus more on the letting side, just put all the rents up?

[stuckmojo]

I can't see why EA shouldn't go the way travel agencies have.

[Errol]

Agree. This will all move online and be virtually automated. The average EA does nothing of any use and is on borrowed time.

[Blod]

Can't these agents focus more on the letting side, just put all the rents up?

Surely, innit?

[SillyBilly]

Anecdotally, I have had a couple of leaflets through the door in the past 2-3 weeks from local EAs saying "We have buyers for homes in your area, sell your property with us". A nice wry smile from me while I escort them to the bin. This is North Hampshire by the way.

[thewig]

Anecdotally, I have had a couple of leaflets through the door in the past 2-3 weeks from local EAs saying "We have buyers for homes in your area, sell your property with us". A nice wry smile from me while I escort them to the bin. This is North Hampshire by the way.

I've had the same here in zomerzet, straight to bin also.

[Motor_Blade]

Anecdotally, I have had a couple of leaflets through the door in the past 2-3 weeks from local EAs saying "We have buyers for homes in your area, sell your property with us". A nice wry smile from me while I escort them to the bin. This is North Hampshire by the way.

Same here in East Lancashire, where prices are still fairly sensible. Desperation perchance?

[spunko2010]

Can't wait to see the July LR data.

[Peter Hun]

You might need a magnifying glass

[Sancho Panza]

They don't get paid for getting houses on their books though. They get paid when they sell them. And they aren't going to be doing that at current prices so now need to start being realistic with their vendors. Not an easy task to tell someone that your valuation was blx.

Also,there's a cost of carry when you have houses on your books.Doing viewings is a costly activity,including an hour of EA's time,plus fuel,plus office overheads.

If you're carrying 45+ houses,then you need to be transacting a couple a month to cover your basic costs(assuming you're charging 1%)

Agree. This will all move online and be virtually automated. The average EA does nothing of any use and is on borrowed time.

Online is the future,giving people access to RM and then them doing the viewings themselves.

[Eddie_George]

I'm seeing many more listings on Rightmove from internet EAs, particularly Purple Bricks.

[sideysid]

I can't wait to see EAs desperate and ringing around to drum up business. I remember in 2008 being hounded by the local firms and several smaller firms closing down and EAs losing their jobs. Good times ahead, not long now and they won't recover this time around due to DIY online options.

One particular firm I'll stick the knife in, is a local firm to me. A few years back I had a viewing organised and as I was running 5 mins late the EA had already left the property. When phoning up the EA firm they basically told me to get lost as they already had a BTL buyer, and I wouldn't be suitable even if I did make an offer. That made my blood boil.

[TheCountOfNowhere]

I can't wait to see EAs desperate and ringing around to drum up business. I remember in 2008 being hounded by the local firms and several smaller firms closing down and EAs losing their jobs. Good times ahead, not long now and they won't recover this time around due to DIY online options.

One particular firm I'll stick the knife in, is a local firm to me. A few years back I had a viewing organised and as I was running 5 mins late the EA had already left the property. When phoning up the EA firm they basically told me to get lost as they already had a BTL buyer, and I wouldn't be suitable even if I did make an offer. That made my blood boil.

Was probably deliberate to make you feel desperate.

In remember in 2008/2008 an agent crying on the door step and begging me to buy.

Same bloke that 2 months earlier was screaming down the phone at me as I wouldn't offer more than 10% off the asking price on a place.

Edited July 25, 2016 by TheCountOfNowhere

[“Nasty Piece of work”]

The bottom is falling out of Estate Agents. They have spent the last 20 years not having to sell, and only "buying" instructions. It has been the career of choice for the retarded member of the family. In the 19th Centuary there was the Church. Bless.

[rantnrave]

Pass the popcorn...

Foxtons will announce this week that its profits almost halved in the first six months of this year, it has been forecast.

Foxtons is due to report interim results for the six months to June 30 on Friday.

Broker Numis says the agent is likely to report profits down to as low as £12m, compared with £20.5m profits for the same period last year.

The first half of this year contained only just over a week when the Leave vote was known, but Foxtons swiftly issued a profits warning.

With the referendum result known on Friday, June 24, it issued a warning the following Monday morning, saying: “While it is too early to accurately predict how the London property sales market will respond, the upturn we were expecting during the second half of this year is now unlikely to materialise.”

The bank UBS expects housing transactions in London to be 6% down this year on last, and down a further 10% next year.

Foxtons shares have been down some 30% since the Leave vote was known. They sank a further 5% on Friday, finishing at 116.5p.

Meaning Countrywide shares start trading this morning after falling over 5% on Friday.

They closed at 240p having at one stage gone as low as 230.70p – a fall of 7.2%, making it one of the biggest fallers on the FTSE 250 in early trading on Friday.

As revealed in EYE on Friday, Countrywide is closing, merging and re-branding some branches. The extent is unknown, but is rumoured to involve the overall closure of 200 outlets.

Countrywide has totally denied the figure.

The story was not carried anywhere else and the media tied the fall in with LSL’s profit warning on Friday morning and Knight Frank’s house price sentiment index – see separate story.

Also hit on Friday were Zoopla shares, which finished the day down 4.82% at 272.40p.

Rightmove’s shares nudged only slightly down, just 0.76p, to end at 3,719.60p

LSL itself saw its shares go down 6.25%, ending the day at 272.40p.

http://www.propertyindustryeye.com/shares-in-estate-agents-start-new-week-after-jittery-falls/#comments

From the comments:

Cluedup

July 25, 2016 at 7:47 am

Martin and Co in difficulties too rumour has it