Jump to content
House Price Crash Forum
Sancho Panza

The coming era of estate agent poverty

Recommended Posts

Walking by Frank Innes the other day (part of Countrywide plc),I saw they've begun offering a flat fee service,presumably to respond to Purplebricks and the like.Tellingly,they're actually cheaper,despite maintaining a much larger physical network of costly offices.

I know some people who've used Purplebricks, and they stressed that they preferred managing their own bookings and taking their own calls etc due to the fact that they'd had previous experience of EA's not dealing diligently with enquiries.

I remember fifteen years ago my local High st having 2/3 EA's ,now it's got 10 or so.I presume we'll get back to 2/3 after a long slow grind to the bottom.With the scrapping of tenants fees (which they'll struggle to load up on landlords) and the clear price war in the sales market,the future looks bleak for EA's.

http://www.frankinnes.co.uk/sell-your-home/

'Sell your home your way

Manage your sale yourself with our Flexi-Service package for just £795, or choose our Full-Service option and let us do the hard work for you.'

 

https://www.purplebricks.com/

'Your own Local Expert from valuation to completion

Instruct to sell for £849 / Landlords save £1,000’s

Selling fee of £1,199 in London and surrounding areas'

 

http://easy.com/images/pdfs/2016-10-21-on-line-estate-agents-continue-to-gain-market-share.pdf

'Mindful of the impact web-based start-ups have had on industries like gambling, taxi services and banking, traditional high-street agents are beefing up their own digital businesses, cutting fees and costs and cherry-picking the competition.

Fees from residential home sales in the UK are worth about 4 billion pounds a year, according to government data. Online agents' fees of between 500-1,000 pounds have pushed traditional estate agent commissions down to around 1.3 percent of the value of a sale from about 1.8 percent five years ago, according to analysts at UBS. They see fees falling further, to 1 percent.

The industry is highly fragmented with the UK market leader Countrywide, which has 822 branches, having only a 5 percent market share. Rightmove, the country's top property portal reckons the many web-based agencies now account for 5 percent of its listings having doubled their share in two years. This may herald a wave of dealmaking.

The industry employs around 250,000 people. Rob Ellice, chief executive of easyProperty, backed by easyjet founder Stelios Haji-Ioannou, says it operates on about 20 percent of the staff of a traditional real estate agents.

Purplebricks has had to work hard for its success. It spends 1 million pounds a month on advertising and is currently lossmaking. It expects to become profitable this financial year.'

 

 

Edited by Sancho Panza
apostrophe

Share this post


Link to post
Share on other sites

With the majority of those who are buying and selling houses in this country well into the second half of their life, estate agency has IMO escaped much of the disruption caused by online innovation which other industries with a large high street presence have had to adapt to (travel agencies, banks etc). This is finally changing.

Share this post


Link to post
Share on other sites
11 minutes ago, rantnrave said:

With the majority of those who are buying and selling houses in this country well into the second half of their life, estate agency has IMO escaped much of the disruption caused by online innovation which other industries with a large high street presence have had to adapt to (travel agencies, banks etc). This is finally changing.

As far asI can tell, no one, bar the very odd stroller by, looks into EAs windows these days.

All Rightmove.

MOst towns have a sendary streeet dedicated to putting up photos that noone look at.

That street will now move to 4 or 5 offices on an industrial estate (much cheaper rates).

Another beating for small town commercial real estate.

Made funnier as mst EAs pension is the commercial property.

Share this post


Link to post
Share on other sites

Flyer through my letterbox today from online agents Linkhomes..

Xmas offer to sell any house for £500 plus VAT.

Shop window agents round here are selling bugger all, so this Yuletide offer will please them...not!

Share this post


Link to post
Share on other sites
28 minutes ago, tyres said:

 

il_170x135.916972681_gzod.jpg

Whilst broadly agreeing with all the sentiment on here. It could quickly deteriorate into the I don't know why sales people get paid so much thread. The fees as a percentage of house value are patently wrong and hence you will see a reversion. Outside Houses the opposite is happening (my personal theory is people are more socially inept and insular than 30 years ago) the example I would use is selling cars of a reasonable value. 25 Years ago no one would use an agent now very common and people are happy to pay say 10% for the privilege.

I would be quite happy to pay a fee in the region of £5k-£10k to move a £1 million pound house which would equate to the 3-4% charged on the same house when it was £350k 20 years ago

 

Share this post


Link to post
Share on other sites

These idiots deserve to have their industry completely destroyed.

As business that has a model highly dependent on turnover and volume, who have chosen to cannibalise the liquidity by convincing one side of their client base to price out the symbiotic other.

New probate sale near me this week. eye watering price that

* would trigger inheritance tax completely unnecessarily and now means HMRC will ask questions when that price doesn't get achieved because...

*...Unless someone completely idiotic turns up, even ignoring my own opinions of price (3x what is worth), the price is awful compared to direct current competition and it wI'll just not sell. There's another place down the road exactly the same size and same price that looks modern and maintained. This one hasn't been touched in 30 years and looks very tired indeed.

The agent who seduced the inheritors to place it on at that has shot everyone in the foot. Provided that people just have a cursory look at other houses in the area beforehand, this is going to hang on their books indefinitely.

 

 

Share this post


Link to post
Share on other sites

My company signed up countrywide recently as a client, the premise being we offer them an online platform to start marketing their rental properties online. 

 

Edited by casual_squash

Share this post


Link to post
Share on other sites

I've said previously on here, I'm convinced that for at least the couple of years the EA's in my area have been making just about all their money from lettings fees, stock levels and sales volumes have been so low they can't possibly have been making any meaningful income from sales commissions... selling houses has just become a minor sideline, picking up the occasional billy bonus from managing to flog some overpriced s***hole.

 

With the forthcoming ban on lettings fees I can only hope this forces EA's to get more realistic on their valuations and stop pandering to vendors egos and deluded expectations.

Share this post


Link to post
Share on other sites

 

1 hour ago, casual_squash said:

It's a changing climate out there. 

The PRS sector is set to see huge growth, not from the small BTL buyer anymore but from the large corporate money. 

I work with a major IT property software property company. Commercial is slowing down but PRS is set to growing a big big way. The bottom line is for cities especially the corproates are going to deliver decent apartments with superior facilitates than you'd ever get for the same rent from a cowboy landlord in a sh1thole BTL. 

That seems to be the way it's going for cities anyway. 

What's this?  Your second post about house prices now you've eased in on the Hilary, Trump and Brexit threads?  Or actually 3rd post about house prices given near identical one to above posted on another thread today.

Yeah it's changing alright.  BTLers squealing, some coming to market, and no way corporate going to buy everything up at top prices.  There's a HPC coming.

On 13/05/2016 at 3:16 PM, casual_squash said:

Your years away from it making any serious dents.

The main market for now is city living professionals who can afford these rents, from what I'm seeing in the pipeline for the next 2-5 years.
The rents on these places are high though so it still leaves a lot of room for others to hoover up.
 
We're only talking about certain cities still.
One notable client over the past year dumped it's entire portfolio outside of London, that's where the main focus money is for now.
 
As for smaller provincial cities/towns I don't see much changing any-time soon.

 

Edited by Venger

Share this post


Link to post
Share on other sites

Agree with the coments on pricing, but seriously I keep getting lot's of new instructions via my email, but absolutely nothing  is realistic price. 

As for EAs vs managing you sales, manage it yourself you can see all the buyers, not just those the scumbag EA wants you to see..

Sooner they go under the better.

Share this post


Link to post
Share on other sites
49 minutes ago, nome said:

I've said previously on here, I'm convinced that for at least the couple of years the EA's in my area have been making just about all their money from lettings fees, stock levels and sales volumes have been so low they can't possibly have been making any meaningful income from sales commissions... selling houses has just become a minor sideline, picking up the occasional billy bonus from managing to flog some overpriced s***hole.

 

With the forthcoming ban on lettings fees I can only hope this forces EA's to get more realistic on their valuations and stop pandering to vendors egos and deluded expectations.

That`s a very good point..it could be a shape up or ship out time BTL are not going to suck up the cost if EA`s try to pass them on 

Share this post


Link to post
Share on other sites

Are agents happier now for multiple agents to list?

In my search area of Cambridge there are record low numbers of listings (23) however of those 23 listings 9 are multiple listings (3 properties listed with 3 agents). It looks like they are with 1 traditional local agent and 2 newer style listings only agents. I'm sure they used to demand a higher fee if you did that but maybe they haven't got the leverage to do this any more.

Share this post


Link to post
Share on other sites
20 minutes ago, Timak said:

Are agents happier now for multiple agents to list?

In my search area of Cambridge there are record low numbers of listings (23) however of those 23 listings 9 are multiple listings (3 properties listed with 3 agents). It looks like they are with 1 traditional local agent and 2 newer style listings only agents. I'm sure they used to demand a higher fee if you did that but maybe they haven't got the leverage to do this any more.

Whats the point of multiple agents? People look on RM. only.

Share this post


Link to post
Share on other sites
3 hours ago, Venger said:

 

What's this?  Your second post about house prices now you've eased in on the Hilary, Trump and Brexit threads?  Or actually 3rd post about house prices given near identical one to above posted on another thread today.

Yeah it's changing alright.  BTLers squealing, some coming to market, and no way corporate going to buy everything up at top prices.  There's a HPC coming.

 

Not sure why you keep tabs on my postings? 

You seem to be getting the wrong end of the stick. I'm not saying investment money is going to be a white knight to BTL, quite the opposite. Its looking it'll gradually muscle in on the Private Rent Sector and actually free up more housing stock to sell. I'm talking at least a 10 year period here as that's the time it'll take to reap back their startup/build costs. It's undeniable investors are looking to PRS now where they used to for commercial. What many are doing are building entirety new apartment/mixed use properties.

So not your Traditional Terraces to let out, many aren't interested in that.  At the end of the day it's adding more housing stock and added competition to whats been the standard in the Rental market, I see that as only a good thing.

What that'll do to House price's or house buying in the long run I don't know. I was really just giving you my feedback of what's happening in the rental market which we've really not seen before. 

 

 

 

 

Edited by casual_squash

Share this post


Link to post
Share on other sites
5 hours ago, casual_squash said:

My company signed up countrywide recently as a client, the premise being we offer them an online platform to start marketing their rental properties online. 

 

Given the drop off in lettings fees,they're going to have to seriously reduce their High st presence to remain profitable.

Share this post


Link to post
Share on other sites
1 hour ago, spyguy said:

Whats the point of multiple agents? People look on RM. only.

I think some vendors believe the EA's when they give them their promises of buyers waiting to bite their hand off.

Share this post


Link to post
Share on other sites
1 hour ago, spyguy said:

Whats the point of multiple agents? People look on RM. only.

Just makes me think the house is vastly overpriced and/or has something seriously wrong with it.

Still you generally get 3 lots of poorly taken photos to look at and one of the agents usually has that kitsch "Jon and Pam have loved living in this spacious mid-terraced home, but now the children have grown up they are ready to let another young family grow together in this competitively priced abode"

Share this post


Link to post
Share on other sites
22 minutes ago, Sancho Panza said:

Given the drop off in lettings fees,they're going to have to seriously reduce their High st presence to remain profitable.

Which is what the software will help do. 

I don't want to sound like an advert but your talking about online lease signing, online viewings, the portal will allow them to upload download properties easily, automatic feeds to the Rightmove/Zoopla, apps for maintenance, apps for tenants/applicants. Then all that can tie into a back-office accounting software on the cloud which you could access at a central point.

So yep, you could see some reduction on the high street versus an increase to the online presence. 

 

 

 

 

Share this post


Link to post
Share on other sites
4 hours ago, spyguy said:

Whats the point of multiple agents? People look on RM. only.

Usually a kite flyer vendor will list with one agent, wonder why there are no viewings, then add agents as his sole contract expires at the same kite flying prices, hopeful that the additional listings will a secure mad hpi gainnzz. After that its usually rented, a second mortgage transferred to a new hpi gainzzz investment. 

Share this post


Link to post
Share on other sites

What's staggering is that this thread was written in December 2016, and not 2009 or 2010.  How on earth did EAs get away with avoiding the negative effects of internet efficiencies? We've written about this over and over on these boards over the years.  They somehow convinced us that estate agency services were unique and that their antiquated ways were to be preserved throughout the modern era. 

The last time I was in Northampton, Bridge Street had about a dozen estate agent shops.  Goodness knows how many EA shops in the town centre.  Kingsley Park Terrace (suburban area) out of about 30 shops, 4 or 5 were estate agents.   Well lit, well furnished, populated by 3 or 4 workers all smartly dressed.  In an era where everything is being paired back to the bone, it's bewildering how EAs have somehow kept going as they have.  Not only that, but now we are 8 years and counting into a housing market that is very quiet in terms of historical sales volumes.  Estate Agency is not only ripe for severe change, it was ripe for this change 6 years ago and before.  How have they even survived up until now?

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

  • Recently Browsing   0 members

    No registered users viewing this page.

  • The Prime Minister stated that there were three Brexit options available to the UK:   15 members have voted

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal

    Please sign in or register to vote in this poll. View topic


×

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.