easyProperty and Guild – and why I think this deal ‘stinks of fear’

The deal involving easyProperty and The Guild of Property Estate Agents permits the latter’s 5,000 agents, plus those in the Fine & Country network, to offer fixed-price online sales and lettings packages.

The online service, which will be offered alongside the members’ traditional estate agency service, will be provided via the platform of the struggling online agent, easyProperty.

Early reports from EYE show that around 30% of the Guild’s members who have attended roadshows on the subject have signalled that they will take up the offer.

I have to ask why is this offering so appealing to these agents.

The Guild itself has commented that the easyProperty brand has many strengths and weaknesses, and says it is not a brand that would be associated with the core traditional business of its agents. This claim is hardly a ringing endorsement!

A flawed easyProperty brand might be better than the alternative when entering the online space. We have seen Countrywide launch their own online offering under their existing recognised brands. I find it hard to see how their team will be selling their online offering effectively.

Potential vendors will be calling up wanting an internet service and the team have to downplay its quality to try and upsell them to the full package just to earn any commission: corporate cannibalisation at its best!

Today’s consumer knows the price of everything and the value of nothing. I want to call on the agents within the Guild to think about value: what value they create for the customer and why that’s better than any online agent. What value they have created within their brand and why they shouldn’t be tempted to cheapen it.

This move stinks of fear. The face of our industry is changing but this is an ill thought through response to the challenge.

Highlighting consumer confusion

At Spicerhaart we recently conducted an extensive survey that displays the decision dichotomy facing customers when selecting an agent.

In a sample of just over 2,000 home owners across the UK, only one in ten said they had used an online agent but many more said they would consider using them in the future.

Respondees were asked what motivates vendors. Is it the price they pay the agent or the net value that ends up in their pocket that’s really important to them?

Around 78% want to get the highest price for their home rather than pay the smallest fee, with the remainder happy to get less for their home rather than pay a higher fee.

At the moment, vendors who are yet to attempt to sell through an online agent aren’t connecting up the dots. The majority of online agents are paid to list your house. Once it’s up on Rightmove, it’s up to the vendor.

The 78% of home owners wanting best price will always exist; the online agents that don’t address the needs of that many will cease to trade unless they can evolve their model.

We note that consumer perception of online agents is incomplete. They believe online agents and traditional estate agents are the same – they both sell houses. It won’t be long before the most tried and tested form of marketing in the world – word of mouth – takes hold and that perception starts to shift.

I do believe there is a place in the market for a cheaper fixed-fee offering and some people will be motivated by speed and necessity rather than by value.

However, as with all disruption in any industry, it’s the poor imitation of early adopters that brings the rest of them back down to earth with a bump.

Throw party politics out of the window, we need some economic calm

The fallout from the General Election and a hung parliament is potentially bad news for business and the economy.

We need our politicians to ensure that the UK message to the world is that we continue to be open for business and that our economy is far more important than party politics.

It is estimated that 40 estate agents are ceasing trading every month, chiefly because of the lack of houses going on the market as people become less confident about selling. Therefore, in the coming weeks, the decisions made by the Chancellor are critical.

Future housing policy will be a key priority for this minority government, to increase the supply and get Local Plans of councils approved quickly.

I am calling on ministers to ensure every possible chance is given to first-time buyers to gain a mortgage. Currently, young people who have rented successfully cannot use this as part of their financial checks. This is ludicrous and prevents many being able to come forward to buy.

Brexit will also dominate the political agenda for the next two years. It is vital that business is more involved in these negotiations and we should not be shunned by politicians on both sides of the channel.

 

  • Paul Smith heads up estate agency group Spicerhaart
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26 Comments

  1. Simon Bradbury

    “I want to call on the agents within the Guild to think about value: what value they create for the customer and why that’s better than any online agent?”

    The value is created by the offer of choice for the consumer.

    That’s what The Guild and Fine & Country have always done for their customers ( that’s us estate agents) – offer choice and value.

    …and that’s what Guild and Fine & Country agents are therefore able to offer their customers… choice and value.

    It’s really not that difficult to understand,

    This item is so biased, It’s almost as if Paul Smith has some sort of agenda against The Guild/Fine & Country!

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  2. abull2810

    is that the intuitive Paul ‘On The Market’ Smith saying don’t do it? Where do I sign up?

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  3. Thomas Flowers

    Question

    So if Guild/easy property manage to build this unholy union into another billion pounds listed company, apart from providing the massively expensive structure to achieve this valuation for free, whilst paying £500 per month for the privilege of losing money on every deal- what do their participating members really get out of this deal?

    Did it cost easy around £11,000 to list each property prior to this union?

    Why don’t members negotiate……call it £5,000 now?

     

     

     

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  4. ARC

    Paul Smith says don’t do it I can see the 30% of members interested growing rapidly through today.

    In all seriousness I have to confess that if I was a guild or f and c member I would be on board with this.

    i can offer it completely separate to my existing businesses with no connection between the two so no diluting the brands. This way I get to mop up those vendors that are firmly in the DIY camp that currently I can’t offer them anything.

    seems a no brainer to me as long as it doesn’t lose me money which means starting up on a skeleton staff and little set up investment meaning that it’s subs ago be paid and little else.

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    1. smile please

      As an up market brand you will take the commercial choice to spend £500 pcm to list properties at £595.
       
      The world really has gone mad!

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      1. ARC

        Probably not in the Cotswolds but in a large urban market where there is a real demand for a DIY agent yes I think I would especially as my £500 pcm is paying for a large portion of the back office and support cost as I understand it from those in the know.

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  5. BestInTheRoad28

    My thoughts re posted again.

    Its shocking to think that any Guild member would even consider taking up a license which will earn them £365 per property sale. Clearly this is a last ditch attempt for sleazy Property to get a foot hold in the online business. This is OnTheMarket take 2, scare mongering estate agents to purchase a license (only 20,000 address’s per license btw) and sign a letter of intent now before its too late!!! Please read carefully the letter of intent and their fee structure to see how scandalous this is. Guild members should unite against this asap and seriously consider their Guild membership.

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  6. FromTheHip64

    The Guilds new alliance with easyProperty has one major flaw that will prevent it from succeeding……….easyProperty. Everything about the brand screams cheap & no frills. Fine if you’re catching a quick flight to Spain but not to sell your main asset. It’s the worst possible brand to be associated with if you’re a reputable, full service high street agent trying to maintain a half decent fee.

    If a seller really wants to go for an online agent then the Purple Bricks brand has a more professional, polished and established appeal. EasyProperty won’t make a dent in PB’s market share as long as they are easyProperty

     

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    1. Estate_Agent_Memes

      Purple Brick are terrible to deal with in every way. They simply won’t last. The % of unhappy customers they have is staggering. This is why they have removed the facility to review them on their Facebook page. 
      It’s laughable…oh and have they made a profit yet?? A PROPER profit? lol 
      Please don’t take my word for it:
      https://uk.trustpilot.com/review/purplebricks.com?stars=1
       

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      1. smile please

        …… For an unbiased view look at Allagents, PB do not control what is posted there.

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        1. Estate_Agent_Memes

          I’ve just been blocked by PB Facebook page because of my comments on there! pahaha

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  7. gk1uk2001

    My understanding of this arrangement with the Guild and their members is that there is absolutely no obligation on them to take up the easyProperty offer, and if they do, there is absolutely no obligation on them to offer it alongside their existing proposition. It is simply a standalone product that gives them the potential to get a foot in the door of those properties where they may not have had the opportunity previously with those vendors that want to go down the ‘DIY’ route rather than the traditional approach. I may have this wrong and if I have then please feel free to correct me.  ARC seems to have covered it perfectly with their comment above.

    Whether we like it or not, the online option is here to stay and I can’t see it going anywhere in a hurry (although the number of companies offering it may reduce) so why wouldn’t we as an industry want to at least have the option of being able to offer this service to those clients that are dead set on doing it?

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    1. ARC

      Thank you kindly sir, for the acknowledgement.

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      1. AgentV

        gk1uk2001

        ‘It is simply a standalone product that gives them the potential to get a foot in the door of those properties where they may not have had the opportunity previously with those vendors that want to go down the ‘DIY’ route rather than the traditional approach. I may have this wrong and if I have then please feel free to correct me.’ 

        This might be worth it if Eazylisting delivered vendor leads to you, that you did not already have…..but that simply isnt the case is it, they cant deliver enough leads to themselves to be viable.

        Therefore why not just consider offering your own ‘Basics’ or ‘Essentials’ product to the DIY brigade for half your normal fee paid up front? Have it with the back up they can switch to your full service offering at any point and you charge your normal fee, less what they have already paid! 

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        1. ARC

          Wow leads on a plate you don’t want much do you!
          The reason for not doing as you suggest is that will dilute the brand that has been built up over many years and if it doesn’t work you have made that brand look bad. The easyproperty route means you can try it with no risk to your existing business and if it works great if not serve out your notice and give the franchise up. Knowing some guild members though I have every confidence that if they choose to do it then they will make it a success as in the main they are all good operators.

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          1. AgentV

            If you are not getting leads, what are you paying £500 p.c.m for?
            Also if you do this product you then have to promote it yourself seperately, to generate your own leads, with all the cost incurred in that. Why?…because you don’t want it to be offered to your own customers and dilute your own brand. Do you then have to use different staff and a seperate office, in case people start assosciating the two offerings? 

            I revert to my original idea, save yourself £500 per month, and if you come accross a DIY vendor offer him both models, where he knows he will have to put the many man hours into organising his own viewings, and may well not be able to negotiate as good a sale price, with his own less experienced negotiating skills. You still give the same level of superb marketing you will always do (I hope) and the chasing of any sale through to completion (so better than an online lister service).

            You just miss out the time consuming bit in the middle, and your vendor pays less up front, but on the basis of whether he sells or not.

            I’ve test offered it in the past and most potential DIYers then want the no sale no fee full service and full negotiating on their behalf for the sake of saving themselves £1,000 to £1,500.

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        2. gk1uk2001

          Agent V, I’m not suggesting that it’s a viable or workable model that The Guild/easyProperty are offering, just saying that I think most people are misunderstanding what is being offered to the Guild members. I’m not a member of the Guild so maybe my understanding of it is completely incorrect, although having spoken to Guild members I think that what I’m saying is essetially right.
          These discussions about online only agents seems to get some people really fired up! If people don’t think it’s a threat to their business then why get so irate about it? Just keep doing what you’re currently doing and let the onliners get on with it.

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          1. AgentV

            gk1uk2001

            I am not criticising your views. Please don’t think that is the case.

            My suggestion is just an alternative idea that agents can take or leave as they see fit. I have no beef on guild or easy either way.

            I also think there are much better alternatives being developed for independents that are on their way….ways of enhancing existing brand and generating more business leads…rather than offering a seperate cheap brand with a low level of service.
             

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    2. Estate_Agent_Memes

      We’ve all been online agents since Rightmove was born.
      We are giving too much credence to a business model that will not have the success IT says it’s going to have.
      Just remember PB hasn’t been the success it said it would be by now, how is this going to change? They’ve had enough time and had massive TV campaigns to promote them.
      Easyproperty and The Guild may survive but won’t be worth it. The Guild will see it just as another income stream for them, all they ever want to do is cross sell to their members. 

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  8. Steve_Smithson

    Can someone please clear up how many agents are in the The Guild of Property Estate Agents? Paul mentions 5,000 in his article above, but their website says … “with a national network of approximately 800 independently owned estate agents”. Which is it?

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    1. gk1uk2001

      Around 800 I believe

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  9. RAL

    Couldn’t On The Market re invent itself as the online version for its members or is that too far fetched…..  only a thought…..

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  10. AgentV

    Why just not half your fee as an up front payment option for  your  ‘essentials’ or ‘basics’ offering.

    That way you get all of the fee  and not just part of it. You pass all the viewing requests onto the owner who arranges them and carries them out, and then negotiates his offer.

    You pick up the cause with the contract chasing after the event, making sure it completes.

    Throughout you pick up any extra business and it is your board up outside the property advertising you’re services, rather than a national online lister service.

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    1. ARC

      See reply above

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  11. Chrispy

    Paul I always have an agenda, listen to me, on the market is the future, flink is the future, Smith

    Very interesting views zzzzz

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  12. ClareG08

    At last, someone commercial enough to see the opportunity! 

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