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