July 9, 2018 at 10:41 #58943
Few months back i said an agent in town had opened up with a very low fee to sell property on ‘no sale, no fee’ I forget the exact figure but it was around £800 inclusive of VAT (I tried to find the original thread but could not).
I said i would give them a year until i make an offer on their desks, well they closed after 9 months!
You may think the £800 to sell your house was a bedroom agent, it was not. They had town center offices and employed seasoned estate agents.
They lacked stock, obviously this meant less sales, led to less turnover and obviously no profit.
I worked out with all associated costs the office would cost approximately 10k per month to run (give or take a grand).
Over a year the running costs would be £120,000 at £800 per completion they would have had to completed on 150 properties. In our patch most agents sell 50% of their stock before it goes to another agent or comes off the market altogether. This means they would have had to list 300 properties a year or 25 a month from a new cold start office.
Our average fee at the moment in £ is around 4k meaning to break even at an office the size above we would only need to complete on 30 a year or just 2.5 sales a month. And with a 50% sale rate only be instructed on 60 a year or just 5 per month.
Why am i writing this? On a local scale the cheap agents cannot work. If you are worried about Tepilo, Emoov, Purplebricks do not be. They do not have the benefit of being local, they do not canvass, they do not have links to the local community. They are not referred instructions they buy them by way of media advertising and PPC – This costs them a fortune.
The business model is not sustainable.
If I am honest, our fee dipped from 1.5% in recent years to 1% this is down to us perceiving vendors will not pay a higher fee due to all our competitors (i do mean all) offering 1% or below.
However, couple of months back i told the team to try for 1.25% And you know what we have only lost 2 instructions on fee, but listed countless others at a higher fee than 1% making it worthwhile.
Moral of this story is there are always people looking for the cheapest deal but most people do value service and understand its what you walk away with that is important.
In the lack of an industry voice, i challenge all independents to spend 5 extra minutes on a valuation emphasising the importance of service. And try for a higher fee. Even if it is going from 1% to 1.1% at the end of your year it makes a big difference to your balance sheet.July 9, 2018 at 10:44 #58944
* On a side note, i would really like to develop this thread for independent estate agents. Lets use this as a best practise thread. Also offer advice.
Lets not make it an online bashing thread, enough of them and we all know the pitfalls. Lets start something that all true independents can use as a tool.
You maybe a neg, branch manager or owner. Lets develop this thread to help our industry.
If you have some advice, share it. If you need help ask. Lets just be decent human beings and be excellent at what we do while earning a fair wage for us and our teams.July 11, 2018 at 10:07 #59050
Here is a good basic tip,
Soon as you have booked a valuation, hand deliver a letter confirming the appointment and email them a copy. Shows as you are local you have the resources to offer top service and the email in case they are at work shows you are efficient.
Not earth shattering but do you do it every time?July 11, 2018 at 11:14 #59053
Hand delivery of appointment letters also allows you to check out kerb appeal and helps in comparable prep.July 11, 2018 at 11:16 #59054
A killer tip for appraisals is to put on overshoes when you first meet the vendor and explain that all prospective buyers viewing the property will be provided with same.July 11, 2018 at 14:55 #59066
Great tip on the over shoes, we use to do but stopped when we ran out a couple of months back, thanks to your prompt will order some more up today 🙂July 12, 2018 at 20:54 #59139
In this game, you need to master the art of passive aggressive
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