An online agent which advertised expensively on prime time TV slots as well as on the London Underground appears to have shut up shop.
This is according to an online blog, Selling Up, which specifically looks at the online agency sector.
Its blog alleges that the online agent could have spent hundreds of thousands in promotion while barely increasing its listings.
Homeseller, run by Anthony Quirk – a cousin of eMoov founder Russell Quirk – advertised in slots on The X Factor, costing it many thousands at a time.
The advert featured well known actress Sarah Parish, whose credits include Cutting It, W1A and Broadchurch.
However, the Selling Up site suggests that Homeseller’s spend may have been wasted money.
It says: “A retrospective look at the company’s property listings history reveals that at the time of the first TV ad they had around 16 properties for sale, and weeks later in November 2015 that had risen to just 25 listings. By December 2015 that had gone up to 36 and by the following April they had around 50 listings.
“Compared to the several thousand properties on the books of the big online estate agents that they were trying to emulate, the number of listings were clearly very low. The cost per acquisition of each new property for sale must have been in the many thousands of pounds during this campaign.”
Yesterday, the Homeseller site looked closed, simply featuring a logo but nothing else.
The Rightmove link suggested that the advertiser might be no more, with our search saying “We’re sorry, something has gone wrong with this page”.
While it is clear that Anthony Quirk runs a number of highly successful businesses, including a high street agency on Canvey Island, Essex, he did not respond to our emails yesterday requesting information. We will of course carry his response as soon as we get it.
Here is how we covered the ambitious launch of Homeseller: https://www.propertyindustryeye.com/watch-out-theres-another-quirk-about/
The link below shows what Selling Up thinks – plus those apparent TV adverts.
http://www.sellingup.com/online-estate-agent-homeseller-x-factor
Russell Quirk yesterday said that he knew nothing about Homeseller, but did say that the costs of launching a successful online agency now look to be astronomical.
He said that at a very recent meeting in the City, Purplebricks founder Michael Bruce said it would now cost £100m to get such a venture up and running –compared with the £50m Purplebricks had raised.
it’s not really the start up costs that are the killer; keeping up appearances costs money, lots and lots of it. A couple of agents I’ve looked at spend a huge and I do mean huge amount of cash just to have any kind of public awareness.
An agent that’s spending £1.5million a month on telly advertising to earn £1000 has to list 1500 properties just cover it’s adverts before it pays for staff, portals and other fixed costs, Even the tin-pot triers who only burn £50k a week need to secure 100 listings each and every week at their much cheapness, prices slashed, come and grab me fees just to keep feeding the sausage machine.
Typically an agent’s premises cost about 10% of turnover, it sits there 24/7/365 constantly whispering, “We’re here when you need us” “We’ve been here a while” “remember us? we sold you your home!”
I just don’t understand how anyone ever thought spending, in one case, 63% of turnover to replace a fixed cost of 10% of turnover was a saving especially when the expensive option is only fractionally as effective.
I guess if you are spending someone else’s money the costs don’t really matter.
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Spot on. The burn rate of some of these businesses is very fast indeed and most will fail.
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One firm that I’ve been tracking only listed 36% of what they need to in January in order to cover the burn demonstrated in their last published accounts. With a commitment to list on portals and pay staff plus all the other fixed costs I can only conclude they have very understanding (gullible) investors.
In 2014 the internet listing/ FSBO/ pay to list sector % market share was claimed to be 5% with predictions of a 16% tipping point being achieved by mid 2016.
The fag packet figures I keep to end of January 2017 show the % market share has contracted to 3.6% in a market that is currently contracted down by 21% or more on listings. It isn’t looking great for anyone right now but those with loss leading fee structures will be hit by a market contraction they can’t solve by reducing listing fees to attract more business.
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To put some numbers on the claims; by mid 2016 the pay to list industry was literally banking on having 80,000 listings they currently have less than 14,000, just 17.5% of their predictions!
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So everybody go to google and click a few adwords from the online crew. Put their ‘rent’ up even more.
Estate Agency is to complicated. Its a retail, service, one 2 one, repeat, relate, therapy, patient business model.
How you can replace all of these things with a few cheesy adverts i dont know.
Praise the lord for allowing estate agents to find shelter for our sheep.
Bless you all
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Bless You….can you become my PR campaign manager? Your enthusiasm is infectious.
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Yes of course..i will work on a no sale no fee basis as well…
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If an agent can’t justify a decent fee, then what hope in Hell have they got in achieving their client sellers a decent sstc.
Cheap is what cheap does.
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The only reason we charge ‘so much’ is because there are to many of us..but this benefits the market. If there were a few of us the fees would go up from lack of competition.
1-1.25% isnt a conspiracy..its a reality of the market…a figure that has taken decades to be arrived at. A mix of service and competition that the public do actually feel is value for money.
Long liver honest agents who offer no sale no fee. Not #fakefees.
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1% is typically too cheap in the equation where 1.5% (plus) can be utilized to often achieve the seller a stronger or higher sstc.
The failure of sole agency is that its ‘lone’ agency and typically means no sole agent can reach all buyers. Alike lone agency restricts agents from reaching all available stock.
Equally, budget online only agents often fail to have an applicants register or greater reach to local buyers outside the internet. With RM and Z only marketing, a big % of buyer reach is lost = client sellers achieve less service and likely a worse sstc.
Increase the dynamics of agents accessing more stock and more outlets and the higher fees become easy to justify.
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Just out of interest, was it yourself Trevor that was pushing a “multi agency” concept, as it sounds like that what your leading up to here?
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Yes. And MLS works.
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I was revisiting messrs, Quirk, Bruce and EasyPropertys’ promises, claims and predictions to the public, industry and investors over the past couple of years the other day and almost none have proved to hold water or come to pass. Falling sector market share, increasingly desperate offers and adverts suggests that, far from the predicted positive “tipping point” and “things getting really exciting” in the sector, we will see further failures, mergers and changes to the original business model.
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Budgets need around £500 to break even. The coming of more cheaper models for basic listing is the biggest threat to budgets gaining and sustaining VC funding to keep going..
Budget agents are also opening opportunities for proper negotiators to act as buyer agents and take a decent fee on sstc savings, based on the fact many budgets do little to negotiate a client a best price.
Budget agents as we know them at £700-£1200 are under great threat to survive from newer models claiming ‘We can save you £hundreds’ in the race to the bottom.
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The reality is that PB and in particular the best of the “traditional” Agents are slowly but surely strangling much of the “online” competition. Very few if any of them are listing enough to be viable without continuing outside funding. EG Easyproperty look to be listing circa 150/month, Emoov around 400/month. With numbers like this at their low fee levels profit is a long way away. As the year progresses reality will dawn on those investors who so far have kept these businesses going that their money is simply going into a black hole, never to be seen again.
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so if one firm was doing 73% of your numbers and the other 54% that would be a really really bad thing?
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And yet PB has still to yet make a profit…. a real profit not and not one of the smoke and mirror EBITDA hidden profits which arnt an actual profit most people would understand.
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…..can anyone explain in plain English how an EBITDA profit is calculated
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take 6 dice, shake them thrice, add the total and adjust the figure to a number that falls in line with what you reckon
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Earnings before interest, tax, depreciation and amortization (EBITDA) is a measure of a company’s operating performance. Essentially, it’s a way to evaluate a company’s performance without having to factor in financing decisions, accounting decisions or tax environments – google
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It is calculated to mislead the gullible that a given firm is making bankable profits.
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Actually it’s done off the back of horoscopes!
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AgentV – you ask ‘…..can anyone explain in plain English how an EBITDA profit is calculated’
Allow me to repost my calculation formula for clarification:
“EBITDA accountancy?
You know – gross income less the cost of the stamp needed to post the accounts to Companies House?”
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Part of an old posting for those that missed it.
See part of an article by Ted Gavin entitled ‘why EBITDA is a great big lie’below.
EBITDA doesn’t provide any consistency check for a company’s accounting practices as to how it arrives at its cash flow reporting.
For example, I worked as a restructuring advisor on a case about 10 years ago where some of the related warehousing operations (who were not my client) reported EBITDAR (Earnings Before Interest, Taxes, Depreciation, Amortization and Rent). We joked that, when you’re running an operation which is primarily real estate, the one thing that you have in abundance is Rent. So why exclude one of your principal operating expenses? I’ve seen this used often in retail operations as well – take a large, undeniable expense category and turn it into a positive, by choosing to report it in a manner that artificially inflates cash. What’s next – EBITDARE (EBITDAR, plus all other Expenses)? I’m sure if we go through the exercise, we’ll find that even the most under performing company will look great on EBITDA once we add back all of its expenses.
Have PB gone the EBITDAM route…Earnings before interest, Taxes, Depreciation, Amortization and £10 million plus of TV and other Marketing?
S. Keyser previous postings may agree?
The full article spotted by PeeBee above is linked below:
http://www.forbes.com/sites/tedgavin/2011/12/28/top-five-reasons-why-ebitda-is-a-great-big-lie/2/#4cf82647beb2
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Wow.
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“Russell Quirk yesterday said that he knew nothing about Homeseller…”
Yeah – right!
Some might think that, considering the pair’s names are inexorably linked on the Directors’ lists of several companies (many of them having ‘Dissolved’ status – potentially leading folk to the assumption that the pair have sulphuric acid coursing through their veins in lieu of blood…); that they are related to each other and work in the same industry, supposedly doing the same things; and the very fact that THAT Quirkster is a self-propelled gob-on-a-stick “Pwoperdee Commentator” on any matter that will get him or his company a column nanometer (regardless of how shameless or embarrassing it is for them or for the industry they exist within) – that his Essex-boy impression of the loved and sadly missed character that was the alter-ego of the Late, great Andrew Sachs is yet more unadulterated shut of the bill.
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I havent had a chance to read the whole thread but has Trevor been on and mentioned shared listings being the way forward yet?
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Ha ha, brilliant.
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“Purplebricks founder Michael Bruce said it would now cost £100m to get such a venture up and running –compared with the £50m Purplebricks had raised.”
Bagshot in my opinion you can start any business on small onions if the basic business works then you go large.
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Property Paddy sounds like they are looking for another £50 million to me?
Some joke spin suggestions:
How clever are we, any other company would have blown £100 million?
How about I know we have not made any money but we have saved our investors £50 million?
Having included the £50 million saving in our EBIDTA calculations we have made a substantial profit this year well in excess of our wildest predictions?
Looking forward to any future tweets!
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