Online versus the high street: Time to abandon the battle lines and get closer

Online vs high street.

This is the most frustrating and, frankly, boring term that is still bandied about by the property industry and in particular by journalists and investors that remain ‘fascinated’ by the deemed divide.

The consumer (the house buyer or seller in this case) could not give a hoot as to what ‘label’ the sector has applied to a particular agency.

So why should we care, except to try and differentiate one from the other when in discussions with investors say – but which, I’d argue, is actually a pointless and unnecessary division otherwise.

The fact is, this all simply needs to be looked at via a consumer lens first and then from a commercial perspective.

In other words, work out what customers now want and then tweak the financial proposition accordingly.

The consumer in essence asks just four questions:

1) Can I trust you to sell my home?

2) Do you have the credibility, track record and incentive to get me the best price?

3) Will you look after me properly?

4) Will you charge me a fee that I can relate to?

That’s it. Nothing more. Everything else is window dressing.

Whether your estate agency business has a ‘centrally located office position’ or ‘is part of a group that has London buyers’ – no one cares.

For sure, lots of For Sale boards as proof points locally and so on are important. But they are bi-products of 1).

Reviews are important and are a demonstration of 3), etc.

The rather too binary assessment of online being on the ‘radical left’ and high street on the ‘conservative right’ is unsustainable.

The centre ground will win

It’s my strong belief that, actually, neither the right nor the left will prevail, rather, as with all cleverly fought battles of conscience in politics for example, it will be the centre ground that wins.

Here’s why. The current online model is generally tainted by allegations of there being no incentive to sell given its charging model and a perception that service levels are ‘basic’.

This latter charge has been levied by high street agents keen to show that their higher fees are justified in return for a better outcome.

Now, much of the high street argument is anecdotal and not supported by data.

However it’s a decent argument against some (not all) online players where many are indeed just listing agents, not estate agents. Perhaps the consumer agrees and this is why, for now, online agent market share sits at 8%. It’s growing, but quite slowly.

At the same time, the top three online participants (Purplebricks, Emoov and YOPA) are spending around £40m each year on marketing between them.

The gap between this spend and short-term revenue whilst long-term success is awaited, is a very, very big one to bridge. Chasmic, in fact.

On the other hand, high street agents are also caught by perception. A perception that they do little and charge a lot.

This, in an Amazon world, is also unsustainable. A ‘9 to 5’ approach and an opaque transaction is the antithesis of what the internet generation now insists on.

On fees, I’m amazed. I’ve been banging on that fees can and should be lower because they are predicated around the high fixed costs of multiple high street premises that are largely unnecessary.

A £3,000 bill that’s based upon the necessity to cover office costs when the office is less necessary nowadays? At first this seems ripe for attack by a disruptor like me. But then…

Public’s move to online slower than I’d thought

Then you realise that ten years after the birth of fixed-fee online agents, 92% of the public are still engaging an agent based upon a higher, percentage based contingent fee. The adoption curve has turned out to be much, much shallower and slower to grow than I’d thought.

And so, what does this all mean?

Well, let’s return to that centre ground point. The part of the spectrum, the compromise even, where battles succeed and hearts and minds are won.

What if there were a collision of left and right. A smashing together, to use another political analogy, of social conscience and free market capitalism. Doing the right thing for everyone and also not being ashamed of financial success.

What I am advocating here, in fact what I am predicting, is that the estate agency of the future is a blend of these things.

The credibility and trust that an established high street brand invokes with a semblance of a branch network to provide that visible comfort.

Combined with greater territorial reach via a ‘virtual branch’ approach too that allows higher revenues without the constraint of rent, rates and refurb costs applying to a model that otherwise insists that to survive, every village and hamlet across the nation ‘must have a bold and prominent corner office’.

Next generation of estate agents will be a compromise

The next generation estate agency model is not low service, upfront fees, nor expensive and unnecessary high street premises that few visit.

It is a mix of the established branch approach, albeit diluted, at a justifiably healthy fee and one where an understanding of being able to grow market share but without the suffocation of a 1980s physical branch ethos, is key.

This latter point needs to be laboured for a second because those reading this who have never orchestrated such a model will initially think ‘Yeah ok, that’s actually easy to do I reckon’.

Think again.

Combining a totally different operational approach where listing negs work remotely and sales progression and admin is centralised and enabled by tech; with bespoke platform technology that does not exist ‘off the shelf’; plus a most unique way of marketing that combines digital and above the line, national and local – a truly multi-channel marketing strategy that ensures a business looks and feels local – is all very hard indeed to pull off.

It requires a proper experience of such a model and is not to be underestimated. But some will indeed under-estimate this challenge (think Countrywide and their catastrophic ‘Flexi’ endeavour or easyProperty and their B2B franchise offering).

Blend of online and high street

My suggested utopia is one of healthy revenues and lower agency overheads. But being clever about it. And agile. And unconventional.

With a challenger online brand bolted on in order to capitalise as this sector grows but whilst sharing the broader infrastructure of a parent company.

Think for a second where we’ve seen this before – the cigarette manufacturers buying eCig companies. BP investing heavily in solar and wind energy. And Amazon buying Whole Foods.

From the perspective of that all-important customer lens, this blended ethos ticks every box – the trust in an established brand/s to sell the home and to get a decent price.

The benefit of a business model that genuinely delivers efficiency and customer service at scale (centralisation tends to be more controllable and manageable that multiple branches). That is local. At a fee that, clearly, customers are happy to pay once sold.

‘Compromise is the destination of all successful arguments’ as will turn out to be our industry’s motto.

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57 Comments

  1. Robert May

    What he is essentially admitting is, he got it wrong! All that stuff about disruption? it was just cobblers and group-think! Agency is a service industry and  service can’t be disrupted by price.

     

    He’s failed to deliver the disruption he promised.

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    1. Robert May

      RM   I know a dead disruption when I see one and I’m looking at one now
      RQ   It’s not dead, its re-inventing itself……………

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    2. Simon Bradbury

      Hi Robert – are you not impressed that someone is prepared to admit that they may have “ got it wrong “ as you put it?
      I am.
       

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      1. Robert May

        See below. If the piece had started with an apology yes, but even  this self promo starts out with him blaming others for the cliche he’s pushed and promoted ad nauseum.

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        1. Simon Bradbury

          I respectfully disagree. It’s not about apologising – it’s about learning in my view.
          We have all learnt,and are continuing to learn, how we meet the the needs of our customers in a fast changing world.
          i think we are all getting closer to that point and this article will help.
           

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          1. smile please

            How does this article help anyone?
            It’s just Quirk gearing up for another round with his begging bowl!
            Do you not remember a few years back he was boasting he got his staff and their families to invest in him. Have they seen a single penny back? Are they likely to? 
            He has been wrong from the start and burnt other people’s cash. Now he has squeezed all the blood from the stone he needs to find a new angle to get his bowl filled.
            Why do you think these onliners / hybrids not raise cash from banks? It’s because the banks won’t lend them the money!
            Even investors are turn off PB with share price just above 2 quid and falling daily. 

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            1. JVSOZ

              I agree totally. He’d be even more of a laughing stock like the Bruce Brothers if he was a PLC.

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          2. Robert May

            With as much respect as I can muster  for Mr Quirk-  he has made himself deliberately vexatious and as a consequence, toxic and I can’t see how he can now lead anything, anywhere for anybody. If there is some form of acquisition or merger afoot common sense and the fear of constant retaliatory ridicule means a back office job is the best he could hope for. I’m fairly certain id and ego won’t allow that so I will reserve my respect  for when he finds a way of undoing all that he’s done and said and when none of that is retrieved from the archives of the internet which provide a full and detailed library of stuff that will be used against him.

            Mr Ellice was put in the same position by  over enthusiastic and under controlled marketing teams and now keeps a very much lower profile. Mr Quirk  once boasted how the marketing was all his doing so he doesn’t have the defence that  all the aggression and nastiness was down to someone else

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  2. Simon Bradbury

    What a well thought out and thoughtful  out piece!

    I’m always impressed when, with the benefit of real experience, an individual amends their viewpoint.

    Of course, no doubt this post will be criticised, but for the record…

    ”Much Respect” Mr Q!

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    1. AgentQ73

      The cynical amongst us may feel that Mr Q knew this all along but now needs a new pitch for his gravy train.

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    2. Robert May

      In my book respect is only due when the admission of failure is accompanied by an apology for the  real and genuine harm that’s been done to the standing of the industry and the decent people who have been on the receiving end of his antics
      The financial suffering and stress caused by investors, “staff, friends, family and even small children” subsidised fee erosion can’t be forgiven and certainly can’t be forgotton  by penning a few hundred words that allow him to change tack in an attempt to survive (sell or merge)

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    3. MarkRowe

      No respect due in my opinion, Simon.

      The amount of investment wasted and rubbish this guy has spewed to the public about traditional agency, he’s not shown an ounce of respect.

       

       

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    4. JVSOZ

      Simon,
      This is an advertorial for his new product. Sorry, but you’ve been duped mate.

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  3. smile please

    What a pointless piece.

    Basically RQ is saying the future is high street. And online is not wanted by the public or a sustainable business model, which we have been telling him for years.

    As for high st vs online let’s stop fighting….. high street did not start the fight. They are not spending multi million pounds running down only onliners. We just go about our job helping educate the public.

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    1. JVSOZ

      What he’s saying is:
      “I have a product I can sell to you High Street guys coming, so you can be online like me!”
      “Oh, and, er, um, er, and….. Plus I’m a really nice guy! So please don’t begrudge giving me a cut of all of your commissions.”

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  4. Hillofwad71

    “The credibility and trust that an established high street brand invokes with a semblance of a branch network to provide that visible comfort.”

    What the consumer  does expect is some transparency to gain trust.  When a property appears on the  portal as”just added” with a first listing date in October -it’s exactly that not a reintroduction of a property where a sale has  fallen through first listed in June

    https://www.rightmove.co.uk/property-for-sale/property-57103437.html

     

    https://www.zoopla.co.uk/for-sale/details/47923873?search_identifier=dafbcc4b80889fa3092b851c9e9882fb

     

    Consumers bombarded with a blizzard of   meaningless stats  based on survey in an effort to show who  is top dog

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    1. Robert May

      Don’t get me started on manipulated  portal statistics, it was Emoov’s antics that bejun the whole investigation into portaljuggling in 2015. Most of that has stopped but  anyone producing and statistic of performance really ought to be putting a litlle more effort into verifying the numbers supporting any sort of claim being made.
      One stats for hire firm is putting all of their credibility on the back of  statitics that have been manipulated up to  19 times. Whether the firm is blind to the manipulation or is turning a blind eye doesn’t matter they are supporting headlines and PR that simply does not stand scrutiny

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      1. Hillofwad71

        Robert
         
        Maybe  there is an innate fear of the  dreaded words”back on the market due to abortive negotiations” to be avoided at all costs  as it knocks out all the  blathered conversion  stats 

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  5. AgencyInsider

    Is that a massive towel I see being thrown into the ring?

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  6. htsnom79

    Mid eighties Del boy trotter

    ” cosmic ”

    2018 RQ ” chasmic ”

    And this time next year we’ll be millionaires.

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  7. AndyKEOGH

    Ive been saying this for the last 18 months High Street have a fasination with online and its not recepricated with Online, We don’t care about High Street we just go about what we feel we are doing that is better and leave the moaning to the High Street.

     

    Ive been lucky and have worked for both the big online agents and can honestly say it is better than the high street.

    Big corps have a valuer that goes out to a house ill prepared “shows up and throws up” leaves the fee that he knows they are going to get bashed on till last after he’s told the vendor how many people in his and his alone golden box are going to come to see the house then after they tell the vendor this year its either sell the house or go on a family Holliday for 4 the fees that big he goes back to the office hands it to a neg (with one or two years EA experience at best) and never speaks to them again. HOW CAN THAT BE BETTER THAN US AT ONLINE.

    With us the buck stops with us we look after the vendor and if the price is wrong we have to make the awkward call to reduce the property. We are there from start to finish. Seams better to me

     

    Just a foot note do the High Street not use rightmove? Can you please start valuing houses on a price band on rightmove its too easy to beat you when you go in after an agent has valued at a ,950 just shows you are in the dark ages and have no idea of the modern world.

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    1. Hillofwad71

      “With us the buck stops with us we look after the vendor and if the price is wrong we have to make the awkward call to reduce the property. We are there from start to finish. Seams better to me”
       
      It seems better  to me  that you got the price right in the first place for the vendor   especailly in a downward market and may have  missed the   boat  on a sale 
       
      Maybe expanding your valuation techniques beyond a cursory inpsection of RM price bands might help too!
       

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    2. ArthurHouse02

      I can only assume this is a piece of irony, or from someone having a laugh at their own expense. To clarify the situation for you darling, you are not an estate agent, and you work for a company who are not estate agents. You are merely a lister who convinces people to part with their money in the hope that their home will sell. If it doesnt, then its tough.

      On the moaning front, whilst you as an individual may not moan or grumble about estate agents, your “employers” certainly do and have spent hundreds of millions of ££££s doing so through TV campaigns etc.

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    3. Hillofwad71

      Maybe having 2 online jobs helps!
      https://www.linkedin.com/in/andrew-keogh-32a75146/?originalSubdomain=uk
       

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      1. AndyKEOGH

        I started at countrywide did 6 years there, 2 years at independent EA then had a high street agent for 7 years before selling up. Experience is key in this job just look around any high street branch they may have one experienced member of staff the rest will have just a few years at best. 
         

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        1. Hillofwad71

          Is your likedin profile up to date or have you got 2 jobs ?  

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          1. AndyKEOGH

            Should say left PB to go to Yopa 

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            1. smile please

              Sold up your agency and joined online agency?
              Something tells me you are not a very good agent. 

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        2. Ostrich17

          You still seem to be the sole director of Lettings & Sales Limited (appointed October 2010)?

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          1. AndyKEOGH

            Had some stuff needed to still go into the business it officiaccly closes on the 1st November this year. 

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    4. Jrsteeve

      And the troll of the day award goes to….

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    5. Property Paddy

      dear mr “AndyKEOGH ”  are you sure having worked for 2 on line agents wasn’t enough?
      They’ve only been around a couple of years and you’ve gone through 2 already !

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      1. AndyKEOGH

        Just left for a promotion, nothing against PB 

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        1. agent orange

          Hi Andy, in your post you say “he goes back to the office hands it to a neg (with one or two years EA experience at best) and never speaks to them again.”

          Can I ask – is this what you did when you had your own estate agency?

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          1. smile please

            It becomes clear why it closed.

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    6. PeeBee

      “…when you go in after an agent has valued at a ,950 just shows you are in the dark ages and have no idea of the modern world.”
       
      Okay, Mr Keogh – thanks for that insightful thought…
       
      …but while we’re at it bringing ourselves into the modern world, have a deeks at these pearlers courtesy of no other than your own most recent greener-looking pasture in which you have decided to jump wellies-first – YOPA: (in reverse price order)
       
      £34995 – zoopla.co.uk/for-sale/details/43233572
       
      £38,750 – zoopla.co.uk/for-sale/details/48455935
       
      £52,995 – zoopla.co.uk/for-sale/details/48887376
       
      £57,500 – zoopla.co.uk/for-sale/details/48585997
       
      £59,950 – zoopla.co.uk/for-sale/details/47233709
       
      I could go on – BUT THERE’S CHUFFING HUNDREDS.
       
      *Tip of the day*
       
      Sort your own 5H!T before telling others to sort theirs.
       
      In the modern world, that is…

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  8. JonnyBanana43

    You’ve changed your tune Quirkey.

    Think about all that drivel you fed people over the years…  now you’re saying you simply got it wrong!

    This has to be one of the worst written and least engaging pieces I’ve ever seen written on EYE – I can’t believe the editors give you a platform for this *****. 

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  9. henryjhrowe

    It is probable inevitable with the pressure of overheads and lower fees there will be less visual High Street Agents as there are less banks on our high street.

    A middle way is what will probable evolve with more area managers working out of a central high tech  visual hub office providing the support suggested in the article.

    It is vital that agents have the opportunity to come together to share experiences, receive training and inspire each other less offices but better offices?

     

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  10. Countrybumpkin

    An article I can relate to. Ha ha don’t be fooled my PIE friends. RQ will be writing this for one reason… His next business launch. Don’t be sucked in to criticise and just smile, like I am! Come on RQ show us your middle ground. Employing proper estate agents to work from home? Low overheads, self employed American system where you take the cream? Why don’t you shift your fees up and the middle ground is found. Then let the consumer decide where they feel most comfortable placing their business, on Amazon or with real tangible people who are really local experts. Good luck anyway as I for one am never adverse to competition of any kind.

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    1. JVSOZ

      Sounds like he wants to supply you with access to his internet platform so you can happily list your properties on there too.

      The hubris here, is mostly the idea of approaching his potential new customers in this way prior to launch.

      I am the great real estate oracle. I am Russell.

      Now, would you like to buy access to my platform?

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  11. smile please

    Can we also dispell the myth high street offices are expensive. The world does not start and finish in London. Not many of us are paying 2 million quid a year in renting an office on Park Lane!
    Most of us find very reasonable well located offices for circa £1000 per month. In fact one of mine is just £500 per month, hardly breaking the bank!!!

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  12. PeeBee

    The Quirkster’s first ‘olive branch’ was offered months ago…
     
    …when re UNBLOCKED me on Tw@tter!!
     
    This is simply round #2.  More to come.
     
    **EXCLUSIVE EYE PREDICTION**
     
    He’ll open eMoovs first Branch within a year.
     
    You read it here first, folks…

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  13. Room101

    RQ should not forget the bile he has spewed all over the shoes of those he now seeks to make friends with.

    Talking of regurgitation.  Here’s some chunks from yesterday in response to having seen this article elsewhere.

     
    Room101
    OCTOBER 10, 2018 AT 14:08#9
    A dig and a prod at PB and more surprisingly his seeming admission about their combined failed shenanigans.
    The article is just posturing by a bloke who regularly runs out of money, gets money, spends money, doesn’t make money and didn’t get traction with Countrywide.  But at least now has an article to link back to in the future so he can pretend everything was all his creative idea.  Pure fodder for his ego as the obvious will obviously happen, the inevitable will eventually happen and all regardless of what bloke thinks.

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    1. JVSOZ

      I’m amazed they’re giving him a platform to report on himself. Can any estate agent jump on here and publish their view of the world if they ask nicely?
      Certainly should be classed as an “Advertorial” if he has some tech up his sleeve he’s hoping to sell to high street agencies.
      Only thing is Russell, if Easy Property isn’t getting much traction with their B2B offering, why would EMoov? By default your model sticks it’s middle finger in the air to High Street agencies just like PB. So how many could you honestly expect do jump on board even if it’s good.

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  14. Shaun77

    A white flag, if ever there was one. A rather verbose one at that.

    I can smell the panic as he basically accepts the fact that they will never make any money.

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    1. JVSOZ

      I think that there’s some stuff coming out that cements your comment Shaun!

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  15. Leespoon

    And in my next prediction, I believe that Christmas this year will be cold….. fast forward to February… told you!

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  16. agency negotiation

    I know you’re not really surprised by this, but you and I, Russell, don’t have a lot in common. With very few exceptions, the message you’re sharing across multiple  social media channels and traditional media is fast becoming the exact opposite of something I want to listen to.

    This might have something to do with the fact that I find your rhetoric of constantly reframing important issues to your advantage,rather than those of the homeowner, incredibly boring.

    “Can I trust you to sell my home?” you infer is asked by a vendor.  And yet your firm gives very little reassurance on that score. A cursory glance at your current local experts profiles offers no clue, other than a few words about honesty and experience. Easy to say, harder to deliver.

    The middle ground and compromise has been the home of those lacking conviction throughout the ages. Neville Chamberlain, Vince Cable have found their kindred spirit.

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  17. Property Paddy

    I always thought a no sale no fee business model would be hard to thwart.

    Looks like the on line up front fee businesses are discovering this the hard way too.

    How are the PB shares doing today?

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  18. charlie.wright

    “The credibility and trust that an established high street brand invokes…” these are not words I expected to hear from RQ, but I’m delighted to. 

    The model Russell is proposing is exactly what Foxtons did 20 years ago. It centralised it’s sales progression and lettings management, along with its outbound calling marketing operation to its Chiswick Park call centre, and had branch staff doing all the face to face work with valuations, viewings and tying up deals. We know that it’s effective. But given 85% of the industry is small independents, that’s not a useful suggestion of how to move forwards for the industry as a whole. But if he’s pitching a Countrywide/Emoov merger that’s different.

    But on the costs argument, I disagree with Russell deeply. The smaller an agency, the fewer layers of expensive middle management are necessary, and no other cost line in an agency business adds less value to the end user consumer than area managers; expensive people who rarely if ever come into contact with the customer, but who suck large amounts of money out of the company. The bigger the company, the less value to the client, who only needs one local professional to help them get their move done.

    So I’m sorry RQ but the “unnecessary overheads” of high street agents argument doesn’t stack up either.

    Some of the high street offices I have been into are welcoming, friendly, reassuring environments for customers, who don’t want strangers in their home more than necessary, but do want somewhere to come and talk about their move.

    People are fed up to the back teeth with call centres, and large companies trying to do business over the phone to cut costs.

    Agency is the business of moving people  it’s an intensely personal business, and knowing there’s an office to go to if you’re fed up is better than trying to pin down your roving LPE.

    I don’t doubt Russell’s sincere commitment to improving estate agency service levels, but as I’ve said a thousand times, you can’t commoditise personal service. You can’t sell it online, or download it, or even get it over the phone. You need the reassurance of a local pro who looks you in the eye and says “I’m here for you and we’ll get it done”.

    Growth in online market share has flatlined despite £40m a year in advertising. People want to deal with people.

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  19. LordElpus56

    I’ve been saying all this for bloody ages. Estate agency is a LOCAL business and the best people to sell your property are people who work locally and have street-by-street knowledge of your local area. The average customer does not care how many offices you have or where they are, because an office of the same brand 100, 50 or even 10 miles away is not relevant to them. They care about your local one – or rather, they care whether the people in it can give them what they want.
     
    Another myth is that non-shop fronted offices save money. You still have to pay office overheads whether you have a window or not, unless you work from your kitchen table – and who wants that?
     
    Local agents need to be more tech savvy and allow communication from buyers and sellers pretty much any time, using the methods of today. People want to use the internet because it’s convenient, they don’t want to have to wait for someone to get back to them as to whether they can have an appointment or not, but at the same time, they want a relationship with someone who just gets it. Gets them, gets their property, gets their area and can empathise with their situation, their needs and their wants.
     
    This doesn’t have to be provided by multi million pound corporations – the tech is there for you, now. And contrary to agents dropping their pants on fees – use the tech, provide the service, get the reputation, and you’ll be able to move your fees UPWARDS

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  20. Property Pundit

    Purplebricks share price currently 200.40p. #justsaying

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    1. gardenflat

      Sub £2 🙂

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  21. AgentV

    I have news for RQ. The next generation of Estate Agency, which he eludes to, already exists, and has done for three years or more.

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    1. JVSOZ

      What are you referring to AgentV?

       

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      1. AgentV

        Contact me at in@agentv.co.uk

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  22. MichaelDay

    My observations on the overall agency market and RQ in recent article

    https://www.propertychronicle.com/broken-estate-agency-market/

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