The last few years have been a roller coaster for the Estate Agency industry. It’s not house prices per se that effect an Estate Agent’s bottom line, it’s transaction levels and those have gone through the floor. Coupled with that has been the rise in technology as a marketing tool and an explosion in geeky competition and low cost rivals to the traditional Estate Agents model. The death of the High Street Estate Agent has gleefully been on everyone’s lips.
Let’s take a look at all of the things which have ‘signalled the death knell’ in the past few years.
Google maps enters property search.
‘It’s the death of anyone who doesn’t sign up’
They gave it eight months and threw in the towel. Rumour has it that the data being submitted was simply too erroneous, nay, inaccurate for Google’s reputation to risk hosting. Some may even say the adage often attributed to free databases is prescient.. ‘sh*t in sh*t out’. The fact they couldn’t work out how to make money out of it was the key factor I suspect.
Self sale sites such as Tepilo.
‘revolutionises selling your property, with an easy to use consumer site’.
With the greatest respect to Sarah Beeny and others, this has been a damp squib. Although certainly not helped by a very nervous housing market erring towards a more certain selling solution.
Tesco’s and Spicer Haart’s fixed price agency.
It has spawned many a witticism including ‘buy one get one free’ but that seems about all and it seems to have bogof’d itself now. Along with many similar.
So why are all these new competitors not really denting Rupert and Darren on the High Street, when it makes perfect sense to sell your house for free on Sarah Beenys site or pay £1000 to one of the new guys?
The dire state of the market is one reason. Vendors coming to market are generally doing so because they need to. They don’t want to mess around with creative models they want the property sold. Note the rise in popularity of auctions as another example of this.
The main reason however is that Vendors seem to recognise, particularly in difficult times, that there is more to selling a house than whacking pictures and floorplans on the worldwideweb. Getting a viewer through the door is relatively easy, getting that house to exchange is not.
There really is a chasm between what is marketing a property and the actual selling of it.
I am by no means in the thrall of Estate Agents nor am I a Luddite and when I talk of High Street Estate Agents, I of course mean good ones, which is a whole different blog. The fact is that buying and selling in the UK (excluding Scotland) is a flaming nightmare.
Truth is, that when I buy and when I sell I want to use a good traditional, knows his stuff Estate Agent. I and every buyer I know does not want to be escorted around a home by the Vendor extolling the virtues of his hot tub. And as a seller I don’t want to see people traipsing through my house inspecting my cupboards.
I don’t want to have to negotiate with the Vendor on his main asset, it gets emotional. And as a Vendor I know it’s a darn sight easier for the Estate Agent to say ‘I have loads of interest’ and get the best price, than me trying it on with a sheepish expression.
But that’s the easy bit.
The tricky stuff comes when the mortgage companies, surveyors and solicitors get involved. These days their role can most often be described as ‘problem finders’. Someone in this sticky mix has to be the ‘problem solver’ and that is the Estate Agent ( and buyers representatives when used).
What happens when the mortgage company insists on a piece of paper from 1977 which doesn’t exist and they won’t accept an indemnity policy?
When the survey says there is a 20k damp problem and buyer and seller are diametrically opposed.
When the chain starts to break at the bottom, who is trying to put it back together?
Vendors threatening to pull out if we don’t exchange tomorrow and mortgage funds aren’t ready.
Just some real examples of deals of mine in the past 12 months where without the Estate Agent sweating bricks, and managing the issues delicately, the deal would have died.
Before everyone starts throwing their toys out of the pram, I know there are exceptions and I know a bad Estate Agent is worse than dry rot. I also don’t think they have to be on the High Street, there are some excellent ones based in local trading estates. But the key is that they need to be on the ground, know the property business and manage the sale like a hawk. When they do, the process of buying and selling generally works.
It costs money to manage a 3 months sales progression professionally. I don’t see how a fixed £1000 or £2000 fee can cover a business to do this properly.
Until we have a conveyancing process whereby all issues have been ironed out before the offer and it really is a simple transaction, it is a people and relationship driven process. And when you have people you also have the words emotional, irrational, selfish, greedy and many others. These things have to be managed by people who know what they’re doing and quite simply, you get what you pay for.
The failure of more creative models to break the mould seems to say clearly that Vendors think the same way.
The death of the High Street Estate Agent has been rather exaggerated…