That’s the current average time it takes from putting your home up for sale, until exchange of contracts.

This is made up of: 62 days to find buyer and agree price (IF you can find a buyer, which more than half of sellers can’t)
plus

154 further days to exchange contracts, IF you exchange contracts at all, which more than 1/3rd don’t when their sale falls through.

Things made worse by overvaluing:

1. Time to find a buyer (high asking prices are offputting)
2. Time to exchange (buyers getting cold feet when they realise they’ve overpaid)
3. Sales falling through: Lender’s down-valuing deals because the property was over-valued.

Nothing will improve until over-valuing stops.

Over-valuing won’t stop until the worst culprits are forcibly stropped (they force other agents to overvalue reluctantly).

There is no law against it. So they won’t stop.

Sellers need to understand that MOST agents will knowingly (even if reluctantly) overvalue their homes.

They need to understand that, at best, overvaluing by agents will delay their sale, and at worst it will result in them missing the market and not selling at all, while locked into an unfair contract.

Everyone needs to understand this.

Because overvaluing is killing the housing market, and affecting everyone’s chances of moving, buyers and sellers alike.

If you’re moving ‘up the ladder’, sliding house prices help you.

The zombie house-seller apocalypse is upon us.

And Rightmove (whose figures these are) think they’re helping by constantly reporting ‘record house prices’.

No one at Rightmove has any individual motivation to do anything about this. It’s an immensely profitable gravy boat, where no one will stand up for fear of rocking it.

But their ill-conceived ‘house price index’ is directly affecting the entire market, everyone’s moving chances, and good agents’ businesses.

On 27th June, at the BestAgent Day event I will be inviting the relatively new Rightmove CEO Johan Svanstrom, who is new to the property market, to discuss the possibility of reconsidering their monthly house price index format, with a view to coming up with something that actually helps movers and agents.

I don’t expect it will make any difference, because the US hedge funds who collectively own a controlling interest in Rightmove don’t care about the UK housing market, as long as they get their regular dividends and share buy-backs.

So they won’t allow RM to do anything differently. But there’s no harm in asking.

And when they don’t change, and BestAgent launches its new ‘exchange-price paid index’ which will make a mockery of their asking prices, they can’t say we didn’t warn them.

Everything rests on ending overvaluing.

Agents collectively possess the data to do this, today. BestAgent will enable this, and create an all-new, transparent, verifiable house price index which will render all the others meaningless, once and for all. And it won’t cost estate agents a penny to participate.

Yet collectively, they will be able to aim this new torpedo of transparency directly at Rightmove and all the worst overvaluing corporate agents, and finally put a stop to a disingenuous, borderline-fraudulent practice.

It’s just such a shame that none of the biggest companies in the property sector have any interest in transparency. Otherwise this would have happened years ago.

When the time comes, we will be asking for your help to spread the word. I hope you will. It will help everyone except those causing the problem.

The post Ending overvaluing is the only way the housing market improves. appeared first on BestAgent.

2022 was when the 14-year honeymoon of cheap mortgages, stamp duty holidays and desperate buyers allowing agents to “make hay while the sun shines” screeched its tyres and smashed into a brick wall. It’s over, for good.

2023 is going to be a starkly different world for the moving industry, which will benefit the prepared. 

I’m an optimist, but not to the extent that I ignore the oncoming storm and pretend it isn’t happening.

No. As an optimist I take the opposite view. Being prepared for a storm makes me more optimistic about my chances of survival.

Fireproof overalls

That’s the purpose of this post: to share with you, estate agents of the UK, all of the best tactics and strategies I’ve encountered in 24 years working alongside agents of all kinds. This isn’t advice. This is sharing the observations of which agents I’ve seen outperform their competitors in previous downturns. The 1990s, and particularly 2008.

Dealmakers

2023 belongs to agents who are the best dealmakers. The agents who focus intensely, aggressively even, on only allowing their time to be spent talking to customers with the strongest motivation to move, and ignoring all the tyre-kicking time-wasters with equal intensity.

Let them waste the time of other, less focused agents.

The mistake inexperienced agents will make

As the cake of transaction volumes shrinks, as it most certainly will, the least experienced agents will make the mistake of continuing to focus most on winning instructions. Huge mistake. This will speed up their downfall as they end up with a portfolio of unsellable stock, and no proceedable buyers in their applicant box.

In a falling market, the agent with the most registered, proceedable buyers will be the ones winning the realistically saleable instructions, and doing the deals. 

Don’t take it from me. Here’s an agent veteran of several downturns

I haven’t walked the walk. But John Durrant has. He cut his teeth in agency as a junior in the 1970s downturn. He then started his own award-winning agency in the depths of the 90s downturn. So 2008 was a picnic for him. In this article he gives an in depth perspective of what agents need to understand to make the most of a falling market. Priceless advice from the horses mouth. 

Read his article here: https://bestagent.co.uk/john-durrant-advice-for-estate-agents-property-market-downturn/

Here’s a 5 minute video of the 5 tips I’ve picked up from the best agents 

Everything here is doable, if you decide to do it.

The golden survival rule if you are an agent who hasn’t been through a downturn before is to find a local mentor. It must be another agent who has been around long enough to share their direct experience of what a downturn is like in your local market. You won’t find better or more relevant advice for you and your agency than that.

Everything in John’s article and my 5 tips video is entirely within the reach of any agent who decides to do it. 

So, I hope you’ve found this useful and helpful, and that it helps give you a little more confidence to face the difficult market that 2023 will bring. 

So, here’s wishing you all the best for 2023 and remember, figure out what you need to change, and just do it!

Find me on LinkedIn if you have questions or would like any help. Best wishes Charlie Lamdin. 

The post Estate Agency Survival Tactics for 2023 appeared first on BestAgent.

This morning, sitting down at my desk, I noticed something new, and really weird.

While news headlines report house price falls, buyers withdrawing due to spiking mortgage rates and a general armageddon-style outlook for home movers, I spotted something I hadn’t seen before, in all my 24 years in property.

Looking at the BestAgent data, I could see properties coming back on to the market in unusually large numbers (no surprise given the news), having had a deal fall through, for whatever reason, but something was different. Usually, when a property is re-listed, it’s either at the same price as before, or, for obvious reasons, a reduced price.

Today, a noticeable number of these fall-throughs were being re-listed with their asking prices now 5-10% higher than before!

What? Sorry, what?

“What’s going on?” I consulted a few of my agent contacts.

“It’s so that they can offset the effects of all the down valuations and below-asking price offers they’re expecting now.”

In 24 years working in this industry, this is a new one to me.

It’s not because they don’t think prices are falling. They know prices are falling. They think that just by raising the asking price, they’re still going to get the price they actually want.

The madness of movers.

This got me thinking about how often I hear extraordinary stories surrounding individual properties, and how they’re always, invariably, unique.

The BestAgent algorithm runs 24/7/365, it never sleeps, always open for business. It constantly scans for all available properties For Sale and To Let, currently across England and Wales, (eventually it’ll do the whole of the UK).

It’s been running for a few years in preparation for coming to market, and we’ve been trying to make sense of the monolithic mess of online property data.

Early on in the build process, I asked the development team (crazy, brilliant geniuses), to create some kind of dashboard where I could see it working. (Although I’m the software architect of the entire BestAgent “Universe” as we call it, I couldn’t write a line of code if my life depended on it.)

The next day I had a screen that looked like something out of The Matrix, or Minority Report, with a never ending scroll of facts, figures, data and statuses that move too fast to read, unsurprising given it runs checks on about one million properties per day.

The property data set is almost useless. But after years of watching it, I’ve learned to understand it, and notice changes. It’s why I saw this house price fall coming back in February.

Fake listings.

It’s so full of fake, duplicated, out-of-date property listings, not to mention the listings that aren’t even homes (garages, land, shops, mobile holiday homes). We estimate that around one-third of all property being advertised has no right being there at all.

This is no surprise. Agents have been “gaming” the system to look bigger and busier than they are, and to attract mover leads on fake properties, to then try and show them their other properties.

But the problem is, it makes the property price data releases from the big well known property websites, almost useless.

One of our Supplier Partners from the house data sector once told me over a few beers that the bar of national property market data is “unbelievably low”, even from the respected indices. When he saw BestAgent and how we’d built it, he said “you’re going to be able to raise the bar easily with this.”

I wish!

We’re interested in homes, not investments, land, off plan etc, just homes. We try to strip out all the property listings that aren’t homes, available to view now, for qualified movers.

The data quality is so bad.

Then I had a thought: every single property listing, real or fake, is unique. Each one is some sort of exception. They are all an exception, in some way shape or form. And everyone is trying to get one over, be one step ahead, pull a fast one, to get the deal they want. Buyers, sellers, landlords, tenants and agents alike.

Homes aren’t in fact a commodity. They’re all unique, even in a street of identical terraced houses.

And this is one of the factors that makes interpreting property market price data so difficult, such an art form, so frustrating, so unreliable.

It’s one of the reasons why Automated Instant Valuation tools are completely useless. Totally, completely useless.

Even a seller’s reasons for moving are a factor in a property’s likely sale price – how can the algorithms price that in?

They can’t.

One million anecdotes.

And this is what makes the residential property market so completely, maddeningly, beautifully, different from any other market in the world. It’s why no one understands estate agents, and why estate agents behave so weirdly.

24 years in studying the whirlwind of emotional, irrational behaviour in this industry, and it still surprises me.

A million anecdotes. It’s the best summary of property market price data I’ve ever heard.

The post House Price Statistics – One Million Anecdotes appeared first on BestAgent.

I suggest you read about Anthony Barber, Chancellor from 1970: https://en.wikipedia.org/wiki/Anthony_Barber (especially the section headed, Chancellor of the Exchequer).

Compare the [1970s] boom that he created with the false market that Rishi created by his well-meant but totally mad Stamp Duty Holiday idea.

Broadly speaking, at its most basic definition and within normal margins, stock always remains relatively constant, and demand always remains relatively steady too. Stock supply is boosted to a small degree annually by building new homes. Demand remains relatively level but varies a little according to earlier years’ birth rates, deaths, immigration, emigration, and so on.

You’re thinking that we’ve just experienced shortage in supply of homes for sale and a massive increase in demand. But what you in fact witnessed was the result of human behaviour coupled with a set or cyclical economic (what goes around comes around) circumstances that helped to drive that.

So, if supply and demand did not change then what did change was Effective Demand and let’s call it Effective Supply.

Effective Supply

Effective Supply reduces when economic conditions cause vendors to think that they won’t put their own home onto the market because:

• ‘there are no homes available’ for them to buy (how often do we hear that as agents?). Fear of being left homeless. And
• when they think that they’ll get a better price by waiting. Greed.

What caused the decrease in Effective Supply?

Rishi’s Stamp Duty wheeze was, in my view, well-meant but it was always destined to cause issues down the line. It brought forward the life plans of thousands of people – people who had planned to move several months later but who saw the opportunity not to pay Stamp Duty just by bringing their plans forward.

Suddenly, this meant that houses that would have come onto the market at a later time, had already been sold and, this in turn created an ongoing vacuum – in other words, Rishi’s Stamp Duty policy resulted in a very low effective supply of homes being offered for sale.

People who wanted to move after the vacuum was created found, (as above) that because of the vacuum a) there was very little choice for them to buy and b) prices were rising. Those people, not unreasonably, chose not to put their own homes onto the market and so the vacuum became self-sustaining and to a certain extent it still is. It will likely remain so until the penny drops that supply is increasing and prices are easing. That will encourage more vendors and then there will come a tipping point. That will be the ‘oh my God’ moment that we all should be preparing for.

The shortage in supply was an illusion. The homes had not suddenly evaporated, people just weren’t putting them onto the market – buyers panicked – the false market was created.

What I didn’t know until February was that there would be a war in Ukraine that would exaggerate what would happen next and bring it to a head in much the same way that the Yom Kippur War did in 1973. The property version of a perfect storm.

Here’s a report from 2007 that refers to 1973 and the devastating effect that the Yom Kippur war had on our property market back then. https://www.theguardian.com/business/2007/sep/14/money.northernrock3 It’s worth registering (free) with The Guardian just to read it. Note the similarities between then and now. House price inflation (artificially created), war, energy shortages and so on.

My personal experience was that over a period of 15 – 24 months we went from 400 listings to 6, then came the war and we ended up at 600! Mostly these were overpriced homes because the market tipped and this created a rapid increase in effective supply. Eventually, we were ordered to dis-instruct ourselves from many of them where vendors were unwilling to adjust their prices to suit the sliding market. Over time, this action helped to steady the market. Tough love caused vendors to realise that we weren’t being difficult – we were simply reflecting the reality of the new market order. This had the effect of eventually reducing effective supply and over time the ship came back to an even keel.

In retrospect it would have been better to have known what the market was going to do and to not have spent money on marketing those homes that had too high expectations of their selling price.

When the market slides, the best any agent can advise is to adjust the price quickly. In a few weeks, clients can find they’ve lost another 5% or whatever. You won’t be doing them any favours by telling them to wait. It will be some time before the market finds its equilibrium. Chasing a sliding market down is not the fun it sounds like you’d have at the fairground.

When to do this is the BIG question. Personally, I’d have been preparing my vendors months ago, hoping for the best but preparing for the worst. Keep an eye on the media.

Here’s one headline from the Telegraph a couple of days ago: “A ‘tsunami of repossessions’ will hit house prices” and put yourself into the shoes of buyers reading it. What you will find is that many vendors will think that their properties won’t be affected! But take my word for it, they’ll be happy to apply the logic to the ones they’re hoping to buy. Don’t be surprised when that happens.

Effective Demand

As above, demand always remains relatively constant at the most basic definition of what it means. That’s because everyone needs to live somewhere. The population doesn’t vary much. The need to move does.

What changes is financial ability and buyers’ perception of what’s happening in the property market.

Effective Demand increases with the availability of affordable money and when buyers can see that the market is moving up – nobody wants to miss the first rung of the ladder.

The issue currently is that if we assume everyone throws the kitchen sink into raising as much as they can to buy their home, when something happens to add £400 a month to the household budget, they will have to cut their cloth somewhere. The choices are stark, afford to eat, heat, and pay your mortgage but effectively do it with £400 a month less than you thought you had.

With household budgets up £400 a month (energy and food) there will be less money available to fund mortgages. At 3.5% over 25 years, that £400 a month would have funded £80,000 and over 35 years that would have been £98,000. If they choose to eat and heat, they’ll have up to £100,000 less than they would have had available to make their purchase! Many will compromise in the and eat a diet of handouts from parents and turn their heat down to 19 degrees. Many more will choose not to move away from parents I the first place. A property market without FTBs is not viable.

IF/WHEN the tipping point is reached, expect lenders to become nervous too. They’ll be looking at affordability and even if buyers decide to go on a no-food diet and freeze to death it’s unlikely that the lenders will accommodate their wishes to buy a home at current price levels. Demand is only effective when there is money available. If interest rates increase, then affordability will fall further. Lenders are likely to become a problem – although the rate of mortgage lending hasn’t been high of recent so they might be slow to respond.

The trick will be for agents to see the writing on the wall. Keep your eyes open and your wits about you. Don’t take houses onto your books and spend your money on marketing them if you think that the price is too high for today’s market, but it MIGHT sell at an inflated price next month. Pricing in house price inflation will lead to you wasting your money and you may be better off putting it on an outsider at William Hill.

Remember that if you keep light on your feet you can get through what is likely to come. Data will be the secret weapon that we didn’t have back in 1973. Neither then did we have anything like the experience of anything similar happening 50 years earlier. It was the first time any of us had experienced anything like it.

The temptation will be to draw your horns in and forget that your primary job is to market and sell property. But the best way to attract the best buyers will be by having the best houses to sell on your books. This means that you MUST keep doing what you do but don’t try to be a vendor-pleaser by overpricing their property. If you lose instructions, you’ll very likely get them back several weeks later.

Make sure that you make a big thing about not tying vendors into long-term sole agency agreements. Point out that many agents will try to tie them up in this way to set a high initial asking price and then chip away at it. Vendors won’t like that, but they won’t be able to sack them unless they’re taking the house off the market altogether.

To my mind, the most professional agents, those with heart, courage, experience and sharp wits will come out of this stronger than they went in.

All of the above is my personal opinion and is based on my personal experiences of fluctuating property markets over the years.

If anyone wants to chat, they can email me at jndurrant@gmail.com with some times for me to call, and a phone number. Good luck everyone.

ENDS.

Watch a conversation on this topic between John Durrant and BestAgent founder Charlie Lamdin here: https://youtu.be/ChEv_5qU0kY

The post Veteran, retired agent John Durrant’s priceless advice for estate agents navigating a property market downturn appeared first on BestAgent.

Charlie Lamdin, BestAgent’s founder, has been studying the property industry from the inside since 1998. He knows more about estate agency than anyone else who’s never been an agent. (Challengers welcome.)

The question he’s trying to answer is: if agents and movers interests are aligned (a move needs to happen before anyone gets what they want) then why is it such a godforsaken shit-fight for both sides?

After more than 20 years, he’s reached a surprisingly precise conclusion:

Lead Gen is bad for estate agency and makes movers choose bad agents.

Clueless PropTech

Driven by a lack of understanding of how the property industry operates, countless new entrants have been flooding into the so-called “proptech” space with Lead Gen solutions for over 20 years now, and yet the measurable results for movers have got steadily worse. 

Transaction times are at their longest ever. 

Success ratios (the ratio of properties listed to properties sold) are below 50% (outside covid times).

More and more people are making the wrong choice of agent, a problem is made much worse by “lead-gen”. This is disastrous for everyone, because good estate agency is a complex, difficult, nuanced job at the best of times, and is beyond the competence of many agents when things get tough. So choosing the wrong agent because of their lead-gen spells disaster for movers, and lost instructions for the agents.

But why?

Any agent can buy Sparkly Gimmicks, and bad agents rely on them.

Because any agent, even the worst agents, can buy these glossy, sparkly, lead-gen gimmicks, such as “automatic instant valuation” tools (which do nothing of the sort), market data reports, ghost-written articles to show what an expert the agent is (even though they didn’t write it themselves).

So any amateur, money-grabbing con artist can arm themselves with these gimmicks, and a portal subscription, and make themselves look like a credible option for home owners. “Hi, I’m on [a portal], look at my cool market reports, look at my website. Read my blog I’m a guru.” Literally any agent can now buy what they need to say this.

The game has become: “S/he who spends the most on lead gen gets the most leads”. Great for lead-gen businesses, terrible for agents and movers.

Two-tier industry, cornered market.

BestAgent has constantly updating data on all the publicly available properties for sale and to let from all estate agents throughout the country. It shows something remarkable: Just 10% of agents are listing fully 50% of all properties on the market, nationwide. 

Do the maths, and you’ll see that this leaves the other 90% of agents to scrap over the other half of the market, getting on average one-tenth the number of listings of the top 10%. 

With some important exceptions, many of the “top 10%” are merely spending the most on marketing and lead-gen, snatching new leads before other agents can get to them. They are by no means necessarily in the top 10% in terms of results for clients.

With most sellers following the terrible advice to “just pick 3 agents”, most of the time the 3 agents that get picked are the ones spending most on their marketing.

But there’s zero correlation between marketing spend (or market share) and the results those agents are achieving for those clients. 

Awards and market share means nothing to sellers

Charlie has had first hand experience of agents who have won national awards actually selling less than half of their clients properties. Many of them are also members of industry trade bodies. But again this means nothing in terms of what results a home seller can expect.

While there are many complex reasons driving the behaviour of home sellers and agents in the market place, almost anywhere you look, you will find evidence of lead-gen company interests being the predominant factor in most scenarios. 

Lambs to the slaughter

This is bad for both agents and movers. 

90% of agents feel they are forced to spend money on various lead-gen marketing options. But they will not get the same return on investment as the top-10 companies who are carpet bombing their patch with marketing gimmicks.  These agents are losing out on business they deserve to win, for no reason other than they have no visibility by comparison to the carpet bombers.

For movers, most of whom have absolutely no idea how to go about choosing an agent, this means they are lambs to the slaughter of carpet-bombing marketing and lead-gen tactics. They will be sucked into corporate marketing funnels and processed into a signed-contract lock in before they can say “what’s my home worth?”.

Worst of all – no one has done anything about it, until now.

The conclusion to all this is that all the current players, large and small, are crying out about industry problems, while continuing without doing anything about it.

Many good people in property are trying to make a difference through their own businesses. But this is a hiding to nothing as they will, at best, only make a difference to their own clients, but have no impact beyond that.

All efforts to change things have failed. But BestAgent has a plan for a fairer future.

The only way to change an industry is to start a business that offers an entirely different and 100% impartial way for movers and agents to interact.

It boils down to this one thing: If profit is the primary motive, it’s most profitable to play by the current rules and change nothing. 

But, if change is the primary motive, then everything must be different, starting with the absolute removal of any influence that will place profit above change.

This is why Charlie has chosen to refuse all offers of investment into BestAgent, and has ended all commercial partnerships.

It’s why BestAgent is 100% impartial. It doesn’t sell data to anyone. It transparently charges all agents the same for any leads they buy, regardless of the size of agency, refusing corporate discounts, or any brand comparisons. 

It’s why BestAgent is moving the focus away from agency brands onto the individual people who will be delivering service. 

The conclusion is this: there is no reliable formula for finding the best agent for any particular property or client. It’s a totally personal and bespoke choice every time. 

But if a seller wants to be sure of a sale and that they are getting the absolute best price for their property, there’s no getting around the fact that they must leave no stone unturned in the hunt for that agent. And that’s where BestAgent comes in. 

A fairer future for agents, a better offering for movers. 

Only by eliminating all unfair advantage, all corporate influence, all shiny gimmicks, is it possible to create an industry where both movers and agents get what’s best: the best match between agent and client that will lead to faster transactions, lower fall throughs, higher fees, and a better quality of life all round. 

Every last element of the way BestAgent operates has been designed to prevent gaming by unscrupulous agents, to make it easier for movers to find the good people, wherever they may work, and for an end to the two-tier industry that currently benefits the few at the expense of the many.

Video: Watch Charlie explain why most agents underestimate the importance of what they do https://youtu.be/26WLhfoyG94

The post ‘Lead Gen’ means movers choosing bad agents. appeared first on BestAgent.

Today Rightmove has emailed its customers, apologised for how badly it misjudged things and has put in place a blanket discount of 75% for 4 months starting in April, no strings attached.

On the face of it, this looks like a sincere acknowledgment of how badly they got it wrong.

If you stay, they will hurt you again.

But don’t be fooled.

This is the behaviour of an abusive partner, who after years of abuse has pushed it too far, now fears the relationship will end, and is begging you to come back with a short term offer.

In their email, they say that this measure will cost them between £65m and £75m. That sounds like a lot, but is one-third of one year’s profits really going to hurt them if they keep all their customers?

Countless reports from agents speak of being unable to contact a rep, being told to “Pay, downgrade or leave”, and absolutely no concession being given to anyone except their largest corporate customers.

While some agents say they find Rightmove good value for money, most average agents find their relentless price increases (with no associated increase in value) deeply unfair and unsustainable.

If this is a relationship you don’t feel happy in, now is the best chance you have ever had, and likely ever will, to get out.

Zoopla smells Rightmove blood and moves in for the kill.

This morning Zoopla has announced very aggressive discounts and free periods in return for an 18 month commitment. They are offering 3 months free, or 9 months free followed by 9 months at full price, IF YOU LEAVE RIGHTMOVE.

This is aggressive competition. Given the short term survival challenges, Zoopla is rising to the occasion and offering agents a genuine pathway through the uncertainty of the rest of this year, but only if you leave Rightmove.

Opportunity sometimes knocks very softly.

For agents who dislike Rightmove, Zoopla’s offer seems like a no brainer. At the very least, this could knock RM off the top spot if Zoopla manages to achieve larger numbers of listings. But is there a risk? The risk is that by committing to come off RM, you may not be able to get back on to it for 18 months. If you’re worried about that, you can take Zoopla’s 3 month free offer without having to leave RM. But in my mind, the risk of being stuck on RM is a much bigger one.

If you feel abused by Rightmove, I would walk away. Ignore their 75% discount offer, generous though it seems. It is the desperate plea of an abusive partner who will say anything to get you to stay, so they can carry on abusing you as normal after a few months.

Getting out of an abusive relationship is frightening and difficult.

The use of the term ‘abusive relationship’ is no metaphor or joke. It is how many agents genuinely feel, and it is their livelihood at stake. What could be more upsetting or emotional than that, in your working life at least?

Everyone knows of someone who has been through this. In your personal life it is horrific, but not unexpected. Agents should be able to sign up to a supplier without fear of being trapped at the expense of their business and livelihood.

The image used for this post was taken from a blog about how to leave an abusive partner. If it is of any help, it can be found here: https://psychcentral.com/blog/the-one-word-i-used-to-end-my-abusive-relationship/

The post Rightmove is the abusive partner you’re scared to leave. Don’t fall for the short term charm. Get out now, or the abuse will continue. appeared first on BestAgent.

Today, Rightmove made the biggest mistake of its existence, and probably marked the beginning of the end of the portal era.

In response to the Coronavirus pandemic, and in what will be seen as one of the clumsiest, most thoughtless and insulting moves ever made by any company in the property industry, Rightmove today emailed it’s customers (with fewer than 25 branches) offering a frankly pathetic gesture of partial deferral of subscription fees for 3 or 6 months. Any deferrals are to be repaid in full in the following 3 to 6 months, probably in the hope of getting some good trade PR for once.

Let them eat cake.

Instead, this “let them eat cake” moment at best shows Rightmove’s lack of understanding of the reality of the vast majority of their client base, and at worst displays the true contempt for their customers that becomes necessary when you want to sleep at night, having made around 70% net profit off the proceeds of the work of your customers.

This gesture assumes that, immediately after a 3-6 month deferral period, agents will be in a position to resume paying the full price PLUS begin repaying the deferred amount. In other words RM thinks that agents pipelines are going to be flowing with cash by August. For that to happen, agents would need to be tying up deals now.

It’s plain to see that deal flow for agents is about to stagnate almost completely in the coming 2-4 months at least. The world is facing a watershed moment, after which life is unlikely to be the same again. By August, many agents will be having to shut up shop completely, through no fault of their own, due to the impact the virus is going to have on society.

Slap in the face for agents.

The message from Rightmove is “we’re rich enough not to care about this situation”. It is a huge slap in the face for its customers.

Anyone making 70% profit from an outdated business model simply by virtue of holding an effective monopoly that is bleeding its customers out of business, needs to have a word with themselves.

By contrast, Roman Abramovitch has offered to pay for the hotel accommodation of nurses and doctors in London in response to the virus.

Rightmove has offered a short term interest free loan, to the customers who are the source of its massive profits. It’s truly insulting.

The beginning of the end for portals.

This is the beginning of the end of Rightmove’s extraordinary winning streak. It has been the winner, but agents have been the losers. The comment threads in today’s stories on Estate Agent Today and Property Industry Eye are overflowing with furious agents, many saying that this is the last straw and they have handed in their notice to leave today.

The thing is, it highlights another, wider problem. The charging structure of all portals. Fixed monthly subscriptions for agent offices, when agents can range from having a handful of properties to a few hundred, simply isn’t fair. It’s almost as if the portals are in denial about how internet based businesses in the rest of the world charge-on-a-pay-as-you-go, pay-only-for-what-you-use, priced-according-to-value basis.

There has also been a trend of increasing overall numbers of leads from portals, while underlying transaction volumes fall, making the value proposition from portals weaker and weaker.

OnTheMarket was always doomed from the outset, because it was the brainchild of Knight Frank, Savills and Douglas and Gordon who just wanted a share of the portal profits for themselves. They adopted out of date tech and even more out of date protectionist strategies that were never going to win agents over.

The beginning of the end of the portal era is here. They will be around for a few years yet, but their strength will wane.

https://propertyindustryeye.com/eye-newsflash-rightmove-announces-deferred-payment-scheme-during-crisis/

https://www.estateagenttoday.co.uk/breaking-news/2020/3/rightmove-introducing-deferred-payment-scheme

https://www.independent.co.uk/sport/football/premier-league/coronavirus-uk-update-chelsea-hotel-nhs-staff-roman-abramovich-cases-a9408666.html

The post Rightmove signs its own death warrant and reveals its true contempt for agents. appeared first on BestAgent.

A seller choosing the right agent first time. Which is why more than half of UK home sellers have to change agents before they actually sell.

The “how to choose an estate agent” advice on offer from all the UK sites we found is frankly useless and, worse still, patronising.

Useless UK advice on choosing an agent in summary

Their vanilla advice can all be summed up in three phrases:

1. “Ask for recommendations”. Wow, gold dust.
2. “Pick three agents to invite in to value your home”. Yes ok, but which three? And why three? Why not 2 or 4 or 5?
3. “Don’t choose on valuation alone.” Genius.

If there are 15 agents to choose from, how is a first time seller supposed to have a clue which three to choose? The one with the most boards isn’t necessarily the one who will sell your home. Neither is the one your friend recommends because their friend works there. Even the ones with great reviews may not sell your home first time, and we all know that agents with the shiniest marketing can sometimes be hiding the most weaknesses.

With such literally useless advice on offer from consumer sites, is it any wonder that so many vendors choose the wrong agent first time and have to change?

American advice on choosing an estate agent is how we should be advising home sellers.

Digging deeper, the following article appeared on Forbes, the US business magazine website, and it’s the best impartial advice I have seen yet on how to choose an agent. It’s insightful, it is full of unexpectedly valuable tips. It speaks to the nuances of agency, and highlights the importance of intangible factors. It really is a superb list of tips, without a single useless cliché.

Why do we in the UK get this so wrong?

Below is the Forbes article. Read and enjoy, and hopefully be inspired.

https://www.forbes.com/sites/forbesrealestatecouncil/2018/03/22/14-tips-for-choosing-the-right-real-estate-agent-for-your-property-search-or-sale

The post Excellent advice on how to choose an agent in America shows up useless, patronising UK advice. appeared first on BestAgent.

Download and print here

I have often wondered why some of the most clever, successful and intelligent people I know seem to turn into idiots when it comes to understanding what Estate and Lettings agents do.

“They just chuck it on Rightmove and open the door for viewings.”

This popular misconception is the only reason that online agents ever stood a chance of winning any business. But 95% of sellers don’t think this. They prefer to choose an agent who is available when needed, actually knows their local market, and doesn’t get paid a penny unless the property sells or lets.

So, in the end, according to reports in the media, only 5% of sellers choose the pay-anyway option. I heard a friend refer to online-agents as a “stupidity tax”.

But even those who instruct full service, no-sale no-fee agents don’t understand the true value they get.

When asked in person, even the best agents struggle to accurately describe what it is they do. You never get the same answer twice.

Why?

Little else is as complicated as residential agency.

Why do people who spend their entire career in the same profession find it so difficult to describe it in a way that people can actually understand?

Here’s the answer:

It is by far the most complicated process of any consumer-facing business, service or industry. By miles.

It is at least 32 steps, each of which requires skill, experience, knowledge and wisdom. Because if you get one wrong, the opportunity to tie up a deal and make a move happen disappears in a puff of smoke, along with the chance of any fee or commission.

Thirty-two steps! Some of which need repeating many times.

But that’s not all. You can then add in the following uncertainties, which no other industries have to deal with:

1. Irrational behaviour by customers, beyond the control of the agent.
2. The requirement to interact with multiple other parties, just for one transaction, any of which has the power to destroy a deal.
3. Impossible customer expectations.
4. Shockingly bad treatment of agents by movers.

Here’s what agents really do.

So, you could describe what agents do as follows:

“Whilst being perpetually mocked, abused, distrusted and criticised by the public and the media, agents attempt to complete some 32 different processes, some involving legal requirements, many involving knowledge of legislation, regulation and contracts, in the right sequence, on time, each of which requires skill, knowledge, judgment and an ability to deal with multiple irrational people, whilst other parties try to undo these processes, all for the chance of maybe being paid at the end of the process, IF no one changes their mind, lies about their situation or intentions, or attempts not to pay a fee that was due. Oh, and the owners of these businesses are paying out their overheads at all times, whether a fee results or not.”

You can also add in the fact that around 50% of all calls received by agents are from suppliers constantly trying to sell them “unique solutions” to problems, many of which the agent didn’t even know they had. Which brings me to the point of this article:

Estate and lettings agency is such a complicated process that unless you have a basic understanding of what’s involved, you are likely to choose the wrong agent to sell or let your home. Suppliers without a basic understanding will pitch a product or service that they think will revolutionise an agents business, but it won’t. It may well be a great product or service which might make a big difference, and maybe even transform aspects of their business. But you will have a better chance of being taken seriously by a prospective agency customer if you can demonstrate a better understanding of what they do, and how your product fits into the bigger picture.

Agents are tired of being told what they’re doing wrong, by people who aren’t agents.

BestAgent’s view is that agents are among the most misunderstood, unsung heroes of any industry. Everyone is always lecturing agents about what they are doing wrong, why they aren’t doing better and what they need to do to thrive. Yet despite this wealth of expertise, agency remains as difficult a business to run as it has ever been. Agents are tired of being told that if they buy something else, it will solve all their problems.

Our view is this:

Every single agency is unique. It’s a unique combination of the character of its owner, its manager, its staff, its location, its customers, its instructions and its reputation.

Therefore no one is qualified to tell an agent how to run their business, no matter how successful they have been.

Our view is that the best way to make a difference to the industry is to make it easier for each and every agent to operate exactly how they think it best for them, without judgement.

One of the (many) challenges facing agents is how to choose the right selection of suppliers for their unique agency business, and that’s where we hope to help.

We have come up with a diagram in the hope that it will help Clients and Suppliers of agents to better understand what they do, and the context of how a supplier product might fit into their business.

A diagram for any agent to use, to show what they do.

This diagram is intended to disarm a seller or landlord who thinks that agents just “chuck it on Rightmove”, and make it easier for agents to explain and justify (not defend) their chosen fee.

It’s intended for an agent to show to a possible supplier and say “this is where your product might fit into the overall process”, in such a way that the supplier can better appreciate the context of how their product might (or might not) help.

Finally, it’s intended for Suppliers to look at and consider how best to position their product offering to agents in a way that demonstrates respect and understanding of what agents do.

We have broken these 32 steps down into three main sections, Listing a property, Finding the right Mover, and Completing the Deal.

Please feel free to use this diagram if you think it may help your customers understand better the extraordinary service you perform for them.

Download and print here

The post The truth about why nobody understands what estate agents really do appeared first on BestAgent.