Photo of Ian Preston By Ian Preston

The End of the High Street Agent

Posted 25/07/2013

“I don’t have a crystal ball” was the reply from one of my managers, when I asked him to predict which sales would exchange contracts in the following month.

It’s a key part of our business being able to predict the future, questions like:

“How much will I sell my home for?”

“How long will it take to sell?”

“Now I’ve accepted an offer, when will I be moving? – I need to book some time off work”

If only we were a little better at predicting the future no doubt we would be a lot better thought of. As anyone who has a solicitor knows, the best way to answer these questions is to obfuscate. Never give a straight answer because the truth is no one knows.

Hopefully it will sound reassuring that the basis of our staff training is about honesty. If you don’t or can’t know – tell the client. Our business is full of shamans and mystics who pretend to have God given power to predict how much houses will sell for and within what timescale.

You may wonder how the title of this piece relates to this question, but it is fundamental. I am proud to say that Preston Baker is a forward thinking business that requires me to take reasoned judgements about what the future of our business will look like.

When you consider what has happened to our high street during this recession it is clear that there is a general trend away from the high street. As most of our nations high streets are combinations of charity shops, estate agents and coffee shops maybe I should be worried?

The key question is why the model of high street estate agency would be under threat. Businesses that have left the high street are those that have been unable to compete with the price of internet businesses offering the same product for a lower price. If you buy the film “Gladiator” DVD on Amazon or at Tesco’s it is the exactly the same product as it was from HMV. Why would you pay more and have the hassle of parking or travel into a city centre when you can order it in seconds from an online retailer?

Does this apply to estate agency? Can the same service that I provide from my local shops be delivered from an online platform?

I have researched the brands that are claiming to be able to deliver this. They generally charge £300-£500 up front to list your property on the main national portals and act as a co-ordinator imitating some of the functions of an estate agent. This model is about offering less service for a lower cost.

If I asked 100 members of the general public about whether they wanted less service from their local estate agent the answer would be a compelling “no”. Consumers want more service; they want to feel like they are being offered value for money. I am also certain that a lot of consumers would also want our current service for a lower price.

I once heard it said that people get the estate agents they deserve. In other words, they will complain about poor service having picked the cheapest service they can find. I am certain that this low fee model will gain market share over the next 5 years as people are tempted by up-front fees that are as low as 10% of the current market rate for selling your home.

Having gone through this process of consideration I have come to the conclusion that I want no part of the less service, less fee market. My business a DVD that is the same online as it is delivered locally.

Instead I think that if the high street estate agent is to change then it should only be replaced by a model that uses the savings of coming off the high street to offer an enhanced local service. The national model misses the fundamental reason that people go to an estate agent – local expertise. They want knowledge of their street, knowledge of other similar buyers who want to buy in their area.

If you come away from the high street then you must consider what else you can deliver to your buyers and sellers. People need more for service from estate agents so that as a profession we can deliver better value for money. We don’t need to engage in a race to the bottom on both service and fee.

Tagged Market Insights; Posted 6 years ago

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