On 3rd July 2014, a selection of high street and online estate agency representatives gathered to debate their respective business models at a Round Table held by award winning property software provider, VTUK and chaired by Property Industry Eye editor, Rosalind Renshaw.
The debate begun with a question to the online agents on why they think their services are better than that of traditional agency. Adam Day of Hatched.co.uk was the first to answer, saying that the no sale, no fee model leads to vendors who are not serious about selling their house, and highlighted that people expect to have an online experience – “we have a fully automated back-end system which most high street agents simply don’t have.”
Russell Quirk of eMoov, added: “We’re an online agency that acts in a traditional way. The public perception is that traditional agency service levels are poor, and the service needs to be made much better. Meanwhile, Michael Bruce of Purplebricks highlighted that 57% of their web traffic is out of office hours.
It was then noted that there is technology available for high street agents to be able to offer 24 hour access and automated services as the online agents do (such as VTUK’s Taurus and Scorpio software), however many simply don’t use it – something Richard Barber, of London estate agency, W.A.Ellis picked up on: “The high street could and should learn from online agents – they’re breaking new ground with these services.”
However, something the majority of online agents don’t offer – accompanied viewings – is what high street agents felt was imperative to achieve the best results for their vendors, and a drawback for consumers choosing an online agent. Jan Hytch, partner of Arnold Keys in Norfolk and former NAEA president, said that part of the value of traditional agents was that they could “interpret” viewings and that agents were best qualified to make a judgement, while Richard Barber agreed, saying that intuition had a large part to play for traditional agents conducting viewings and trying to get the best possible deal for their clients.
The traditional agents also felt that their local knowledge and property expertise put them in the best position to advise the seller. The temperature rose when Jamie Lester, Head of Haus Properties, a South West London agency, highlighted details of a property listed on eMoov’s website for £565,000 that he would have valued at £889,200 based on his intimate local market knowledge and the history of what has sold in the specific road.
Simon Gerrard, of North London agency, Martyn Gerrard, agreed that local expertise was imperative, whilst Richard Barber added that the fees also pay for their expertise which includes planning and structural knowledge of a property.
When it came to personal service, Jan Hytch stated the importance of a mailing list of registered buyers and knowledge of what they need: “Our mailing list is our gold – we can source buyers for the vendor before a property going on the portals.”
Jamie Lester added: “Databases of registered buyers are exceptionally important – we often see cases of a house sticking on the market and then being listed with another agent and selling immediately because they have the right buyer on their database.”
Still, Russell Quirk argued that we’re in a portal culture and that 25% of the adult population look at Zoopla / Rightmove. This led nicely on to the final question of the debate; whether any business around the table could exist without the property portals. Richard Barber felt strongly that his agency would be “crucified” without the portals, especially because of the exposure they give to the overseas market, saying: “We underestimate the power of the portals at our peril.”
Meanwhile, Russell Quirk agreed that online agents would find it hard to function without the property portals – but maintained that they could do so if necessary. He said: “It would certainly be a lot harder without Rightmove and Zoopla.”
However, he was outspoken regarding Agents’ Mutual, which has said it will ban budget online agencies. He said: “It doesn’t stand a candle in a wind’s chance. I give it a year.”
Michael Bruce of Purplebricks, said: “We could certainly exist without Rightmove and Zoopla, but it would be harder work. Agents’ Mutual saddens me, because it is a closed shop. Whichever way you look at it, this is not in the best interests of the consumer. If Agents Mutual fails, we are all worse off.”
Adam Day, whose business launched eight years ago and evolved by cold-calling private sellers advertising in local newspapers, did not think he would be able to launch easily into the online market today without portals.
However, not everyone is so dependent on the portals: Brighton agent Paul Bonnett, chairman of Team, uses its own bespoke multi-listing software, and Simon Gerrard is less so reliant on portals, stating that 50% of his business came via walk-ins.
In surmising the day, Peter Grant, Managing Director of VTUK, said: “The crux of the difference between the online and high street agents gelled into two central points: service and cost. High street agents must evolve their client communications and embrace the technology available for this to match the service delivery of online, which is a viable alternative to those seeking a simple service with none of the local expertise, assistance and knowledge a decent high street agent can offer.”