For the past five years I have observed an open and often hostile debate taking place about the future shape of UK estate agency across the trade press and digital media. The discourse itself has largely centred around a narrative of High Street verses low cost On-line operators such as Purple bricks. But with the On-line business model left struggling to deliver both market share and subsequent profits – where does this debate now leave us?
Well a lot can happen in five years, and what has become clear is that a more complex trading environment lies ahead for the UK’s many estate agency firms (large and small). But I do not think that it would be unfair to say that the debate that has occurred up to this point, now looks (with the benefit of hindsight of course) both simplistic and somewhat outmoded.
So, where are the key battle grounds for change in the future? More importantly perhaps, maybe the real question should be, what does your estate agency need to do well in order to be successful? Well, I would venture to suggest that the core areas of competitive advantage should be outlined as follows;
- Consumer Choice – Buyers and sellers are not one homogenous group, as they are all different with differing preferences and varying needs. So, UK estate agency needs to adapt by offering a wider menu of services. For example, some sellers require relatively little interaction and seek a more DIY approach, and (not unreasonably in my view) wish for lower fees as a result. Whereas others, both need and value the time and lengthy participation of their appointed agent, and more importantly, are only too pleased to pay for it. Given this wide spectrum of requirements – why should all clients align to pay the same level of fee? So, has the one size fits all “no sale, no fee” model found its natural limitations, and should a much broader fee structure now become the norm?
- Pricing and Value – These words DO NOT mean the same thing! What is clear is that there can often be a considerable expectation gap between the service that estate agents say that they offer, and the true client experience. I can’t help but think that this gap will only start to close once both agent and client are a littler clearer (from the outset) as to what they expect from each other. Not easy I know, but generally we all know that in life you get what you pay for– so why should estate agency be any different? For example, claims that £795 paid up front to an on-line agent buys a seller readily available and unlimited personal service is for the most part unrealistic. Conversely, the same argument could easily be applied to much higher fees equalling value for money from high street estate agents. In other words, we need to close the gap between what we what we say we do and what we charge.
- Customer Service & Product Knowledge – Sales negotiators not knowing anything about the properties they are showing is (year upon year) the most common complaint against estate agents. So, I ask you honestly, would we all put up with the same behaviour from a sales assistant when shopping at John Lewis? There is quite simply NO EXCUSE for such poor training and customer service in an industry that spends millions of pounds on advertising saying how great we are!
- Technology & Accessibility – Whether we like it or not the introduction of technology has both changed and re-shaped the way we all buy and sell goods and services. Also, more fundamentally perhaps, the internet does not keep office hours! So, making your business open to the consumer 24 hours a day to book appointments and generally interact with “browsing” potential buyers and sellers has now become an essential part of modern-day marketing and engagement.
- Regulation – For as many years as I can remember estate agency here in the UK has been untroubled by regulatory constraint and completely free from barriers to entry. Well, those days are now gone, and estate agency is now being dragged into the 21st century in terms of government regulation and control. I would wholeheartedly agree that some of the provisions sanctioned by government are flawed, but remember, legislative protection brought in to help safeguard the public is in itself not such a terrible thing. Like it or not the word “compliance” is not going away anytime soon.
- Accepting change in itself – Remember CD’s, Blockbuster video, and a life before Amazon? Well I do rather fondly. But a new generation of homebuyers and sellers do not, and they are a big part of your business in the future, so it is time to wake up and acknowledge that both the market place and trading environment has changed, and you and your business need to respond accordingly.
In conclusion, my advice is not to blame BREXIT, on-line estate agents or indeed anything or anyone else, if you have NOT seriously considered the points I have outlined above. It is quite true that major events and outside influences can have a major effect on the property market, but this has always been the case. Remember the Gulf War, the scrapping of dual tax relief on mortgages, and Britain dropping out of the Exchange Rate Mechanism? As we should all remember (as so often is the case in life) that the true source of personal success can often lie much closer to home.