I am sure that I would not be alone in being seduced by the glamorous lifestyle of the Oppenheim Group, as featured in the hit Netflix series “Selling Sunset”. After all, what’s not to like about a TV show showcasing the day to day selling of high end property in Los Angeles and the Hollywood Hills?
A life and career that we (here in the UK) can all aspire to? Well, in many ways – yes. As the property on our TV screen is luxurious, the buyers and sellers extremely affluent, and let’s face it, working somewhere the sun shines almost every day, makes it almost the perfect job in property. Except for one thing, realtors – Emma, Christine, Maya & Co all work on commission only, and only receive a pay slip when they sell a house that proceeds to completion. Whether this is a good deal or a bad deal is a matter of debate, but does this way of rewarding success fairly value the Oppenheim Group’s sales’ team’s skills and application when doing their job?
Here in the UK, I notice that we too are moving towards this working model – but interestingly from a much lower level of gross commission from each property sold. Research undertaken by hybrid estate agency “Nested”, sought to compare the average earnings of estate agency staff here in the UK, against 29 other global locations, analysing both average salaries and additional commission.
Would it surprise you to learn that the UK came 15th out of the thirty countries sampled, with Australia, The United States, Netherlands, Canada and Germany occupying the top five places (in that order). I won’t deny that it could have been worse for UK estate agency employees, but it is clear that it could also have been a lot better.
When it came to basic pay, UK estate agency staff earned an average of £24,817 per annum which placed us 16th on the overall list behind countries such as Israel, Japan, Singapore and the UAE. Once average annual commission is added (average figure is £5,752pa) we here in the UK remain mid table in the rankings in 15th place. So, it is difficult not to draw the conclusion that despite being one of the most mature and robust property markets in the world, the UK is far from being a global leader when it comes to pay for both men and women.
So why does this appear to be the case? Well speaking personally, I believe that in very general term’s over the past 20+ years, there has been a lack of investment by many companies in training, knowledge, selling skills and creativity right across the estate agency sector. In addition, there can be little doubt that this situation has been compounded by the pandemic, that has in reality led to short staffing, demanding clients, and stressed buyers – that inevitably has meant that sales staff have always had to react to everyday events rather than be in control of them.
As a consequence, the embryonic reaction to this situation has seen some sales employee’s move to companies offering commission only pay, and a culture of high risk and high reward more commonly associated with the United States. However, with no sick pay, paid holiday, or company pension to speak of, you literally are as they say “as good as your last deal” – just like the realtors of “Selling Sunset” except with lower fee levels.
Also, for what it is worth I believe that a historical lack of licensing here in the UK, has led to too many entrant firms moving into the market. This in turn has fostered unhealthy competition and a lowering of fee levels. So in essence, we have all been witness to race to the bottom, from which low pay and poor staff retention are merely a natural but unintended consequence. This of course is not true of every firm, but certainly is true of a great many.
So what is required? Well, rather depressingly a cultural change right across the industry, that starts with higher fee levels, and results in a more driven, skilled and entrepreneurial workforce that are rewarded appropriately as a result. This I believe will lead to the general public holding the industry in higher esteem, as is the case in other countries in Europe, and indeed across the world.
A utopian view? Well maybe, but it starts with stopping any old Tom, Dick or Harry from setting up as an estate agent without any of the necessary knowledge or competence to do the job properly. This way (as an industry), there is a chance to navigate a course that starts to fix the thorny issue of historical low pay that has beset estate agency in this country for a great many years.
The author of this article is Peter Nicholls, CEO of Ideology Consulting Ltd. For more information about Ideology Consulting, simply go to www.ideologyconsulting.co.uk