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What Does The Future Look Like For High Street Agents?

What is the future for estate agents with many online offerings now the like of Purplebricks and EasyProperty?

https://www.youtube.com/watch?v=trNg0yLcjrc

These online companies have arisen in the past decade and have now cornered about 10% of the market. So far so good for the traditional high street agent you might think, with 90% remaining. Not a collapse of the traditional model then but more like a ‘nipping at the heels’.

Well this is my prediction, and we as a high street agent are responding to it now:

The main problem with online agents is not that they do not have a big shop on the high street. Everyone knows that most buyers look online for property – in fact, 82% of property searches start online. You may go and register in the local agency in person, but this really is less common these days. Potential vendors will be looking for a locally effective brand, and reputation remains the most powerful persuasive means of attracting business.

So it is not the shop that matters, but it is the local presence that is essential.  This is where local agents have a distinct advantage over online agents that are national in coverage.  With big money backers they may want to dominate the nation with an ever more competitive online service, but they have a soft underbelly called ‘non-local’.

Sales in my vision of the future will always be a local service. That is not to say that national online offerings will fail. There is clearly a long term future for them particularly since so much investment has gone into ensuring that they have an unstoppable impact on the way we do things.

In practice the future of estate agency will be somewhere in the middle.  The high street agents will have to change their pricing model to become more competitive, and this may result in shops disappearing from the high street (hooray I hear you say!).  But they have to be based locally and so where would you find them?  They will have to invest in more localities cheaply in order to increase volume of sales.  You cannot run a business at 25% of the income unless you have four times the number of deals.

So what is the solution?  As I said, we are responding now to the challenge and are really excited about the future.  We are launching our own fixed fee service which matches online deals but we still provide the best in local knowledge, advice and service.  We have to expand across Merton very quickly and to do this we are establishing micro offices in each of the libraries in the Merton borough.  We already have one in the Wimbledon library, just opposite our shop.  This is a mutually beneficial arrangement with the council, providing more income to the council coffers and most importantly, extending the role of libraries to keep them relevant, useful and OPEN!

So for the first time a seller will be able to have confidence in using a local agent with a good reputation but saving more than £5000 in fees.
We will not be the first and the last agent to do this, but we want to do it well for our clients.  We will make sure that you have a great experience if you choose to use us to sell your property, no matter how big or small it is.

 

This article was written by Jonathan Moss, company director of Moss & Co Sales, Lettings and Property Management Agency.

Ch-ch-ch-ch-Changes

 

When David Bowie wrote the lines ‘turn and face the strange…’ I wonder what he was dreaming up for the future?  Possibly his new Ziggy Stardust outfit?  Some fans may call him a prophet, but surely he could not have been imagining the transformation that would come to the world by the creation of the internet?  The world in 1972 was a very different place, with flare trousers, flower shirts with huge lapels…. and nylon! Slide rules were about to give way to pocket calculators.  No one had a home computer. But Bowie always loved his tech. Rockets were obviously not really tin cans – ‘that was just poetic license man’. In his interview in 2000 with Jeremy Paxman, he was adamant that the internet would change everything for all of us, beyond anything we could imagine now.

The provision of block management services is not immune to such change. And there are clearly substantial benefits for both clients and agents who ‘turn and face the strange’ opportunity.  We have indeed found in each block some residents who do not have an email address or even a computer.  In this period of change we need to be sensitive to minority concerns. It is important that agents provide for the ‘late adopters’, those who call themselves ‘the dinosaurs’.  They, being older in general, also tend to be more involved in day to day business.  So we need to keep them in the loop.  This can be achieved by simply printing out the online correspondence and posting it to them! It does not need to be rocket science.  Also, using the internet saves time to spend more of it on the phone, carrying out site visits and having face-to-face meetings.  The big danger for agents is to think that all this technology is doing their job for them,at the click of a button. But the internet is only a tool to use.  Our job is all about people.  This has not changed and, I should think and hope, never will.

But it is probably best to face, even embrace, the change rather than to resist the inevitable.

With a handheld app, laptop, or the good old desktop, leaseholders can now check their service charge payments, how jobs are progressing as well as communicating with other flat owners easily.  Everything they need to know, whenever it suits them to check, whilst jogging in the park, on the train to work, or relaxing in Cafe Nero.  Some agents will fear the transparency that this brings to their service delivery. Now, all of a sudden, their clients can see what they are doing for their money!  The office now has a virtual shop front where the client may walk in, go to the back and have a good old look through their files.  

The change is going to be harder for more established agents who have legacy systems and traditional working practices, not to mention all those filing cabinets full of documents that would need to be scanned.  Staff need to be retrained to use a new system.  And there are further challenges as the market place attracts new entrants who can start with a clean ‘virtual’ sheet, able to compete on a level playing field and offer competitive rates and a service that is super slick.
These changes are great news for the end users, leaseholders, directors and landlords.  Seamless and transparent communication and a more competitive market.  No more ‘dark arts’, service charge sinkholes or glacial response times.  Block management is being forced into the light and that has to be good for everybody involved.

 

This article was written by Jonathan Moss, Company Director of Moss & Co, and was featured in News On The Block’s April 2016 issue.