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