Hybrid agency Purplebricks has launched a recruitment drive for what it calls ‘local property experts’ in 17 parts of the country from Cornwall to Aberdeen.
The locations include relatively low cost areas such as Coventry, Derby and Warrington, and higher end markets such as Newbury, East London and Salisbury.
The promotional material for the jobs includes the description of local experts as individuals who will “support both our vendors and buyers, ensuring delivery on the promise of everything you'd expect from the very best traditional estate agent more efficiently and cost effectively.”
In its last statement, Purplebricks said in October last year that it then had 150 LPEs, a figure it wants to double by spring 2017; this recruitment drive is the first part of that programme.
The agency is backed by star fund manager Neil Woodford and is now riding high on the Alternative Investment Market, regarded as London's junior stock market, after three months of roller-coaster activity.
Its 240m ordinary shares were placed at 100p each based on a market capitalisation of £240.3m on launch day in mid-December; the firm had lost around 25 per cent of that by the end of January but this week its price has hit an all-time high 132p per share.
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The dumbing down of the estate agency sector! It's happening in the USA as more part time workers are enticed into a sector that is already over- burdened with people willing to do whatever it takes to win an instruction. At least over there, there is some barrier to entry.
Purple Bricks' ability to retain existing LPE's will ultimately decide if they are ever to be successful. It's easy to hire, with optimistic promises, but much harder to retain quality staff.
There is definitely an element of race to the bottom and dumbing down about all this.
I don't know what to make of Purplebricks. They make a lot of noise and everything about them is very loud and in-yer-face - from their branding to their awful TV adverts. But they don't seem to be very successful at the bread and butter of estate agency.
On the other hand, they have plenty of big money behind them, tonnes of PR and name (and brand) recognition that many trad agents would die for.
I just think, like CW and Foxtons before them, they are biting off more than they can chew. Too ambitious, too many PR own goals, too much style over substance.
Budget agencies CAN’T deliver everything that a traditional agent can to the best interest of many vendors when selling:
** Of late I have been working with more agents showing them how to win more listings by offering clients greater sub agent exposure. budget agency ALONE can’t offer this as fees are too low to sub out. As such low cost agency are not able to offer full traditional agency services.
So the 'local'; agent covering my area wasn't as advertised 'local' after all they want a more locally type local.
The future could be bleak for estate agents unless they up their game. Hybrid or online-only estate agents are the tip of the iceberg. The next wave will see eBay-type networks that allow buyers and sellers to get in touch with each other. The antidote is to provide a quality service at a price that reflects the expertise, marketing reach and high level of service that the agent can offer. Too many people are going down the line of price cutting. It's a race to the bottom.
I get your point about fee-cutting, Steven. But haven't we seen in the past that private sales don't really work for the mass market? I mean if it was going to take off, it would have done by now, wouldn't it?
I think you make a very prescient point. Estate agency, more than ever, needs to move with the times and be ahead of the game, or they will be left behind. It seems likely that there will be the call for traditional agency for some years yet, but buyers and sellers will be looking for alternatives. If agents charge too much of a fee - and don't back this up with an excellent service - they will start to find instructions much harder to come by.
I can understand the line of argument that traditional agents who have had a high-street presence in a local area for years would provide a more intimate, personal service, as well as more experience, knowhow and tricks of the trade than a purely online-based operation who have only recently entered the market. But it's not the case that every estate agent offers good value for money and a superb service. Many do, but many more don't. Therefore it's inevitable that people will look for cheaper, more flexible services.
It'll only become a race to the bottom if the levels of service diminish. As we've seen with Lidl and Aldi in the supermarket arena, they have made the likes of Tesco, Waitrose and Sainsbury's up their game quite considerably. They offer cheap, good value produce, but it's high-quality produce.
I think we are seeing too many online agents entering the market - and traditional agents, for that matter - but it looks like hybrid, where the best of both worlds are merged, will be the way forward for agency.
I think an eBay-type thing will be the future - it's no doubt something the likes of RM and Zoopla already have in mind - but we won't reach that stage for a few years yet.
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