An online agency launched by a traditional high street agent to ward off competition says the online business model might have to change in the light of Emoov’s financial crisis.
Love2move, founded in February 2017 using an online platform developed by the Lancashire-based traditional agency MovingWorks, allows bricks and mortar agencies to offer customers a fixed-fee listing service for £895.
It says it now has 20 agencies signed up to the format but now warns that other online agents “may need to reconsider the nature of their offer to market to make it work.”
Love2move says this is because of what it calls the Emoov “drama” - that agency is looking for a buyer at a price expected to be well below the £100m paid for its merger with Tepilo and Urban over the spring of this year.
“There are [also] claims that by making Purplebricks the biggest estate agent in the UK the consumer has voted for a change in the way houses are sold, but is that really the case, and where does the traditional service fit in all this?” asks Love2move director Mark Worrall.
Now he has set out an online survey which he wants agents to participate in asking, amongst other things, how online agencies have affected the wider housing market and whether Emoov’s current model is sustainable in the current market.
Worrall claims that offering vendors the choice of a traditional service alongside an online platform gives agents the best chance to win instructions.
“We believe this is the future of estate agency, whereby clients are offered a menu of items and they can choose the options that best suits their needs and budgets” he adds, claiming that his concept marries the effectiveness and convenience of an online service, backed up by local knowledge and professional expertise from high street agents.
One of the agencies that has signed up to Love2move is Kirkham Property in Oldham.
Spokesman James Patchett says of the model: “The choice we give clients gives us a USP and whilst online isn’t for everyone by offering it we have protected our business in challenging times. Not only are we now able to attract new clients, but also by demonstrating the difference in the online and traditional services we have been able to increase the fee we charge for a full service. I firmly believe agents who can offer choice but maintain profitability will protect their business and our industry.”
The Love2move survey is here.
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Being an ex online self employed agent in the UK and worked in the USA as a realtor I have seen the different ways we do business. I've also had talks with emoov and yopa from a recruitment perspective. First off after chatting with emoov they came across in complete disarray. I received wrong emails from them and also the other communication was very poor. Their CEO Quirk is obviously clever and he can see the writing on the wall by trying to align himself with countrywide previously and he's burning through cash in his war chest. As for the chatter that emoov has a price tag of £100 million, that's crazy and very very unlikely that anyone is going to offer anywhere near that unless they are crazy to but crazy things happen, the brand emoov is worthless and tepilo probably in these conditions worth something. They both have no real assets apart from the Beeney name. For £15 million you can set up a very decent online model so why pay a premium? Yopa is happy to wait in the wings and pick up the pieces but they are clones of the Purplebricks model. My take is that online won't be a big player in its current form in the UK, USA or Australia. People buy Jaguar cars because they can afford them and they choose not to buy Dacia. This plays out in their other shopping habits and with who they choose to sell their home etc. For that reason I see this shake up still panning out in the sector in the UK but not the USA or Australia. The trouble with online in the UK is the support and ongoing contact from the local agent and post sales. From what I saw its absolutely terrible. The cases I was involved with horrible and basically the clients liked it or lumped it. If they filed a complaint they would be offered a partial refund or if they pushed it even more and often a full refund. The firm Trust pilot is also very questionable, I've seen poor reviews removed due to a technicality. The majority of the complaints are lack of support from the agents and post sales. Although the training is excellent at Purplebricks almost the entire focus on the two week course is the sales pitch. There is almost no emphasis on support to the client. The second week of the course is entirely learn the pitch and get them to sign on the line that is dotted.
Working with an online agent means long hours and little support and the money does not equal the effort if you want to do a good job. The agents that do well there don't mind selling and dumping and leaving HQ to try and pick up the pieces.
The majority of the territory owners are really good and the lpes are mostly good but Purplebricks have seriously over hired and their attitude is throw it against the wall and see what sticks.
At the regional training sessions the focus again was the sell not support.
Clearly these online agents are focused on selling and not supporting and pumping and dumping the stock.
Why have the online guys made an impact on the traditional? It's easy to answer that and it's advertising that's helped them make this dent in the traditionals piece of the pie. By spending many many millions on TV radio and internet it's gained market share. Advertising definitely works. The big boys like countrywide have rested on their laurels. But sequence I think is a different animal and will come through this turmoil quite well as they have good senior management from what I can see. In addition I see the small mom and pop agents surviving but some multi branch and small chains will fall by the wayside.
In the USA the biggest problem Purplebricks has is that a lot of realtors don't work full time and these guys and girls make a hefty commission check from one sale. The average commission is say 5% and the realtor on average walks away with 65% of the total with the broker getting the remainder. So take a 200k sale the realtor gets 6500 when they sit down with the title clerk on closing. They sell one or two a month happy days. With Purplebricks they have to work full time for less than half that. In addition and this is looming they haven't been sued yet in the USA and they will. Another massive part of American business is customer service, they are the masters at this but Purplebricks seriously lacks it. Michael Bruce has said some pretty brutal things about the UK & US real estate markets and he's taken on a lot of powerful people with very deep pockets. His attitude in business is "it's better to ask for forgiveness rather than permission"
In Australia the market is turning into a recession for housing and I see Purplebricks possibly using that excuse to withdraw from that market if it continues.
In summary this shake up is ongoing. I see online as a viable option but not huge. The bad press will turn the tide on the online sector. People will use them but people will always buy Dacia.
The traditional boys are rattled but they need to learn from this lesson and they will come through this but they have to be a lot better. Michael Bruce talks about online and only online but that's never going to happen. Traditional and online will be the two forces and people will decide which is better for them.
Insightful Steve, this concurs with other insiders views that I have heard. Your views on the US model are spot on too.
Thank you for taking the time to write it.
I wish the consumer would understand that selling a house isn't just about the listing -its about the whole process and when they realise that it's too late - they've paid and stick with it. Then the rest of the chain pick up the pieces - Purplebricks low price is subsidised by the traditional agents doing the work they should be doing.
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