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The former chief executive of Emoov says online estate agencies charge too little, so risk appearing cheap and ineffective to potential customers.
In the latest of a long series of interviews with property consultant Chris Watkin, Russell Quirk - who has now founded a PR firm - says that when he started Emoov in 2010 its fixed rate fee was £295; by the time it went into administration at the end of last year that figure had risen to £895 but, he says, may still have been too cheap.
“There’s a psychological belief” he told Watkin, “that if something looks too cheap to be credible … then it’s not credible.”
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Quirk particularly questioned the strategy of Doorsteps, an online agency that charges £99 as a basic fee: he said it can cost well over that sum to list a property on Rightmove and Zoopla for six months, and he doubted whether even with referral fees or other indirect income such a pricing policy can be sustainable.
Referring to the online sector’s low-price strategy overall he continued: “It’s not only questionable from an economic point of view, there’s no need … People are suspicious of it. It’s too cheap.”
Quirk said he doubted whether online agents should try charging the same as High Street agents, but he did repeat a statement made towards the end of his tenure at Emoov, saying that the agency landscape as a whole was changing.
“There will be different fee propositions [from agents of all kinds]” he said. “We’re seeing some High Street agents doing fixed fees, some High Street agents doing £695, £795, £895 rates naively to try to compete with Purplebricks.”
Quirk - who admitted he was completely wrong with predictions some years ago that online agents may take as much as 50 per cent share of the market - now says it is possible they may reach 10 per cent by the end of this year and 15 per cent ultimately.
But he appears to suggest that it is unlikely they will go beyond that level in the foreseeable future.
Up until recently I have been a staunch supporter of traditional estate agents, I was one for many years and had always been anti online agents, with the opinion that their cheap fees and low service levels ie sellers doing virtually everything them selves and the agents putting it online and then sitting back and waiting for enquires. However having been out of the EA business for a few years and now buying and selling as a developer I can see that there is very little difference between the high st and online models. Bearing in mind I’m registered with at least 500 high st agents across London and the Home Counties I get maybe 5 calls a week from agents, mostly about properties that don’t match my criteria, in addition I get 1000’s of emails from agents who are simple sending me everything on their books repeatedly. Therefore I might as well look online my self as at least I can filter the results. This approach drives me insane given my 15 years experience as an agent, it’s a scatter gun approach, devoid of all skill and makes the high st agents no better than the online agents with the exception that they are considerably more expensive than the onliners. In my opinion it’s nice to be able to walk into an office and speak to someone but at the end of the day it’s the agents ability to sell that counts, and I never thought I’d say it but high Street agents are no better than the online agents now and they should be the ones reducing their fees not the other way round.
You are probably like most developers and a complete waste of time, wanting something for nothing.. gone are the days of cheap properties to flip as there is always someone out there willing the pay the asking price. Probably why you haven’t had any calls....
It sounds like a bleat to me! Developers never want to pay the market rate for anything and your're surprised you don't have 500 negotiators running around the country on your behalf? Online is the way forward for your good self, you will always find a better deal from an owner trying to negotiate the deal themselves, especially if you have 15 years estate Agency experience!
I can assure everyone reading this that there is a huge difference between online and High street Agents, Mr P is miffed that due to his vast experience, they're not acting in his interests? End of!
If I was a resi property developer, I would love the on-line format because vendors can never be as effective negotiators as the experienced professional. I've seen it happen....the last minute "chip" at the point of exchange and so on.
Founded in 2000, Right Move provided a major shift in the transfer of information between buyers and sellers.
Unfortunately it homogenised any differences between one estate agent and another, at least to many people. We all appeared like budgies on a perch and all looked to be offering the same service.
So how would some one wishing to sell their house differentiate between agents? Amount of commission appears to be the measuring tool currently in current use.
On line agents evolve and take significant market share for now.
But a data base connected to the web can't sell a property to a nervous buyer, or work through difficult legals or persuade a lender to provide funding. All these skills come around on a cyclical basis when the market dips.
On line agency has a limited business model, its can't adapt, offer one to one advice or do that most human of all things, make 2 and 2 make 5.
Sorry Russel, I disagree with your analysis, its more than mere level of commission. We as agents offer extraordinary expertise in a spectrum of professional disciplines and we will be here for many years to come.
The failure of emoov probably spells the end of the line for on-line listing based firms.
Note the fall in the share price of the once invoincible Purple Bricks. Were I an investor in such a firm I'd be wanting my money back PDQ before the business in question goes pop. The bottom line is that none of these models make a profit and survive only while able to suck in more and more "Investment".
Call me old-fashioned but I like a more ......dare I say ....."Traditional" form of investment - putting money into something that does a decent job (ie actually sells the property rather than just listing it), charges a sensible price so it can make a profit and that pays me a dividend.
Neither online agents or high street agents are the future of buying and selling property. Social media will be. Mark my words. As for 'online agents' charging too little to be credible, I think the problem (in some cases) is doing to little to be credible.
There is a distinct difference between marketing a property and actually negotiating and selling. The latter needs empathy, knowledge, expertise, humour, the ability to adapt and above all the personality of a human being. What we are seeing for those Estate Agents who grasp the opportunity, is a widening gap between those that are low fee and those who offer high quality in all they do. So it's not even an 'online v high street' argument - more an agent having the ability to prove their worth to the consumer. Even social media, whilst definitely having a big say in marketing a property in the future, will not replace the very best estate agents. Whether those agents choose to be based in a community or elsewhere is irrelevant.
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Up until recently I have been a staunch supporter of traditional estate agents, I was one for many years and had always been anti online agents, with the opinion that their cheap fees and low service levels ie sellers doing virtually everything them selves and the agents putting it online and then sitting back and waiting for enquires. However having been out of the EA business for a few years and now buying and selling as a developer I can see that there is very little difference between the high st and online models. Bearing in mind I’m registered with at least 500 high st agents across London and the Home Counties I get maybe 5 calls a week from agents, mostly about properties that don’t match my criteria, in addition I get 1000’s of emails from agents who are simple sending me everything on their books repeatedly. Therefore I might as well look online my self as at least I can filter the results. This approach drives me insane given my 15 years experience as an agent, it’s a scatter gun approach, devoid of all skill and makes the high st agents no better than the online agents with the exception that they are considerably more expensive than the onliners. In my opinion it’s nice to be able to walk into an office and speak to someone but at the end of the day it’s the agents ability to sell that counts, and I never thought I’d say it but high Street agents are no better than the online agents now and they should be the ones reducing their fees not the other way round.
Feel better now Mr P?
You are probably like most developers and a complete waste of time, wanting something for nothing.. gone are the days of cheap properties to flip as there is always someone out there willing the pay the asking price. Probably why you haven’t had any calls....
Mr P,
It sounds like a bleat to me! Developers never want to pay the market rate for anything and your're surprised you don't have 500 negotiators running around the country on your behalf? Online is the way forward for your good self, you will always find a better deal from an owner trying to negotiate the deal themselves, especially if you have 15 years estate Agency experience!
I can assure everyone reading this that there is a huge difference between online and High street Agents, Mr P is miffed that due to his vast experience, they're not acting in his interests? End of!
If I was a resi property developer, I would love the on-line format because vendors can never be as effective negotiators as the experienced professional. I've seen it happen....the last minute "chip" at the point of exchange and so on.
Yawn-man with an idea gets it wrong.Now trys to educate everyone else how to get it right.
Founded in 2000, Right Move provided a major shift in the transfer of information between buyers and sellers.
Unfortunately it homogenised any differences between one estate agent and another, at least to many people. We all appeared like budgies on a perch and all looked to be offering the same service.
So how would some one wishing to sell their house differentiate between agents? Amount of commission appears to be the measuring tool currently in current use.
On line agents evolve and take significant market share for now.
But a data base connected to the web can't sell a property to a nervous buyer, or work through difficult legals or persuade a lender to provide funding. All these skills come around on a cyclical basis when the market dips.
On line agency has a limited business model, its can't adapt, offer one to one advice or do that most human of all things, make 2 and 2 make 5.
Sorry Russel, I disagree with your analysis, its more than mere level of commission. We as agents offer extraordinary expertise in a spectrum of professional disciplines and we will be here for many years to come.
The failure of emoov probably spells the end of the line for on-line listing based firms.
Note the fall in the share price of the once invoincible Purple Bricks. Were I an investor in such a firm I'd be wanting my money back PDQ before the business in question goes pop. The bottom line is that none of these models make a profit and survive only while able to suck in more and more "Investment".
Call me old-fashioned but I like a more ......dare I say ....."Traditional" form of investment - putting money into something that does a decent job (ie actually sells the property rather than just listing it), charges a sensible price so it can make a profit and that pays me a dividend.
Neither online agents or high street agents are the future of buying and selling property. Social media will be. Mark my words. As for 'online agents' charging too little to be credible, I think the problem (in some cases) is doing to little to be credible.
James.
Behave.
How long have you been an Estate Agent.
Only 16 years.....I'm a spring Chicken to most on here!
There is a distinct difference between marketing a property and actually negotiating and selling. The latter needs empathy, knowledge, expertise, humour, the ability to adapt and above all the personality of a human being. What we are seeing for those Estate Agents who grasp the opportunity, is a widening gap between those that are low fee and those who offer high quality in all they do. So it's not even an 'online v high street' argument - more an agent having the ability to prove their worth to the consumer. Even social media, whilst definitely having a big say in marketing a property in the future, will not replace the very best estate agents. Whether those agents choose to be based in a community or elsewhere is irrelevant.
Good Man James
A survivor
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