Work is important to pay the bills but so is the quality of life! There is no point slaving all hours to then not be able to enjoy one's success for lack of time. Or worse, to miss out on your children growing up or helping your ageing parents because work takes up all your time - and of course when not working you are recovering from the strain...
There has also been a big shift in the consumer's attitudes. For various reasons they prefer to work with someone they know and trust rather than a big corporation.
We have seen this in coffee shop culture. If one has the choice between Starbucks or a small independent, you go to the small independent.
Years of tax avoidance (offshoring?) and generic surroundings without a personal feel have just made high streets the same everywhere with nothing which is really ‘local’.
Online shopping has also transformed the way we consume. In my opinion, the high street will probably move away from being a place to mass shop to being more a place to network and enjoy yourself - work out, eat out, and find those objects and particular services you cannot get online. Quality, originality and great service are the future.
This philosophy applies across all sectors. For example, you can look at the drinks industry. Ten years ago, the only gin one could get was London gin or Bombay Sapphire. Now there is real choice offered by small independent distillers in line with what I am saying above. For people love the idea of a small craftsmen making something special and limited in volume and above all with a story behind it.
Anyway, this brings me back to our industry - estate agency. Yes, we have all watched the collapse of high street model, and over the last ten years we have also seen the discount onliners grabbing a share of the market, but it has not really worked.
For although the latter were able to create brand visibility via mass marketing and branding roll-out, they could not offer quality of service because of the low prices they charge.
We can see from the share prices of the likes of Purplebricks and Countrywide that both models - the traditional and the recent challenger - are failing.
So, a third model, one based on very personal ‘bespoke’ service, is really starting to get a foothold.
Buyers and sellers, landlords and tenants can now choose to rely on an individual who works for himself/herself under a banner such as Agent & Homes, Keller Williams, the London Broker, Harding and Green and many others who are all trying to occupy this new space in their own way.
The difference with the individual self-employed agent is of course localism and true independence, which gives these new agents the ability to work when they want, how they want, where they want.
They set their fees and work across disciplines, and they aren't tied to a desk in a corporate structure. They are able to understand the situation better, to really look after their clients and give proper advice - the service craved above all by the new consumer. And because this model offers high rewards, they can also earn a good living while having a great life.
Probably the three models will co-exist for a while, and time will tell which of them comes to dominate, but the key will surely be who can offer the best service for a fair commission...
*Rollo Miles is co-founder of Agent & Homes
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"who can offer the best service for a fair commission" doesn't go far enough, in my opinion.
The agents that will be successful will be those that develop their personal brand. Not as in, I'm an estate agent and I'm passionate about selling homes, but as in I'm a human being with the courage to be imperfect and the desire to improve.
People buy from people and if agents don't tell their story of who they are and what they value and believe, then vendors will simply have to guess. That's why agency is still perceived as a commodity.
Prime London and Outer Prime agents should take a look at YOUhome who have led this transition. In addition to high commissions and work flexibility their approach supports lots of energy and a team culture and local focus. Their platform platformYOU enriches and augments skills and increases sales productivity with lots of sold properties proving that.
First off, I like Rollo's thoughts and I enjoy hearing different view points, but, I am a little lost at the his thought that 'self-employed' is the new future for estate agency, as there are 8,700 self employed estate agents out of 17,800 agents in the UK, ie, private individuals or partnerships who run their own businesses. Many of these self-employed agents have been in place 30 years or more, some more recently.
Then there is the franchise model, a person sets up, either under their name or a brand name, and they pay a fee to join the franchise, 1k to 50K as a one off payment, they then pay 5% to 35% of turnover (money banked to the franchisor, usually with some kind of override, say paying an extra 5% or more of any monies banked over 150k in a year. The franchisee gets all the red tape dealt with, CRM provided, training and the support of the company and other branches.
The other model is corporate agency, a person goes and works for a large network of offices owned by a bank or building society, or a self-employed person who has grown his or her kingdom so large that there are many offices, and there needs to be an army of people to run the empire.
There is an umbrella model, which is currently on trend, a hybrid of the franchise system.
Where I do embrace that there is a change in the industry is that there appears on the face of it a left wing revolution taking place - and stay with me while I explain. I am fully aware that property is not exactly a Marxist goldmine.
It may be the millennial generation or generation Z, but in many industries, people want as Rollo so aptly puts it 'freedom' to do their thing, as well as do work when it fits in with this. Also, as property grandee Chris Watkin has been teasing out in his debates, managers of estate agents and listers of estate agents seem on the face of it to be generating the wealth but only getting a small amount of the reward.
So, here is the socialist rhetoric - the ownership and non-ownership of the means of production is central to his distinction between capitalists and proletarians. So the manager or the lister may be creating tens of thousands of pounds of profit through their labour, but it is the estate agency owner - (or the mill owner in the classic theory) who gets the lions share.
The vibe in the air is that managers and listers can cry freedom and liberate themselves by rising up and carrying out the work for themselves, and in so doing re-define when the work is done and how much they get paid for the work.
But, this is utopian, as if you work for yourself, you need 118K of capital to set up and survive, until you get out of year two, as no cashflow in for first 5-months, or if you work under an umbrella or a franchise, you have to factor in maybe an extra 30K of costs to buy in plus another 30K each year you trade. So, you are in the grip of the capitalist system.
Speaking as a retired estate agent with over 30 years of industry experience, who took the plunge and set up on my own agency, my advice - if you are the type of person who likes risk, is willing to work twice the hours of agents in corporate agency (many of whom are brilliant agents), then in year three you will earn double what you earn now, but, you will have to have deep pockets.
The other factor at work, is that in theory with the advances in proptech (I am an advovacate and had in 1996 one of the earliest versions) a single person could run a whole agency on their own, supported by technology. But, the monthly cost or burn, of your CRM etc is usually far higher than employing two members of staff and using a couple of laptops. That is why the glorious revolution will never come, there may well be great managers and listers and property managers and negotiators who want to run their own business, but if and when they do - they will follow the same mould as the business they leave behind.
Yes, they can take an afternoon off for a child's birthday, yes they can work from home, or their car or the coffee shop, but, agency is increasingly more about the customer - as the boss of IKEA has recently commented, and businesses need to spend more time with them and that means more hours on the clock, the exact opposite of the 'red revolution ideal' of working for yourself so you can fit me time in around the work. Andrew Stanton estate-agency-insights-strategies.
We did set this up with power to the people in mind.
Our agents get 80% of any fees they set .
Works pretty well for them .
"collapse of the high street" - Really??
Any business that needs an office or "hub" may as well have it on the high street for 24-hour brand advertising and ease of customer visits - if nothing else. Yes, we do get lots of customer visits. Accessibility and credibility are provided by an office, rather than dealing with a "bedroom agent" with minimal support or a call centre in the background. If you are with a bigger "network" you will be governed by their fees and procedures that may not be competitive in certain areas.
If you can't afford an office - fine, but don't try and spin it as a positive and an avenue that you have "chosen"
Haha I never been called a ( bedroom agent) love it .
There is a space for all in this world .
Rollo BEA - Bedroom agent - I am often a bathroom and in the middle of a field walking the dog agent. The real nut to crack is - cost effective technology which allows more customer face to face time (or talking on the mobile) - I think the working space - does not matter - not to the client - unless lettings in which case you arguably need fixed premises.
I have run many John D Wood & co offices so I do understand about high street offices .
The days when buyers and tenants would take a day off work to walk down the high street and register with every estate are over , this no longer happens ! 95% of searches start on-line. Yes a physical location does give clients comfort, hence why we have hubs. Just like banks , travel agencies, insurance companies , mortgage brokers .... I don’t think empty , run down high street offices with one or two people sleeping at desks is a great picture or the future . This is not a cost decision but better working . Agents are more productive and have more fun . And yes I agree we are in a world of connectivity and mobile working . I would much prefer to nip over to my clients house to give them face to face feedback and have a cup of tea with them , then be forced every Tuesday morning to do vendor feedback between 10:00 and 12:00h which you get when you don’t work for yourself and don’t have total freedom.
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