A national newspaper's online business blog is predicting that Zoopla will increase fees to match those of Rightmove, but that sellers will insist their agents publicise homes on both existing portals - even if it means not doing so on newcomer Agents' Mutual.
The Guardian's business blog, which is not by-lined, says that although Rightmove shares have fallen back about 20 per cent to £22 in the past four months, most long-term investors will regard that as a mere blip having paid only 200p per share six years ago.
The blog says agents now pay Rightmove about £607 a month per branch while Zoopla charges £301. The next ambition [for Zoopla] seems to be to try to charge as much as Rightmove claims the blog.
But it says that rather than engage in do-or-die combat between the two portals this scrap will be fought between a company with a 70 per cent profit margin and one that starts at 45 per cent and would like to have 70.
The blog is critical of Agents' Mutual's decision to oblige member agents to choose one other portal on which to advertise - effectively forcing them to use Rightmove or Zoopla, but not both.
How is that proposition meant to benefit the end-user, homeowners wanting to sell their houses for the best price Sellers, one suspects, will insist on being on both the biggest websites claims the blog.
The blog hints that sooner or later, effective online selling of homes will mean at least some old-school estate agents will disappear - although it admits this is not happening yet.
And it hints that despite the challenger portal, Rightmove and Zoopla will win out.
Their profit margins look fabulously rich but, provided the pair don't exploit their duopoly too ruthlessly, it is also hard to see what's going to change it concludes.
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Comments
Theres no real benefits in my opinion.. sigh!
Joanne - [url="http://www.hmrctalk.co.uk/companies-house-contact-number/"]Companies House uk contact telephone number[/url]
So do I.
But why would our vendor want or be expecting to sell his property in the first days of marketing and using just a portal form of advertising.oh wait you must be an online only agent.
Keep it shtum but a little dickie bird told me that the website will actually be out in November and there are a number of USP's to be announced that will put non AM agents in a position where they will have no choice then to sign up!;)
Brilliant, I didn't know about the 5 day clause! Looking forward to the launch, and hoping a good number of our competitors sign up!
'We'll put your property on the biggest property website (the one everyone has heard of) a week before our competitors, so which agent are you going to choose Mr Vendor'
Thank you for your reply Colin, but I think to take one comment when I was discussing the concept, is a little blinkered and a cheap shot. I'm sure it will take more than a gimmick too. I have no idea how many buyers would find an AM site, but to be fair nor do you.
What I do know is that to drop one of the portals, support and promote Am will not harm my business.I don't have to convince the whole country to visit the AM site, I just need to convince my local market. That doesn't require millions.
Real Agent,
"perhaps additionally agents agree to list property on it 5 days before it goes with the other portal, [u]then it becomes the site of choice for buyers."[/u]
Really
So its as easy as that then. Buyers would automatically flock to a site which lists a small proportion of the total number of properties coming to market five days before other portals
100's, 1000's and even millions of pounds have been lost by businesses on such simplistic assumptions.
I questioned at first the policy of saying AM and one other portal but to be fair it is probably essential. There are very few businesses that will pay for advertising on three portals and without charging AM will struggle to generate the fees needed to offer any form of consistent national advertising.
Will sellers see it as a cartel, thats difficult to know but if it has the support of the majority of agents and perhaps additionally agents agree to list property on it 5 days before it goes with the other portal, then it becomes the site of choice for buyers.
To the post that said they didn't like being dictated to, I agree nor do I but as someone has already mentioned we are already being by certainly Rightmove and Zoopla will as soon as they feel confident.
In my opinion AM is essential for real estate agents (forgive the pun) to regain control over their expenditure and invest in, what I believe we are really all about, which is a service based industry to those who wish to sell or let a property.
Can anyone who supports or has joined AM give me [u]one[/u] reason why buyers will decide to search on AM I any type of numbers
@Simon said
"Endlessly inventive!"
As your valuers will need to be when out on a val in January and vendors want to know why you are not on Agents Mutual, you can always just tell them to say....."Well it's my boss his a teeny bit stubborn."
;-)
Jonnie, the exclusions to membership of agents mutual is well documented, and I would suggest that if you are not aware of that, then it is you that are ill informed.
Have you not worked out that because of those restrictions, agents mutual will only have 20-40% at best of the property for sale so the big two will still have the lions share, and do you really expect them to say, 'Oh well, agents mutual has launched now, so we'll creep away quietly and die' or perhaps they might just be fighting back (just as you do when you get some new competition!)
Fact is, whether you like it or not, the internet is where leads come from, and although no-one likes paying their fees to Rightmove or Zoopla, they provide far more cost effective advertising than the local paper, which most agents still use without a second thought!
Would Mr Springett be heading up agents mutual now if Primelocation had achieved it's stated aim of knocking Rightmove off the top spot I very much doubt it! You would also do well to remember that, to quote Mr Springett, agents mutual is nothing more than[b][i] 'a bet on the future of high street agency' [/b][/i][i][/i] Clever trick of Mr Springett, perhaps next time you want to put someting on a horse in the 3.30 at Newmarket, you can get all your mates to pay for it!
An ex-corporate, 4 years ago I was paying 120 pm for rm sales. I now pay over 500 for lettings only. Do I feel satisfied as a customer of RM What do you think Am I looking for alternatives There is only so much a business can take in terms of constant price rises and wasteful marketing packages from a monopolistic entity.
Imo The disruption that AM will bring to the market could have consequences that few will have considered.
I understand that the theory behind AM is good for agents but successful businesses satisfy their customers needs first and foremost - not their own. RM especially gives househunters the convenience of finding just about every property for sale under one roof - an obvious fact but one that is ignored or underestimated at AM's peril. I am finding that Zoopla, increasingly, is gaining popularity among sellers and buyers. When both of these portals lose inventory to AM it won't take Joe Public long to realise that they now have to search THREE portals to see all available property. That is the exact opposite of what they want and if AM or their members believe for one second that they will not end up being blamed for this - and that the press will not jump negatively on them - they are deluded. If the press advertise that all of this inconvenience has been caused so that EA's can save c300pm per branch when fee income ranges from 1000 to 10,000+ per sale - Joe Public will be steaming. And rightly so IMO.
The likelihood is that Zoopla will be the portal that suffers most - but that could turn out to be a disaster for AM and EA's in general. If I was in Zoopla's shoes I would seriously consider allowing Joe Public to advertise directly on the portal and if that happens - with their name awareness, advertising war chest and (I believe) what would be a very receptive audience - it could devastate the income of EA's.
I attended my local AM meeting recently and the vitriol and sheer hatred directed at RM especially is IMO making those involved blind to any other motivations and opinions other than theirs.
That is not the basis of sound business judgement.
I cannot see any benefit to Joe Public from AM - only disruption and inconvenience. And for that reason alone it will fail.
The one advantage of AM is that it strengthens an agents negotiating power with the big two
Endlessly inventive!
Fair point, I guess one sale like that makes it worthwhile, definitely not worth arguing and losing the instruction
"What you are forgetting Jonnie, is that Agents Mutual is setting its self up to be an exclusive club,"
With the greatest respect what are you talking about. Why not go and find out some of the agencies that are on board then revert back with a more informed post.
What you are forgetting Jonnie, is that Agents Mutual is setting its self up to be an exclusive club, so there will be a large portion of the industry who will not be on there. When you take into account the corporates, affinity groups (and dare I say, online agents) etc etc who are not 'allowed' on Agents Mutual, it is self apparent that Rightmove will survive.
I find it fascinating that they have a defined critera for membership, claiming that only professional agents will be able to join but they welcomed Spicer Haart! That leads me to believe that it is all about money, exactly the same as any other portal!
Its fairly simple, RM & Z have us agents by the short & curlies ... especially those of us who are not part of the very largest corporate chains who allegedly get very substantial discounts. RM & Z both promise their shareholders that they will increase their profits a lot (most of which will be achieved by higher fees seeing their penetration of agents is close to saturation ... though they will doubtless seriously consider allowing private ads to further raise revenues). We can either sit back & grumble or take action. With all due respect to most attempts to provide an alternative portal so far, this one is being championed by a highly experienced individual (Ian Springett who created Prime Location) and already has very significant financial backing. It will launch. Wheter that launch is a bang or a fizz depends on us putting down our own money & support ... I have, to me the risk is worth it. AM will not screw us for fees as we will own it ... RM & Z are all about profits. IF AM is a success then RM & Z will need to reduce their fees .... pretty simple.
I agree with some of what Simon Shinerock says; Vendors want a good end result and Rightmove and Zoopla don't guarantee that, there are other factors. I also agree with Guest (Jonnie); I think Agents' Mutual are forcing people to pick between Zoopla and Rightmove to ultimately get rid of them both. The rising prices are not helping these portals' cases and Zoopla offering discounted shares to its members seems like the cowardly way out.
@Simon Shinerock said
"Also they will be told about it in a negative way by agents not on it."
You can picture the script on a valuation by an Agents Mutual agent from January.....
Customer: Your competition has suggested that I should ask all other agents that value my property if they are on Zoopla and if not why not
Agents Mutual agent: Unfortunately we have noted that the quality of leads from Zoopla is not that of Rightmove, we have found that most people use Zoopla for their valuation tool but don't worry as i'm not going to value your property as per the figure stated by Zoopla, which is 50k under market value) and instead value your property at it's true value taking into account all the upgrades (including extensions, new kitchen, bathrooms etc) made to your property.
Customer: Ok so are you on this new website that's being plastered all over the tv and on buses and advertised in the local press, social media etc by all traditional and well established high street agents
Agents Mutual rep: Yes that's right, and in fact if you look on Zooplas website you will notice that many agents no longer use Zoopla and instead use Agents Mutual, just take a look and see for yourself.
The list of counter arguments are endless Mr Shinerock!
All those crying about the "one other portal" policy are completely missing the point. Rightmove & Zoopla plan to raise fees and have been quite bold in stating it, whilst at the same time both allow all and sundry on to their websites. If Agents Mutual works then there will not be the need for Rightmove or Zoopla, the plan is to kill them both off.
Gary, would you have done the same if the fee was 3000 You say you dont like being dictated to but surely that is what Rigtmove and Zoopla are doing by saying "Pay our incredibly high fees or Vendors will not use you." When Zoopla first started to get traction i used the name to win multiple instructions over our cometition at the time as we were the only agents in our High Street using them and the market was tough so most Vendors knew they needed the most coverage possible. I didnt get them all though, even then. In this market i think a decent agent would have a very good chance of convincing a Vendor that Zoopla isnt needed. Rightmove is the big one and not being on there would be a massive obsticle IMO.
We would agree with the majority of Simon Shinerock's comments and certainly share his stance re Agents Mutual with their restrictive policy towards portal choice. Clearly an attempt to divide and conquer. However I would take issue with the statement; 'The biggest fallacy is that it is vendors that dictate where an agent advertises'. From personal experience this is not the case. We were very close to NOT securing an instruction (15,000 fee) because at the time we were not on Right Move, only Zoopla/Prime Location. Our potential client was insistent that she was only prepared to instruct an agent who was on both the major portals as she and her friends were all Right Move devotees. And this is from a lady who actually purchased the house in question from us five years earlier and we weren't on Right Move then either! Despite our protestations that we didn't need to be on RM to sell her home it was do or die so we signed a contract with RM, got the instruction and collected a handsome fee. Unless Agents Mutual can offer something which is inherently different or radical from the existing duopoly we cannot see what advantage being with them is. As an independent agent we do not like being dictated to and the 'one or other' strategy of AM has not endeared them to us.
The biggest fallacy is that it is vendors that dictate where an agent advertises, all the vendor is interested in is that their chosen agent delivers the goods. Just being on many portals does not win or keep instruction, where and when an agent advertises should be down to their judgement of market conditions. The problem with agents mutual is that it is a regressive concept that will be actively unpopular with vendors who wil see it as an attempt at a restrictive cartel. Also they will be told about it in a negative way by agents not on it. This publication advised agents mutual to drop the restriction and was met with accusations and conspiracy theory. Some people will only learn by their experience I suppose. My view is that in the future Vendors will use sites like trip advisor to select their agent as the default option assuming they haven't already decided by local reputation etc. I don't believe online agency, with no negotiators on the ground, has any hope at all of becoming any more than a niche market for skinflints, who will end up costing themselves time and money. Having said that I see no need to stop them advertising with whoever they want, the more money they spend the faster they will fail.