Estate Agent Today

Market v Market Share

The RAT (Rawlings’ Agency Tip)

Market v Market Share

Green Shoots come with a Warning!

On Wednesday, I attended a meeting of some of the excellent agents that comprise the South-West region of one of the national affiliate groups of estate agents. Going round the room, each of the attendees were asked to give a brief overview of the state of the market in their area. The response was generally very upbeat and positive – with one agent reporting his best month in 16 years! Another reported a “success” story of having finally sold a house that had been on the market for three years. Even better – he got a multiple agency fee even though the two other agents instructed on it had closed down! 

“Totnes Theresa” was among those who pointed out that there is still a dearth of properties coming on to the market and that this has apparently put pressure on commission percentages which had, during the worst of the market, begun to rise.

With the greatest of respect to these excellent agents, I see two common themes emerging that could potentially undermine their business, and I suspect, that of the vast majority of estate agents in the UK.

The first issue is the one of going with the flow of the market. We moan when the market is down (and we blame the market), and we celebrate when the market is up (and we often take the credit ourselves). In my opinion, market share (as opposed to the market itself) should be the overriding gauge of success (as well as money in the bank of course). The market will do what the market will do – we are not the market, nor do we have any control over it.

One of the advantages of the downturn is that your weaker competitors close down. The problem is that this can give you a false sense of success, whereas it is actually simply by default that your figures rise. For example, if your area has experienced a 30% decline in transactions, but a 60% decline in competitor numbers, you should actually experience an automatic doubling of your own volumes. If your sales are up by a “healthy” say 75% then your rebased market share is actually slipping by 25% - so let’s be careful over complacency, whilst remembering that if your competitor is drowning, one should always try to stick a hosepipe up his nose (unless of course you work in Devon where estate agents are terribly nice, and supportive of one another – would that other regions follow their example!).

The second issue is “sliding fees”. Fees are not sliding – we are allowing them to slide, because we believe that we won’t get that precious instruction unless we cut ours, or match those charged by our competitors. This suggests that you simply don’t believe that you are worth your fee, or position yourself accordingly. Seth Godin, the bestselling author of “Marketers are Liars” rightly says that “low pricing is a poor substitute for good marketing!” How often do you stoop to this last resort? A last resort is exactly that – a last resort. This suggests that you don’t have any other resorts to which to turn first. I know about one hundred of them. I obviously cannot share the content of my latest three-hour “Raising Fees Instantly” seminar here, but would be happy to present this to your agents (or even your competitors if you wish). Please drop me a line at rrawlings@estateagencyinsight.co.uk if you would like to discuss this, or you can buy an earlier version of the seminar on a boxed 3-CD set online at http://www.estateagencyinsight.co.uk/services/cd-audio-seminars.php

In the meantime, do milk any improvements the market may offer you. They are free of charge, whereas your concerted conscious effort may be required to drive your market share forward.