Do internet estate agents really threaten traditional high street firms?
The simple answer is NO. This is not me trying to lull myself into a false sense of security.
I have heard this warning for years, and whilst the business has changed to meet this challenge, many agents are expanding the number of offices.
I respect many internet based agents and sincerely believe they have added much-needed innovation, but they will not replace us. They did make us pull our socks up and embrace the cyber generation.
The truth is that ALL good estate agents are internet estate agents these days; some just have the added bonus of an office and the benefits that go with it. In fact, my web ranking is higher than many internet agents, my bounce rate is better and our visitors spend more time viewing more pages. But we are NOT labelled as internet agents simply because it’s not the only place we do business.
I was shown a website of an ‘internet agent’ today and all it comprised was a home page and a link to their properties on Rightmove and FindaProperty. Hardly an agent – rather a notice board. This particular agent charges 1% plus VAT to simply list your property on Rightmove and Primelocation.
Property is different from buying other products. A laptop is a fixed specification and it is easy to shop around online and find the best deal. Homes are different – there is a ‘feel’ which cannot be conveyed without viewing.
M&S, Tesco and others have very advanced online sales capabilities, but they too are opening more outlets. The internet hasn’t destroyed them. In fact, it has done the exact opposite because they have embraced the opportunities it offers.
I did an internet shop with Tesco once. I ordered Jiff Lemon juice. It was out of stock and substituted with Jiff Lemon Cream Bathroom Cleaner – a good product, but abrasive on pancakes. Likewise, the steaks that arrived were not ones I would have selected from the shelf. ‘Sell by’ dates were such that a lot of the week’s shop needed to be eaten in three days. The point is that there needs to be a physical interaction with some products.
Internet agents have massively lower overheads, but sometimes it is impossible to know with whom you are dealing, and in some cases, you have no idea where the agent is actually based. It could be overseas or in a spare room next door.
One of the key factors an agent has to address is valuation. You can’t do this if you don’t know the area. Often internet agents will cover a much larger geographic area than traditional high street agents and as such cannot possibly know the price of property unless they research the price at which local agents have sold comparable properties – but they won’t have seen them.
Even surveyors use local high street agent to confirm value using the ‘comparable method’ of valuation, then adjust for any faults or features.
I appreciate that there are many websites that record sales prices, but these records are not added until some time after completion, not when the price is fixed at the point at which an offer is accepted, often six months earlier. Likewise, whilst the press may quote house price movement using a single figure, it fails to account for the immense regional and local variations.
Traditional agents also accompany viewings. The office is a place to meet and ensure that viewers are genuine. Staff have the opportunity to get to know their applicants and listen to their needs and wants. Local staff can point out places of interest, stations, schools, local tradesmen and much more. I often hear applicants advising that they telephoned an online company to enquire about registering and were asked to visit the website and call back if there was anything of interest. Madness.
It is often said that buyers come in to buy a horse and leave with a camel. This is because often, we will know properties which meet needs that buyers may not have considered.
I once sold a Victorian three-bedroom terrace house to a couple who initially registered for a two-bedroom flat with outside space and a hobbies room. Was it because I was a good salesman? Yes, of course, but also because I knew that what they wanted did not exist – but I found something that they hadn’t considered but which ticked almost every box.
Buying and renting is a people business. It’s about communication and interaction, from which understanding is born. Yes, internet agents offer lower fees – but they would, because they can. I am also sure that despite these lower fees, their profit margins per sale are much higher than ours. We have office costs, premises, paper-based advertising, boards, cars, staff, and so the list goes on. Great for a landlord or seller, but this is the key issue: buyers and tenants DON’T care because the agent charges them nothing.
They want service. They want assistance. They want advice and recommendation. In fact, a good agent will provide buyers with an all-inclusive one-stop service – and what’s more, it’s a free service.
Not many internet agents subscribe to any form of regulation. Some are members of the Property Ombudsman Scheme but customers often don't realise that the TPO is NOT a regulator, but rather a redress scheme.
If an agent goes bust or your money is not where it should be, it’s too late for a complaint as all the TPO can do is impose a financial penalty. Surprisingly, there are many tenants who do not think twice about handing over large sums of money to a company with no office to people they have never met.
Recently, I met a tenant who paid a deposit and one month’s rent for a property in west London which was advertised on a ‘free noticeboard’. It was a bargain. On the day of move-in, he arrived and met two other tenants who had done the same thing, and all three then discovered the property was already occupied.
Then I helped a landlord who rented through an internet agent and the tenancy went wrong. The deposit was registered, but the agent’s registration lapsed. It cost the landlord over £6,000 – and guess why he used that agent … they were cheaper than we were. He commented that as he didn’t know where they were based, he couldn’t even visit their office for a therapeutic rant.
For the avoidance of doubt, had it not been for the rise of the internet agent, we would not be so sophisticated in our online marketing. We owe them a debt of gratitude.
There really are some excellent internet based agents out there who offer an alternative to high street agents. And that is the key word – alternative. Not replacement.
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Comments
If I had his reputation I'd put it on the block and PAY someone to smack it with an axe!
"And as far as the comparing of comparable valuation methods is concerned: -
I see that my request for specific information from agents about how you generally calculate prices based on comparable evidence, seems not to have been acceded to. "
It has been explained - you just dont understand. You are anti agent and make yourself look very silly.
EW replied to you - yet these points have been ignored and you write the worst lot of drivel ever.
Peter - for the love of GOD please shut up.
Hendry "I'm prepared to put my reputation on the block"
Mmmmm. Not a huge risk.
We've got to 'net this down', sum up this debate rationally. It's TIME!
What we are really arguing for (and against), is whether we should continue with the status quo. Has it served us well enough, really?
I don't happen to think so.
I'm saying we should not simply carry on doing what is currently done, because of the serious problems presenting themselves right within the heart of the private housing market and the statistics prove that.
When doing market appraisals, most estate agents seem to be saying they should be using 'gut' reaction based on whatever 'evidence' seems appropriate at the time, instead of a proper analysis to decide where to pitch the next asking price.
I'm saying let's use some 'applied logic' to decide if changes to the 'gut' reaction model are worthwhile, based on currently available tried and tested house valuation methods.
My question is does the 'gut' reaction model do accurate market appraisals (broadly in line with mortgage valuations) to pitch asking prices in line with current supply and demand measurements? My answer, is no.
If it did, the throughput of sales being completed would be broadly smooth. Because this has markedly fallen off, I am more convinced that a revision in the way houses are appraised for sale is needed.
Here are some useful market trends regarding price levels, published by the BBC earlier:
http://www.bbc.co.uk/news/business-12645166
Here is a link to the full BOE Credit Conditions Survey (current):
http://www.bankofengland.co.uk/publications/other/monetary/creditconditionssurvey110331.pdf
Extract: "Lenders reported that demand for secured lending for house purchase had fallen markedly once again in 2011 Q1, but only a small net balance of lenders expected demand to fall any further over the next three months."
Nationwide Data Download:
http://www.nationwide.co.uk/hpi/historical.htm
A link to the weak current Gross Mortgage Lending in February, from CML:
http://www.cml.org.uk/cml/media/press/2911
Extract: "Gross mortgage lending was an estimated £11.3 billion in March, a 21% rise from £9.3 billion in February and a 2% decline from £11.5 billion in March 2010, according to data published today by the Council of Mortgage Lenders.
Gross lending for the first quarter of 2011 was therefore an estimated £30.1 billion, an 11% decline from the fourth quarter of 2010 (£33.9 billion) and a 1% increase from £29.7 billion in the first three months of 2010."
I think you have to buy the statistics for volumes of completed sales (or throughput) from the Land Registry but the volume of completed sales is running at about a third of the volume at the peak of the market (my interpretation of the graph seen).
http://www.landreg.gov.uk/house-prices
I'm prepared to put my reputation on the block, so to speak, although neither I ,nor any normal person, can definitely foretell the future. My position is that IF sold prices can sustain themselves at average price levels seen in spring 2010 (or better) until spring 2014; AND the number of completed sales transactions increase back to levels seen in autumn 2007, I will stand to be corrected about the need for the changing the way asking prices are arrived at.
If this does not happen though, and average sold prices in fact decline; with a static (or falling) number of completed sale transactions, those arguing against me, for no change, will be proved wrong.
To emphasise it what I am, in effect, saying is that if it is right to leave appraisal methods as they are, the market should increase its completed sales throughput by spring 2014, back up to average levels of completed sales seen before the financial crisis at the end of 2007. If this doesn't happen, those arguing for this must have been wrong.
Most of us know that change involves effort. I'm saying let's decide on the 'merit' of what to do, instead of just doing more of the same, with no effort required. To coin a well-known slogan (but slightly change it!) I'm saying if is IS broke, let's fix it now. Why wait and suffer more?
From reading the considerable number of comments, on both this and my own EAT blog, I very much doubt that most people contributing to either really want to find ways to improve market performance at all. By not doing so they will fail to help the majority of those wishing to move house this year.
And as far as the comparing of comparable valuation methods is concerned: -
I see that my request for specific information from agents about how you generally calculate prices based on comparable evidence, seems not to have been acceded to.
Providing this information would have brought this debate to an early conclusion by demonstrating agents' competence in this area.
Instead, the fact that the information has not, so far, been provided does raise the suspicion level significantly, when it comes to the lack of good practice in this vital area. It's a pity so many agents are so good at avoiding thorny questions (and throwing red herrings into the works too) :( )
Reply to EW with broad (and brief) answers:
Peter,
Respectfully, our views appear poles apart and in such circumstances, it is unlikely one will convince the other.
ANS:
Well, this suggests that a full debate is required, or at the very least, we should arrange a proper discussion and that doing this would be the best solution because the things we disagree about affect other people and are therefore important. Doing nothing would not serve those people well.
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I sincerely believe your views are based upon stereotypes and supposition brought about my a very small minority of bad agents.
ANS:
My evidence suggests a larger number of agents are exhibiting 'bad' behaviour currently, to use your phraseology. In case I am correct, wouldn't those overseeing the quality of agents, wish to investigate thoroughly and openly, and make all necessary improvements? Are there any 'bodies' doing that?
--
Nevertheless, out of courtesy, I shall respond to your 3 points in order corresponding that of your post.
1. I do not justify such practices, far from it. I am on record as saying that it is wrong. I have been approached by a number of lawyers offering 'incentives' and I have always declined. The reason is that the lawyer is legally bound to disclose such payments to their client. I ask lawyers to tell their clients that they will offer a small discount as they were recommended by us – that gives a feel good factor and comes as a nice surprise rather than “How much money are they making out of us?” I have the same view of all service providers. In the scheme of things, the fee our clients pay is sufficient without accepting secret commissions.
ANS:
You are saying that you decline to accept referral fees but this does not, in any way, mean that the vast majority of agents refuse them. I claim the majority, actually accept them currently. Interviews I have had with companies offering referral fees to us at Property Match confirm this.
If you truly agree that accepting referral fees is wrong, why won't you help by campaigning for your fellow agents to stop?
--
2. Your comments regarding valuation are noted. Agents employ varying methods of comparable valuation
ANS:
Sorry, there are no varying methods of comparable valuation. This suggests total confusion, the very thing I am canvassing for a discussion and indeed a seminar on!
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... and often check prices based upon average price per sq. ft.
ANS:
That is the American and European way of doing things and is not generally used here so again, there is more confusion here.
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Surveyors view a property after a sale price has been agreed – a position from which it easy to compare.
ANS:
I can't agree with this either. For surveyors to report a price which undermines an already established provisional price, is not at all easy, or simple as those doing it know they will be challenged on it. They will have to defend their position (and to some extent even their reputations) on it.
--
... Agents have to predict a price they may get.
ANS:
This is where we disagree most stongly.
I am saying this should be done mathematically, using simply applied processes using standardised comparable evidence, no predictions should therefore be necessary. No-one, not even agents, can 'predict' the future with any degree of reliability, can they??
--
We use a great deal of current and historical comparable data and have access to many sources of current information. In my experience, very few properties are down valued by surveyors which really evidences the fact that our figures are pretty accurate, particularly as we achieve an average of 96% of asking price.
ANS:
Even if your practice does achieve 96% of your asking prices, the majority of other practices do not. The ONS and Land Registry statistics clearly show this.
--
… Kindly also do not fall into the trap that we set asking prices. We advise as to what figure a property should achieve, usually a range, and the vendor will instruct us to perhaps try a little more.
ANS:
Actually I don't disagree with the general principle of this. What I am saying is that the methods generally employed to find the 'range' of prices to quote are highly substandard. So far all agents in this debate have been reluctant to discuss their methods, in any detail at all, and refuse to produce any examples. Don't you think that is pretty 'telling' in itself?
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… The market dictates from that point. We are not arguing intrinsic value, rather that which we can achieve.
ANS:
Yes I agree, but if the starting off range is essentially wrong (as I claim is the case), all sorts of problems then ensue.
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That is our job. We are not price fixers nor regulators – we try to do the best for our clients.
ANS:
Yes but as I have just said, if the starting off range is generally wrong (as I claim is the case), you are likely to be hurting your clients in terms of quality of advice on the most central issue of all, the 'asking price', and you will also be hurting their prospects of moving within a reasonable time scale, or at all in some cases - as is evidenced in the published and available market trends.
--
… If professional valuers have cause to disagree, they have the opportunity to do so – it seldom happens.
ANS:
I strongly disagree that this seldom happens. Whilst I was a mortgage valuer, I was reporting at lower than the price provisionally agreed in something like one in seven cases on average, and my colleagues were doing similarly. Other professional mortgage valuers I have spoken with have told me similar stories and given specific examples, so I categorically disagree.
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... We are not paid for our market valuations – we get paid for doing what we say we will.
ANS:
That is certainly open to debate, although you and many of the commenters on this blog, seem unwilling to debate it.
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3. I do not offer in house financial services and as such I have no conflict. We offer a mortgage calculator where customers can compare their rate and product and contact details of how they can pursue a more attractive deal should one be available, independently. Under regulatory rules, data protected by the Act cannot be disclosed to us.
ANS:
Yes, it has been necessary to enshrine this in law, but that is to try and stop the abuse. I wonder, for example, what your definition of 'independent' is?
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Nevertheless, we will seek confirmation from a broker that a buyer can proceed and ideally gain an idea of the percentage of mortgage required in order we can provide our clients with an informed offer.
ANS:
This is somewhat fraught. My problem with your explanation is, that having worked out the percentage of borrowings for each buyer, as the selling agent, you are in an unfair position; as you can then isolate the buyer that can increase their percentage and thus raise their bid. In doing so you can further raise the sale price. This is what some agents call 'negotiation'. I think it is using 'strong-arm' tactics. You are supposed to be the selling agents, not the buying ones too.
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... Further, I would counter by saying that I have had many surveyors commenting that a sale price may be a little high, but they will let it go as the buyer needs a low percentage mortgage. Is that impartial? I understand your thoughts on conflict, but these are very rare and increasingly so. Ask a broker – most buyers use their existing bank or lender.
ANS:
I can't comment on specific cases as I am not aware of the circumstances. It may however be OK for valuers to do this if it is within a reasonable margin of acceptability to do so. They have discretion here. The second point you make has been answered above.
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The days of the financial services involvement in agency is very out of date as any agent will tell you. Our focus is on the core business, not the peripheral issues.
ANS:
Well I don't wish to embrace you but this is misleading because there are many estate agents, currently trading, that have 'independent' financial advisors right under the same roof - in the same room as the sales staff even. There are others who have 'tame' financial advisers that they refer buyers to. Some, it is said, also obtain referral fees. This is not out of date information, this is currently happening.
My proposals for determining asking prices in line with current market expectations would help here by negating the advantages in trying to get buyers to borrow more than they ought to.
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Property Match (UK) details many failing of estate agents universally. It does not say “Some estate agents” – and it is inherently incorrect to claim “The problem is, estate agents have to exaggerate house prices in order to get instructed!”
ANS:
I am saying, in order for estate agents to compete, one with another, to win initial instructions they're forced to go higher on suggested asking (or guide) prices. Even several of the commenters here agree that this is happening so I can't understand why you do not.
Further to this, if sellers are dissatisfied with the prices they expect to get (even when, in fact, the market needs to fall), they instinctively tend to blame the agent in question, for not trying hard enough! This is unfair.
The only way the agent can escape such unfair criticism is for agents to go along with their clients and sanction unrealistically high prices, even in a downturn.
They do this because they cannot face undue criticism from their own clients, even if it is, as I say, unfounded.
It is THIS that needs addressing, not only for the benefit of the client getting arms-length, or good, advice but for to also improve the agent's trading prospects by levelling the playing field so that it is based on expertise, not pretence.
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… and then use their data to populate the vast majority of your content.
ANS:
The data which Property Match uses to provide its search results is just the data published online as freely available market data i.e. houses for sale; as well as houses that its own private clients have advertised.
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Likewise, your valuation page is a link to out of date data.
ANS:
Sorry no. This is the latest data, published by those responsive for doing that, The Land Registry primarily. It's only out of date on account of the time delay in publication but valuers have methods to adjust for this, using market trends and speaking to agents in the area.
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... These house price indexes do not necessarily reflect the market today.
ANS:
Statistical data is a guide. It may be used to check the approximate correctness (or otherwise) of a specific valuation but should never be used to calculate individual house valuations. It think there is more confusion here. The confusion needs addressing because price indexes are not part of the valuation process per se.
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I did a search on the road in which I live this morning. The last recorded completion was 8 months ago.
ANS:
Sorry I to have to disagree with you here too. Properties which have terms agreed and are subject to exchange of contracts, should definitely never be used as comparables for any valuation, ever.
The reason is they are not comparables until the deal completes. I'm surprised you are unaware of this. It is something thats obvious, really fundamental. I have to say this underlines, to me, that even the best estate agents practices are in need of a refresher on correct house valuation techniques.
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I believe the 3 properties currently under offer in an open market help to give a better indication of value that the historic figures of a house not open to inspection and which has since had a lot of money spent on it.
ANS:
For the above reasons, I simply cannot agree. There is however a need for those doing valuations or appraisals to know enough about the property that is used as a comparison, to know the differences between that and the subject property, the one being assessed.
I truly believe that there are serious errors creeping into the whole process of taking on houses for sale as is explained above and that urgent attention really is needed if another major house-price calamity in the UK is to be avoided.
Please see my following post for more on this.
Peter Hendry
Regards
EW
Peter Hendry " I will consider this and come back later if there are unresolved issues to discuss further."
There can be no unresolved issues - your points duly answered. If you dont agree - thats up to you - but as someone else said - its like arguing that the earth is flat.
You can claim black is white - but seriously, even you must accept EW knows what he is talking about and has provided a logical response and that you are at best mistaken.
Peter. Your arguments making you sound really detached from this world. I think Mr Walker has been very patient and polite in putting your flawed opinions firmly in their context as conspiracy theories. Time to move on.
How we calculate market appraisals is based upon what we believe we can get from what we have sold, demand for what is already available and simple, local, specialist experience. There is no simple mathematical formula which calculates aesthetics rather those which offer a control such a price per foot, rental yields etc.
Peter Hendry - destroyed yet again by EW's common sense, real world, erudite response.
Give it Peter. You are totally out-gunned.
EW.,
Thank you for your full response. I will consider this and come back later if there are unresolved issues to discuss further.
Peter,
Respectfully, our views appear poles apart and in such circumstances, it is unlikely one will convince the other. I sincerely believe your views are based upon stereotypes and supposition brought about my a very small minority of bad agents. Nevertheless, out of courtesy, I shall respond to your 3 points in order corresponding that of your post.
1. I do not justify such practices, far from it. I am on record as saying that it is wrong. I have been approached by a number of lawyers offering 'incentives' and I have always declined. The reason is that the lawyer is legally bound to disclose such payments to their client. I ask lawyers to tell their clients that they will offer a small discount as they were recommended by us – that gives a feel good factor and comes as a nice surprise rather than “How much money are they making out of us?” I have the same view of all service providers. In the scheme of things, the fee our clients pay is sufficient without accepting secret commissions.
2. Your comments regarding valuation are noted. Agents employ varying methods of comparable valuation and often check prices based upon average price per sq. ft. Surveyors view a property after a sale price has been agreed – a position from which it easy to compare. Agents have to predict a price they may get. We use a great deal of current and historical comparable data and have access to many sources of current information. In my experience, very few properties are down valued by surveyors which really evidences the fact that our figures are pretty accurate, particularly as we achieve an average of 96% of asking price. Kindly also do not fall into the trap that we set asking prices. We advise as to what figure a property should achieve, usually a range, and the vendor will instruct us to perhaps try a little more. The market dictates from that point. We are not arguing intrinsic value, rather that which we can achieve. That is our job. We are not price fixers nor regulators – we try to do the best for our clients. If professional valuers have cause to disagree, they have the opportunity to do so – it seldom happens. We are not paid for our market valuations – we get paid for doing what we say we will.
3. I do not offer in house financial services and as such I have no conflict. We offer a mortgage calculator where customers can compare their rate and product and contact details of how they can pursue a more attractive deal should one be available, independently. Under regulatory rules, data protected by the Act cannot be disclosed to us. Nevertheless, we will seek confirmation from a broker that a buyer can proceed and ideally gain an idea of the percentage of mortgage required in order we can provide our clients with an informed offer. Further, I would counter by saying that I have had many surveyors commenting that a sale price may be a little high, but they will let it go as the buyer needs a low percentage mortgage. Is that impartial? I understand your thoughts on conflict, but these are very rare and increasingly so. Ask a broker – most buyers use their existing bank or lender.
The days of the financial services involvement in agency is very out of date as any agent will tell you. Our focus is on the core business, not the peripheral issues.
Property Match (UK) details many failing of estate agents universally. It does not say “Some estate agents” – and it is inherently incorrect to claim “The problem is, estate agents have to exaggerate house prices in order to get instructed!” and then use their data to populate the vast majority of your content. Likewise, your valuation page is a link to out of date data. These house price indexes do not necessarily reflect the market today. I did a search on the road in which I live this morning. The last recorded completion was 8 months ago. I believe the 3 properties currently under offer in an open market help to give a better indication of value that the historic figures of a house not open to inspection and which has since had a lot of money spent on it.
Regards
EW
Well, if the commercial vendors I've just heard from are any indication then on-line only agents are no threat. The owners themselves have just refused to let me view two properties outside their office hours (9-5monday to friday) and the Agent wont either!
S*d you then, I'll find my mate something else! Part-time slackers.
Dear Eric Walker,
When you're back, I'd be very grateful for a response to my post on 2011-04-14 19:05:54.
Mr Walker. Please accept my apology for allowing YOUR superbly thought out and executed blogpost to be hijacked by Mr Hendry.
I directed him to this area to see how someone with, technically, a foot in only one camp CAN have a professional and balanced view of both methods of marketing. Unfortunately I misjudged his greed for notoriety, and we all see here the result of that misjudgement. For that, you have my unreserved apology.
Thankfully, those who read your blogpost can see for themselves who actually has their feet firmly on THIS planet - and more's to the point, who knows what is happening at the coalface, so as to speak.
Respectfully yours
PeeBee
Peter, You bring your website in and out of the discussion to suit your own twisted views. If that’s the case then fine.
Your website offers an alternative that doesn’t suffer from the failings of agents? How so Peter?
What exact alternative does it offer? The alternative being that they won’t sell? I assume the part you are referring to is the bit where you encourage people to ‘value’ themselves. Every where in the country agents are battling with vendors own misguided valuations. I reckon at least half of the potential clients I talk to are disappointed with the price I suggest. I then have to try and win their business off the back of disappointing them. Not easy, especially when the t**t around the corner will be only to pleased to tell them exactly what they want to hear. Having vendors decide there own marketing prices is a sure fire way of making the problem 10 times worse. Thousands of properties around the country sell only because an agent has successfully managed their vendors expectations. Your misguided argument would see an end to that.
When it comes to valuing or market appraisals, this is another thing that your ‘model’ conveniently ducks out of. If you truly believe that your ideas are ‘groundbreaking’ then get out and knock on some doors. If they are likely to be the turning point of estate agency then put your money where your mouth is and actually invest in what you believe in. Your current website is hardly high risk is it.
Referral Fees.
I also find it highly ironic that somebody who scrapes agents data rearranges it then list alongside paid google adds should have the front to even ask this question. Most agents refere because they get a good service. Agents do not risk £0000’s of fee’s for the sake of £100.
Your claim that you spend thousands of pounds developing Property match was a complete lie. I reckon your little crusade so far as cost you about £100. If that’s the case you should ask for your money back.
So when can we expect Hendry Estates?
Eric,
Thank you for your response.
Firstly I would like to correct any misapprehension you may harbour that I (we) maintain a blanket condemnation of agency practices on the Property Match(UK) web site. This is not the case. The site is there to set out some of the more important failings of estate agents, and offer the public an alternative service which, hopefully, does not suffer from any such failings.
If you feel my views are incorrect, why not challenge them, especially in the context of the article you have published here and the comments that we have each subsequently made?
1. In the first example which I've tabled, law practices regularly approach estate agents offering referral payments on the completion of any sale or purchase, usually amounting to £100 per completion. The buyer pays the solicitor's fee but will not know this unless informed, as you say hopefully by the law firm in question. My question though is, do you think it appropriate to take referral payments from law firms, EPC suppliers, and mortgage companies at all? If so, how and when is this justifiable please?
2. This question is of major importance. I am asking for detailed information about what sort of calculations agents do to back up their assessment a given asking price. In the alternative, I'm asking for confirmation and acceptance that, in fact, such asking prices are not derived from any written or mathematical methods at all? It's not difficult to answer this question but it is an important question.
3. I accept that agents acting for vendors need to ensure that a buyer is reasonably likely to be able to afford a house being considered and to provide the vendor with the full facts. However, isn't there a conflict of interest as soon as agents start offering buyers financial advice and assistance with obtaining a mortgage? They then become advisors to both the seller and the buyer of a property and may even be taking fees from both clients simultaneously. Do you think this is appropriate?
Secondly, can you understand that for an agent to have this information might easily amount to a conflict of interest?
You said. "Really, I am not trying to convince you - I simply feel that your views of agents are very out of date."
These issues are very definitely not out of date as they are going on right now so with respect, I would like to ask for your views please.
Having placed an interesting and topical article on EAT, I hope you don't get too bored to answer such important and relevant questions.
Have a good long weekend.
Peter
You kindly explained your original response and clarified the key points by making statement which reflect your opinion. I was pleased to see that the tone had softened from the blanket condemnation of agency practise as detailed on your website and instead replaced with 'Some / many agents".
There were no questions, rather statements and I am grateful that you clarified your stance.
Respectfully, there is no point in me challenging your views as many are based upon unfounded assumption that is fundamentally incorrect.
2 examples:
1. Many agents do receive commission for services provided to buyers, especially from lawyers but do not disclose this.
They should - if they don't the lawyer is obliged to do so regardless.
2. The lack of use of any reliable comparative valuations gives testimony to such a concern.
We have more up to date comparables than most - perhaps why we get so many visits from surveyors. In fact, usually, when a valuation is undertaken by a surveyor - we provide a package of such comps for their convenience.
"In my experience some agents do ascertain the financial status of each prospective buyer and then use this to try and get 'the best' price for the seller. " Please dont confuse this with ensuring affordability and providing the vendor with the full facts.
Really, I am not trying to convince you - I simply feel that your views of agents are very out of date.
Have a good weekend as I am out all day tomorrow and am starting to bore myself now!
EW
Yes, I do. That would be the e-mail you ignored remember?
Since you will not provide the info I requested I will air my theory with no basis. You do so sauce for the goose and all that...
I think the reason you appear to have such a bad view of Agents is because you worked in estate agency during the time when the bad reputation for lying, slcaking and general laziness and dishonesty was cast. That is why I feel you believe that we frequestly mislead both buyers and sellers and have no regard for the laws, because that is the only memory you have of working in the industry.
If you were in it at the moment, you would realise that due to the current savviness of both buyers and vendors, dishonest Agents get hung drawn and quartered fairly effectively when the buyer/seller beats them over the head whith the information they have witheld/lied about.
You have no frame of reference as to how we work at the moment, despite the examples that have been cited to you.
Eric Walker,
Back, if we may, to the topic in hand?
I wrote extensively to you this morning, in answer to your comments of yesterday. I have not had any further response from you. My post was:
Added by Peter Hendry on 2011-04-14 07:57:57
I would be interested in continuing this discussion(which is very much on-topic) here?
Dear CountryLass,
Giving you the answers you've requested would not explain so I'm refraining to. You had your chance quite a while ago, remember?
Other comments to me (gen): These are off-topic too and/or unhelpful, so no response here, sorry.
Peter - I just wanted to comment on your issue with valuation which you claim is exaggerated by Estate Agents. Hope EW doesnt mind
Your self help valuation link is simply a list of pages to various data bases showing completed sales. Less advise - more laissez faire
Sales prices are often determined 3-4 months before the most recent of those are recorded.
Your Explanation for valuation.
____________________________________________
"A: An estate agent's valuation is really a feeling, using their local knowledge, about how much such a property might sell for, during the next 3 months or so.
A surveyor's valuation, on the other hand, is a written calculation made by a trained surveyor who will research actual recent sales, and compare those with the property to be valued, adjusting for differences in location, size, style, condition, and changes in the market since the date that the other property was sold."
There is no difference other than when the valuation is undertaken. The surveyor calls into our office and asks for the comparables. An agents job is often harder. We have to predict what we may achieve, surveyors start with an agreed figure the agent has already achieved . We too research what has sold, what sales have been agreed, adjust for location, size, amenities etc. We often use price per square foot and sometimes yields as checks.
____________________________________________
It hard to go in cold as an agent - but its easy for you to say "That price seems a bit high" after the event when a buyer has been found and a price reference offered.
If surveyors are accurate, how come they never value higher than the sale price? Why - because they aren't really valuing in the true sense - i.e what price could be achieved - they are ensuring the property offers sufficient security.
I have regularly heard surveyors comment of the LTV ratio and saying - they only need 50% - so its fine.
Thats what in the heady days of the boom, surveyors only checked that a property existed safe in the knowledge next week, the price would be higher. Even over priced properties were safe as building societies were keen not to lose market share.
A surveyor will want to use CURRENT information - not that which is 3 months old.
Here is the key point. less than 5% of our prices achieved are disputed by a surveyor. Maybe we aren't so bad afterall.
I know you wont reply - "Wrong blog" "Off Topic" or "email me directly so no one can see my answer - or so I can ignore you" which is your code for "I cant offer a rational explanation"
In short - you are anti agent, but lack any substance or credibility.
I asked for an approximate age and dates that you were in estate agency. I'm trying to figure out why you have such a bad impression of us, and I have a clue but I need some more information...
Eric Walker,
Sorry, we are not an internet estate agent and we have no business discussing private sale by owner matters here.
If you would like to discuss such matters, you know how and where to table these.
CountryLass,
I'm not aware of any unanswered calls or emails received from you.
What you asked here is off topic, as I've already said.
If you still really do have a burning issue to put forward, by all means do so but please also understand that there is no obligation on me to answer silly or inappropriate questions, from anyone.
I HAVE tried to contact you directly, and I am still waiting for a response either to my questions (politely phrased) on your blog, or the e-mail I sent you some time ago.
Bit of a pot and kettle situation isn't it? Considering you accuse Agents of poor service including returning calls etc.....
Peter, I do not see how I have or indeed could 'break my own rules'. My request was entirely on topic.
The article was about internet agents. You provide this service, albeit populated with traditional agents instructions. Further, you suggested it be extended to direct sales as well - another box you suggest you duly tick.
As such, Property Match (UK) is an example of the type of business I am comparing traditional agency with, not with disrespect, but with interest.
Using IT Gurus stats, which are available from Alexa.com, I see where our site stands in terms of ranking is a relative small geographic area - London.
Bounce rate of only 20% - multipage views over many minutes.
I do not spend any money on SEO whatsoever. I undertake this task myself as I have a reasonable understanding of how this discipline works thanks to my SEO mentor who owns thinmartian.com.
If you do not wish to answer my question, that is of course your prerogative, however, I see little point in adjourning to another blog to answer a question about this one.
The IT world and particularly the social media faction is changing faster than you or I can comprehend. The sophistication of data mining is changing everything as we know it. I spent Tuesday evening discussing this very subject and was astonished.
Simply, an internet agent cannot compete with these changes, rather they must embrace them as we all must. Your site demonstrates that your raison d'etre cannot be a stand alone concept without the support of agents instructions gained from their maligned 'valuations', albeit unwittingly.
Again, I make the point, all good agents are internet agents. Many of the traditional London Chains have a far more successful and sophisticated internet presence than the majority of agents who claim to be solely internet agents, which in many cases I believe is a method by which they can justify existence with low overheads.
Tom made the point: "Lets be honest if you were an agent starting in todays world would your office be in the town (inaccessibly, no parking, expensive) or on a business centre or out of town on a main road or from your back bedroom"
A local business centre in Docklands near the olympic zone has had a greater turnover of 'virtual' estate agents than the rest of the areas surrounding it. Why? Because such agents can set up without any proper funding or backing - its cheap to start and easy to close and they don't always have to offer any long term business commitment that is required to fund an office and all that goes with it. I could set up and online agency with search function for £5k.
I wont press the point as to why people would chose to pay you rather than list free, however you are free to comment here and I duly relax the perceived rules allowing you to do so should you feel able.
Regards
EW
Nicely dodged Peter. I assume you realise that you are about to get your a**e handed back to you (yet again).
CLASS!! Mr Hendry - I'm starting to admire you!
You want to entice the MD of a MAJOR ESTATE AGENCY CHAIN to comment on YOUR BLOG - in order to PIGGYBACK OFF HIS NAME!
You'll no doubt write somewhere in the hidden script that he fully endorses your WOEFUL WEBSITE...
You are a crazy, misguided, attention-craving genius.
Dear Eric,
I'd love to answer this point but you've broken your own rules!
It would be quite a lengthy answer that's required so I would ask you to repost this on the Perter Hendry blog please, as it could generate substantial dialogue, none of which would be relevant to your article.
Alternatively, just email me if you'd prefer?
Poor PeeBee (more or less the only one still clattering on with more and more questions about things he thinks he knows the answers to, even when they're obvious),
I just wanted to inform you, April Fool's Day has gone by. Try another one. On second thoughts, no don't.
To apply a well-used 'anonymous' invective instead: "Mate - you're just asking me to then have a pop at ME, okay!"
If you want to do that, you know where to go, surely?
Wondering are we? (CLUE: The other blog).
Back to the point in hand.
Property Match (UK) is a site that is primarily populated with agents properties. I have no issue with that as the internet is about free flow of information, however find the damning view of agents and the suggestion not use them somewhat ironic.
From a customer experience, they click on a Property match UK [property, then get directed to Oodle, then to the agent. For every click, a significant percentage of your audience is lost.
The value of any listing site or portal is in the choice it offers a consumer - this value is provide by the agents it condemns.
Nevertheless, I wish Peter well with his commercial venture.
Tepilo is a slick site which has really been promoted well and works in conjunction with agents - in fact - I would go as far to say it sometimes HELPS us.
For example, a property in Dulwich on which we were appointed as sole agents was advertised by the vendor on Tepilo (and of course Property Match) - the former generated a couple of viewings and supported our view that the offer we obtained was a good one as the vendors own efforts had been fruitless (despite having uploaded OUR photos which also appeared on Peter's site).
One viewer from Tepilo called into our office having seen another board of ours in the same road - and offered on that property instead!
So, I again re-iterate my point. Our properties are marketed on the internet on massively successful pay for portals and scraper sites. How many independent 'on line' agents have sites with SEO to match.
Type into Google "House for sale SE22" and there is an interesting point. NOT ONE INTERNET agent makes page 1 of Google. The big portals do - we do. We aren't classed as internet agents. You may also be very surprised to know how much I spend on SEO.
So Peter, I respectfully ask you this. Why should a vendor pay you £35 when they can list on Tepilo for nothing and end up listed on your site anyway via your Oodle feed?
EW
@Crazy,
I'm quoting from the research done by Henry Prior, as reported in his earlier blog, which most people on here will have read.
@Wardy,
This is off-topic and I am NOT going to respond to any off-topic comments on here. Now please understandthis.
If you have anything to say to me about PM., you know where you can contact me.
Ditto, LegalEagle, AceofSpades, CountryLass etc, etc.
LAYDEES AND GENTLEMEN... allow me to introduce Mr Peter Hendry - the man who cannot lie straight in bed!
IF you wish to proceed to Page 25 of the Archives here on EAT, and read the story dated 12 November 2010 entitled "House huinters losing interest, says NAEA", then you will see that the first post is from our dear Mr Hendry (in his second incarnation, that of "Realising Reality"). The post states:
"Sorry, house prices depend upon a buyer's ability to buy, not a sellers dreamt-up asking price. Prices will have to correct to the buyer's levels of wealth (or lack of it)!"
No, Mr Hendry - sorry, but they don't. You said it yourself, on your OWN, WOEFUL WEBSITE. "The currently accepted way to get a clear idea of what “market value” might be, is to look at what 'similar properties' have actually sold for in the very recent past and then to adjust for property and market differences, between that house and yours.
This is what a professional valuers do."
Show me WHERE, IN THE RICS RED BOOK, 'open market value' is defined as:
"The sum yer average burger-flipper can afford to pay taking into account his outstanding student loan liability"!
Come on, big boy - I'm waiting!!
Actually Peter, Eric asked you a direct question about your site. Have the decency to answer him.
"Land registry figures indicate that overall, the difference between prices asked and prices obtained has been running at an average of about £60,000."
NO THEY DON'T.
IT IS NOT NIT-PICKING - YOU MADE IT UP.
An asking price set on 1st February may result in a sale agreed in say, 4 weeks. Completion may typically occur during May. The Land registry do not measure this FACT
@Crazy,
These figures are widely known. There's no point in nit-picking about the sources. Deal with the issues they present.
@Wardy,
Eric W. does not wish to stray off topic and nor do I. Please keep up.
If you want to cover that point, go to my blog page instead, or just write to me, OK.
Peter - kindly direct me to your data.
Land registry record completed house sales - where do they track asking prices
More to the point, 100% of properties listed by you peter do not sell through you. If you want to worry about something maybe that’s where you should start.
Eric Walker,
Well, what you say may be true but, present market conditions indicate that up to 60% of all houses marketed by estate agents never actually sell, for one reason or another. That is concerning.
Also, the Land registry figures indicate that overall, (and averages can be rather misleading I fully accept) The difference between prices asked and prices obtained has been running at an average of about £60,000.
Clearly therefore, negotiations below asking prices do occur in the current state of play in the market, and why not.
My concern however, is that if the drop becomes too great, something is wrong with asking prices and the way they are being arrived at.
Mr Hendry -
You wish to know.... as complaince is so important to you
Companies Act 2006 and Business Names Act 1985
Every UK company should list on its website:
its name;
its company registration number;
its place of registration; and
its registered office address.
Sole traders and partnerships who carry on a business in the UK under a business name (very roughly, not the names of the trader/partners) must also make certain website disclosures:
in the case of a sole trader, the individual’s name;
in the case of a partnership, the name of each member of the partnership;
in either case, in relation to each person named, an address in the UK at which service of any document relating in any way to the business will be effective.
Eric - This is one (of dozens) of the points that have been posed to Peter Hendry. He is an expert at dodging questions and ignoring key arguments against his points.
However, it is a GREAT question, why would you list agents properties on your private selling site, when you disagree so strongly with what they do?
One answer - it is to create the impression that he has lots of listings, to trick private sellers into using him (I doubt this works).
Anyway, we are drifting away from the topic of a good blog to fuel this clown's need for attention and ego.
Partly it is jeaslousy that he has now realised that good written pieces are well accepted by the EAT readers. Bad/ridiculous ones are not.
@Crazy "We are employed to get a vendor the best possible price."
I disagree you are employed by the vendor to help them to move and act in their best interests. I would recommend that a vendor take a lower offer if the timing is right and it means they can move into their dream house rather than holding out for a higher offer and risking their dream house being sold to someone else.
for the record.
Oodle is an American classified adds page that you can simply copy and paste the code into any old crappy landing page it would take a child five minutes to knock up. You can also list a property on oddle for free. Why you would pay Mr Hendry to do that for you I never know.
The man openly admits that this is nothing more than a ‘hobby’. Well that and trolling.
Stop doing it to yourself Peter. Its embarrassing.
Actually Peter - I wondered whether you would explain the following to me;
Your site says: "Don't get taken-in by estate agents' unrealistic market appraisals" (incidentally, we get an average of 96% of our unrealistic price)
But the real issue, is why you have ALL our instruction listed on your site?
The point is that we are, as I suggested, matching all that internet agents do - but we offer more as well.
Regards
EW
@IT Guru
No they do not know. The Agents marketing those properties are currently unaware for the most part!
If you challenge Howling Mad Hendry though, you will be told he simply takes all data freely loaded onto the internet. But he doesn't scrape. Apparently.
@Crazy,
This merits further (and deeper) discussion, if you might be interested in that. The question is, are you?
Peter
My mathematics is not incorrect - its a matter of public record on a number of sources. Your stats have worsened over the last 3 months. Your bounce rate has increased - this means fewer of the people finding your page actually proceed to enter it.
The time customers spend on the site has reduced by 40% as has the number of pages they visit.
Now for the big one. Have you actually got ANY fee paying customers? Your site records 553,220 listings which is a lot.
Everyone I looked at is a data feed from another site, Oodle. All were from agents/brokers. Do these sellers even know you are advertising their homes?
Peter Hendry
We are employed to get a vendor the best possible price.
Value = worth in monetary terms.
A surveyors cold valuation may not necessarily reflect an achievable market price.
I once value a house in a specific road in London based upon what had sold locally. When I returned to the office, my sales director pointed out that the road in question always achieved more than any of the others. It did. No logic - just local knowledge that it was THE road to be in.
The price paid was clearly in real terms the monetary worth. The value.
A piece of art valued by an auction house often exceeds a guide price - does that mean it was oversold or has its true worth been established?
Perhaps Peter, you would suggest we opt out of a free market and impose values upon vendors. "Sorry ma'am, I know we could get £300,000 becuase of what we have sold - but we think that's a bit high"
Finally, lest you forget, agents do NOT determine asking prices. Vendors do. Only yesterday, we valued a flat at £475,000 - the vendor said "Try £500,000 and see what happens - I am open to offer"
Yesterday also - "Hello sir - we have an offer for you of the asking price"
"That was quick - perhaps we should ask for more"
@Eric Walker (the man himself),
Thank you for answering my earlier post, much appreciated.
In my own defence, I believe I have an open mind but think quite a lot needs changing, if estate agents are to offer an acceptably good service to the public and hence achieve the removal of their currently tarnished reputations. Some of my suggestions may indeed be controversial, I freely admit it but I hope you won't be too put off by that.
I accept that your article was not about direct, or sale by owner web sites and that you do not wish to stray off topic. I just thought it might have been better balanced to have mentioned that private owner sales sites do now exist (ours certainly does anyway). I realise that it is my hobby-horse but I also, as of last night, understand that your article is mostly as previously published on your company web site and that is probably the reason why private-owner sales sites were omitted from the EAT article you submitted, I hope you'll forgive me for pointing out the matter, simply in order to explain my position.
My objective, in commenting in this column is to put forward ways to enhance the existing service that estate agents offer.
For the record it has nothing to do with promoting any sale by owner businesses, whether it's the one I work for or not. They are only likely to exist, in my opinion, for as long as estate agents cannot offer the enhancements to their services that I suggest are needed and should become mandatory across all practices.
Now, to try and explain my proposals briefly. If I am proved correct, estate agents are not currently trained to do residential property valuations using the same methods as qualified surveyors but they should be. I'm saying there is no reason why this could not easily be accomplished and there is no right of exclusivity to anyone doing good residential property valuations.
If agents had this ability, as part of the main toolkit of services they are able to offer, many asking price errors could be significantly reduced and the effect of that would be to help the housing market, as a whole, swiftly to get back to an average rate of flow, once again.
The advantages of being able to achieve this must be manifestly obvious.
If anyone is interested in furthering this idea, I'd be happy to correspond on this separately. I have no wish for this thread to deviate into discussing sale by owner issues but I do have a hope that those interested in this thread will wish to find ways to improve and enhance the services which estate agents currently offer their clients, the vendors of primarily residential property.
To continue with my response to your earlier comments back to me:
The point about rogues existing in all spheres of business is fully accepted.
Ditto, accompanied viewings. I certainly agree that all viewing ought to be accompanied ones.
Regarding my claim that agents value "buyers' pockets" rather than the houses they are being instructed to sell. I have battled long and hard on EAT blogs to get any details of how you, as agents, do valuations based on comparables. As a valuer myself, I am intrigued by the major differences in asking prices of similar houses on the market generally and the clearly different prices being obtained on sales by different agents too.
Perhaps you might be prepared to send me a copy of a valuation an agent has carried out using comparables? If you did this would be respected and not dismantled or criticised. I'm interested in the methodology employed and whether this is causing the disparities I am speaking of.
I'm afraid my current belief is that agents do not actually write such information down on paper because they do not actually do them in a way that I would recognise or advocate they should be done. I am wondering whether most agents, in fact, do any valuations at all.
If I am correct, I think this would be the reason why such massive discrepancies are occurring between different agents 'valuations' and indeed the discrepancies between agents' figures and those of mortgage surveyors that later value the same houses for loan requirements. Even if no account is taken of any defects in agents valuations, the valuation exercise would, in my opinion, still be of significant benefit to agents and to their clients, if done correctly and consistently across different firms. There is a lot in this which I am willing to expand upon if wished. Obviously the client's price-aspirations, is one such factor.
You obviously don't like what Mary P said then. We each have opinions. Mine are simply to do with finding good ways to improve the house-marketing processes.
I agree that seldom do buyers settle on a property that meets the criteria they first set. I think it should equally be acknowledged however, that this is something that buyers can achieve without necessarily having an agent in tow. They can find out what's on the market if they do there own research. There are plenty of times when buyers settle on properties on different agent's books or privately, therefore being able to accomplish this is not the sole province of the estate agent. I do of course accept that agents can potentially be most helpful in some cases though.
With regard to free services, I was actually referring to the free service agents offer their prospective selling clients by way of free market appraisals, to get them hooked in. I wasn't referring to the fact that you don't charge buyers to have access to sales information!
My reference to the snake was not intended to be cynical. I said,
"People beware: The all-inclusive service for buyers getting help from the selling agent is the real snake here."
I am merely trying to spotlight that estate agents take an awful lot of interest in how much money a buyer may have at their disposal, and not enough interest in how much the house they are selling ought to be worth in current market conditions. The lack of use of any reliable comparative valuations gives testimony to such a concern.
Also, many agents do receive commission for services provided to buyers, especially from lawyers and mortgage brokers but do not disclose this.
In my experience some agents do ascertain the financial status of each prospective buyer and then use this to try and get 'the best' price for the seller. This one needs to further explored in my view, again to see how agents' reputations may be restored rather than further tarnished.
My objective is to be as positive as possible whilst signalling the need for reform in certain methods used to market houses, especially after the recent massive re-adjustment in most people's overall levels of wealth. There is a pressing need to get things more 'right' in the marketplace at this time.
Here are some extracts of recent stats:
There were just 32,300 mortgages arranged with house buyers in February 2011 - 8% more than in January but still 12% down on the same month a year ago.
Recent surveys have shown that house prices have changed very little in the past six months.
The CML said that cash sales, now accounting for about 40% of all sales, are helping to prop up the market.
If you should wish to further discuss any of these points, I would welcome this.
@CharlieFarley,
"This point was NOT made."
The point was made, in my following paragraph. It basically says free things are pretty well worthless, in the World of business.
ID., Yes agents do get my phone number, although often it is a mobile. The same security may be done by anyone working through a web site too, of course. Whats more though, with a web site additional security can be put into place, ultimately allowing someone to find the exact locations of the computers used to make any contact.
@Crazy,
So your job is to get the best possible price is it. Actually people currently think and expect that you are going to 'value' their house, free. How do you reconcile that misunderstanding please?
@confused?,
I believe it is actually free because it's not a valuation and you're not actually giving anyone any service when offering it. What you're, in fact, doing is tempting people thinking of selling to let you have the business, without you making any bona-fide promises in return. Not always a great deal for a seller.
I think you need to find out a lot more about what surveyors do, and how they do it, before criticising them behind there backs.
@IT Guru
You may be technically good at obtaining information but I should point out that your interpretation of it needs much work. It is over-harsh, mathematically incorrect and from the viewpoint of our new business model, your interpretation of it is just wrong, sorry.
You should realise that all new web sites start off with stats very similar to ours, whilst they are in the process of launching a new online service. This does not make them, in any way, deficient. Even Rightmove would have started with stats broadly similar to ours!
Anyway the stats you have do not quite accord with the stats we have from Google and I, of course, understand why you should not be privy to any of these.
@Mike Wilson,
You are realistic, genuine and a breath of fresh air.
Thank you for posting.
The blog and responses are missing an important point. The industry is changing in the same way that the travel & recruitment industries have changed since the internet has come along. There are now far less high street travel agents and recruitment consultants due to the internet.
The point is the need for a high street office is fast diminishing (personally I find 30% of leads coming directly from the office hard to believe when the general belief is that 90% come from the internet). Lets face it the main reasons to have an office was so potential purchasers could come and get details of your properties (pre-internet) and to house staff (pre-internet, pre-outsourcing, pre-working from home et etc)
Lets be honest if you were an agent starting in todays world would your office be in the town (inaccessibly, no parking, expensive) or on a business centre or out of town on a main road or from your back bedroom with a laptop, virtual pa and every other outsourced service you can now get.
The internet only model - Paying a cheap upfront fee, giving access to portals but doing everything yourself is unlikely to achieve a sale and whilst it is right for some people is only ever likely to represent a very small portion of the market however a non high street office or no office at all model where a local expert service is offered in the same way a high street agent offers that now are likely to become far more prevalent and is potentially the future of estate agency.
A fair opinion expressed really well. Better than the stuffy boring and rambling blogs from certain others. Right or wrong? I dont know - but it was at least a good read. Funny lemon Jiff comment.
I will say that some are quick to criticise, but slow to offer any original thought of their own.
A refreshing, well written article - informative and entertaining. Some very valid points I may even pinch!!
Sadly, some people shoot from the hip when they clearly haven't read the whole thing making themselves look silly.
As for Mr Hendry........ He has gone quiet - I suspect a van appeared and two chaps in white coats took him to somewhere he will be safe.
Last week my wife asked me whether i was worried about the increasing number of on line agents. I said I wasnt and she gave the impression that I was burying my head in the sand or was a dinosaur and that our lifestyle may be affected.
I emailed her this article. Have just got home and mentioned it - she said "So, its ok to book centreparcs then"
I dont know whether to thank EW or not.
Thanks Pee Bee - I read the blog to which you directed me.
I really don't know what to say - which is not like me at all.
BTW, thank you PeeBee. I assumed that was what our mate peter was on about. Couldn’t of put in any better myself.
Mike, like I said before we reckon 30% of sales come as a direct result of having a high street office.
Put yourself in the position of a seller. Would you be keen to market to only 70% of the market because you hate glass offices?
I find the requirement for an office a bit odd. Even before the internet became central to property buying - when I was looking for a property I used to grab the local property paper, telephone all the agents and register. They'd send property details through - or phone if they were keen and on the ball - and I'd visit properties and make an offer on one. All without ever stepping foot in an estate agent's office.
As for 'marketing' and 'selling' and 'presenting' - surely this is all hokum? I've bought properties before now when the only details I have had comprised a black and white photocopy of the details - with one picture on.
People make a buying decision when they view the property. I couldn't care less about whether an agent has an office or not. The sort of agent I like (as a buyer) is the one who rings you up and says 'I've just taken this on and think it might suit you' and I know it may well suit me because he (or she) has taken the time to listen and extract from me what I really am looking for (rather than what I say I am looking for) and is on the ball enough to make sure I see suitable properties. The one who says 'three houses away extended last year with no planning issues so you should be able to to the same' etc. - I want an agent who is on the ball - I couldn't care less if he operates from under the stairs in his house. As long as he doesn't operate from an office that is full of chrome and glass and as long as he doesn't drive an awful green and yellow mini.
I dont normally post as I am not in the business BUT...
Ahhh - PropertyMatch - the worst website EVER!!
A terrible web ranking not even registering in the UK. A bounce rate of over 57%. Average visitor visits less than 2 pages and stays for only 1min 20 seconds.
EAT web rank - Top 160,000
Rightmove: Top 1,098
Property match Top 3,515,371
So, it his charge of £60 as he claims "We offer even better value for money than e.g. Rightmove"
No - because NO ONE WILL EVER SEE IT!!
Country Lass - no offence taken, my dearest. To be mentioned in the same sentence as Mr Walker's eminent name is an honour, not an insult - even if mine is at the bottom end of the scale to his... ;o)
ANYWAY - and apologies to Mr Walker for banging on about this, but I will pick up on his point about Mr Hendry's Mary Portas reference. Mr Walker coined the phrase "Sadly, your reference to Mary Portas reduces the credibility of the point you make in the way an iceberg hindered the Titanic."
Apart from the fact that Mr Walker was far too polite by even hinting that there was some initial credibility in Mr Hendry's point, I believe that this needs to be taken one step further, if I may.
Mr Hendry stated: "Based on this my suggestion is simply, give owners the necessary advice about how to do a house valuation. They would probably do a better job than the average estate agent currently does. Its obvious when you think about it. What a pity Mary Portas didn't have time to table this idea in her program about ways to improve estate agency."
THAT INFERS, Mr Hendry, that you have confirmed information that Ms Portas WAS going to table said idea. Please enlighten us as to HOW you came to be in possession of this information; and WHY Ms Portas felt that accompanied viewers demonstrating the features of a Grade 1* building to an audience was more relevant and pressing an issue than enlightening the poor public sitting at home that some Estate Agents might just overegg their initial marketing figures a tad?
The programme was, after all, an 'expose' of what was wrong with the Estate Agency business model, was it not?
With no offence itended to PeeBee/Wardy etc (including myself) I think that Eric's response is probably the most concise and bluntly honest one I have seen recently to the ignoramus still refusing to aswer my simple questions.
Still doubt it will get through the kevlar surrounding his head, but one can hope....
Out of his depth or in a different swimming pool on a different planet?
Personally - I thought it was of the best blogs I have read written by an agent not a detached commentator with an axe to grind. Its real life, hands on opinion.
It made me stop and think.
Peter Hendry is soooo out of his depth with this - I have read what Pee Bee amusingly calls his 'Fantasy Featurette' with total disbelief at the time.
Very decent of EW to offer a response - but really, its like trying to convince the Flat Earth mob that they are wrong.
The problem is that Hendry is as mad as a hatter whilst Walker is a well known agent with strong opinion based upon experience and results. I dont always agree with him, but his views are well argued and promote sensible debate.
Hendry snipes at others. Walker is constructive without managing to insult a whole industry with misguided and ill informed stereotypes and sweepings statement which are simply wrong.
Eric Walker: Unfortunately (for Mr Hendry...) you have encountered his strange world and will undoubtedly be held there by the immense gravity he creates.
Allow me to enlighten you somewhat on one of his MANY misguided points. When Mr Hendry rants on about buyers pockets dictating houseprices, he refers to one small excerpt from a post by 'wardy', in which he states "What buyers are prepared to spend is has EVERYTHING to do with house prices. I would not value a house at £100,000 when 10 buyers registered will pay £200,000 for that type." The full context of this being that 'wardy', responding to Hendry's ongoing psychotic episode wherein he demands ALL property prices by slashed back to those affordable by yer average burger flipper (no offence to burger flippers - they keep me fed and happy!), and in line with 'proper' valuation models - that HE JUST HAPPENS to offer coaching in, argues that a £200,000 house is a £200,000 house - and as long as there are buyers out there who can and will pay £200,000, he will NOT market the property at less! Mr Hendry, of course, reads what HE wants in to EVERYTHING that others say (but doesn't like it one bit when the tables are turned...), and that became his new rant - that wardy values based upon bank balance.
I know you're a busy man, but perhaps you ought to check out HIS 'blogpost', which is also featured on this site, in order to get a measure of the man and his 'ideas'. Earlier this morning, I actually posted on there a suggestion to Mr Hendry that he ought to read this feature, in order to see for himself how such a statement SHOULD be made. Seems like he followed my suggestion - however I should have anticipated the usual results, I am afraid...
(I call his blog the Fantasy Featurette - and, trust me, seeing IS believing!)
Peter Hendry - I welcome any opinions, but don't want to stray off topic.
I didn't mention direct web sales because it was not the subject of my article. When this becomes an issue, I will revisit the same.
I did not suggest that all High Street agents were ALWAYS better any more than I have challenged the fact that rogues exist in all spheres of business, including surveyors. Only a month ago the BBC reported "A chartered surveyor who rated a luxury home at more than three times its true value has been jailed for two years."
I agree that a viewing is indeed a viewing - the key is whether the applicant is accompanied. Its not about who is better placed to sell a property, it about listening and learning. Estate Agents do not SELL a property. In fact, if a buyer loves a house, you cant really stop them buying it - its about understanding. A good listener will prevail over a hard salesman as the buyer has several weeks to change their mind.
Your claim we value buyers pockets is unrecognisable. We provide a marketing price based upon experience and comparable evidence of what is on the market, and what has sold. The comparable method is used by most surveyors (rather than residual, investment etc) and we assist in providing evidence even for competitors sales. I agree most agents are not qualified to identify and allow for defects. Nevertheless, the key is that our job is get our clients the best price - not the buyers a bargain.
Every day we receive a myriad of enquiries from surveyors to assist with valuations. Likewise, very few of our properties are down valued and if they are, more often than not, we successfully fight our clients corner - that is what we should be doing for the benefit of our clients.
I recall the late 1980's - there werent many down valuations then - surveyors were very happy with any sale price.
Sadly, your reference to Mary Portas reduces the credibility of the point you make in the way an iceberg hindered the Titanic.
As regards my Horse/camel analogy, most experienced agents will agree that seldom do buyers settle on a property that meets the criteria they first set. Idealism and wish lists gives way to compromise. It is not to say that buyers do not know their own minds, more that they don't always know the market and what is available and the alternatives.
I did indeed refer to overheads, but made no reference to when fees were paid. Further, I maintain that service is king and a free service to buyers helps us earn a fee from our vendor and promotes repeat business in the future in the way a 2 for 1 offer in Tesco's leads to other purchases.
You cynically suggest that an all inclusive service is 'a snake'. We have moved on. I detailed "Local staff can point out places of interest, stations, schools, local tradesmen and much more." You seem to suggest we are trying to flog products and services. We do not have in house brokers and do not receive commissions from lawyers or anyone else - by choice. We have mortgage calculator on our website and people are free to enquire further should they wish - but to an independent company. Again - service.
I do not accept your sweeping claim that the agent will use personal financial data for their own purposes on the grounds it is NOT true.
I agree that regulation is needed, but that is not within our power. RICS is a regulator - but their website makes no mention of lettings whatsoever yet they purport to hold landlords interests dear to their hearts.
I wont debate the opinion I have offered, as we all have our respective views, however bizarre. Nevertheless, your response seems more about damning an industry than the simple point I was making.
Regards
EW
EW: "The truth is that ALL good estate agents are internet estate agents these days.......But we are NOT labelled as internet agents simply because it’s not the only place we do business."
A very profound statements. Some people seem to think that by RESTRICTING the way in which you market a property you spell the end of those who offer more!
Its borderline Insanity when you put it like that. Thanks
EW - Very accurate and an interesting read.
I think James read a bit too much into the instance he highlighted though - Well clarified!
It is very refreshing to read an in-touch blog on EAT.
Peter Hendry, take note!
People - this is the SAME Mr Hendry who, today, has Tw@ttered "One main reason why shops are experiencing the worst fall in sales since before 1996 is because estate agents do not value houses correctly."
Visit his own Blog site - see what he is banging on about. And his other revolutionary views on putting the wheels back on the market - such as making Agents liable to purchase properties they are unable to sell within three months. YES - that's right! - Mr Hendry who has ALSO masqueraded as PropertyMatch, Realising Reality and at least one other alias - but that was only to be the sole poster agreeing with him once...
Don't forget - be polite and respond on his blog page. He actively encourages comment by saying "This is where you get to say whatever you want to – about all property-related issues."
So - tell him what YOU think. He'll love it, really... Trust me - I USED TO BE an Estate Agent... ;o)
Excellent article and well put. Its certainly given me food for thought when challenged on this point - which I have been.
Shame people like Peter Hendry have hijacked it for his anti-agent crusade with a suggested self help approach to selling and renting by owners.
Free service is worth nothing? Stupid remark. The service is free to buyers, but helps the vendor who pays the agent. Its not something for nothing - its called service and is an investment when that buyer becomes a seller and remembers who helped them.
As for regulation - we all agree on that - but industry cant change the law. This article was about the simple fact which has just hit home - we ARE internet agents - but we also offer more. Great point
Mr Hendry "Instead they value the pockets of any buyers registering for that type of property! I'm not sure if that's even ethical, but that's what some agents have just told me they do. These agents appear not to even know the techniques for valuing houses, which is extremely concerning. "
Utter nonsense. Our job is to get the best possible price. I didnt see surveyors being particularly objective when their paymasters were battling for share of the mortgage market!
And lets be honest - surveyors come into our office sometimes having never even been to our area before looking for comparable evidence of properties WE have valued and sold. Surveyors opinions seem to be checked by ensuring that their arses are covered in the case of a claim on PI Insurance.
....and talking about chancers, here he is!
Unfortunatly I fear the internet argument is going to take a huge leap backwards. Good luck having Mr Hendry as spokesman.
Peter Hendry - I dont see the article as skewed at all. Its a good read and an opinion - we dont all have to agree and the fact we dont doesnt make anyone wrong - just different.
Your comments are good ones, but you say "The next idea you mention is about agents having high overheads but not charging landlords or sellers anything until a sale or letting is achieved. "
This point was NOT made.
Likewise, you are absolutely right about regulation, but many of us have been campaigning for this for years and the Govt wont act. nevertheless, I think the article is excellent in that it counters many of the myths that the internet age has created.
You say you are never asked for ID - but we always call back to confirm an appointment and accompany. Better than a person who has never been met being sent round unaccompanied.
LAYDEES AND GENTLEMEN... here's the "no sh!t, Sherlock" quote of the day, from no other than Mr Peter Hendry:
"As on the High Street, there are also rogues on the Internet who are primarily there to make money for themselves, without offering any real service to their clients or their customers."
So - you've finally EMBRACED, never mind realised, reality, Mr Hendry!
You will be a better man for it.
I really need to comment on the substance of your article, as it is rather skewed, in my opinion.
Firstly, you are correct in saying internet estate agents do not tend to threaten high street firms, but what about direct sales web sites? These are set to move into the housing market in a big way soon because of the reasons set out below. You don't even mention these!
What you have written about how High Street based agents are always better than online ones has been said before, but it is now wearing a bit thin.
As on the High Street, there are also rogues on the Internet who are primarily there to make money for themselves, without offering any real service to their clients or their customers.
You say homes need to be viewed to be appreciated. Yes, and that is the same whether the house has been found from an Internet advert, or from an estate agent on the High Street.
Any bone-fide Internet web site should disclose where it is operating from and who is managing the site. Any astute person should steer clear of the ones that don't. That's surely almost a given. If you can't contact the site and if it isn't even registered under the Data Protection Act, any sensible person should steer well clear.
You mention that "One of the key factors an agent has to address is valuation." You are certainly right about that.
The problem is, by challenging agents about how they value houses, I've discovered that they tend not to, at all. Instead they value the pockets of any buyers registering for that type of property! I'm not sure if that's even ethical, but that's what some agents have just told me they do. These agents appear not to even know the techniques for valuing houses, which is extremely concerning.
Based on this my suggestion is simply, give owners the necessary advice about how to do a house valuation. They would probably do a better job than the average estate agent currently does. Its obvious when you think about it. What a pity Mary Portas didn't have time to table this idea in her program about ways to improve estate agency.
As far as viewings are concerned, I have never known an estate agent to verify the identity of a prospective viewer, so how can you suggest there are security advantages there. Certainly I've never been asked for identification when I've made appointments to view houses through estate agents.
The argument that when using an estate agent, you might come in to buy a horse and leave with a camel, really does not work. People are perfectly capable of seeing what they like and deciding by comparing what else is available. That's what they do in shops you know!
Yes I agree that buying and renting is a people business, and the best people to discuss buying or renting anything with are the present owners.
Have you ever heard of the tier of command problem? It's where, as more people get involved in communicating important matters, more confusion is created. The most efficient way to find out exactly what any situation is, is to talk directly with those involved.
The next idea you mention is about agents having high overheads but not charging landlords or sellers anything until a sale or letting is achieved.
There is something of a flaw in this notion. Savvy individuals should notice it. It's the old adage, you get nothing for nothing. Put another way, anything that is offer for free, is not worth much, it's probably not actually worth anything. If it was, they would charge for it. They are business people, after all.
"They want service. They want assistance." Well yes, but friends and mentors can provide all of that and more, mostly in a more trusting and helpful way too.
People beware: The all-inclusive service for buyers getting help from the selling agent is the real snake here.
As soon as a buyer discloses their wealth and purchasing power to a selling agent the game is up. That agent will just use that to get the best deal they can for their client. Unfortunately, many buyers are simply unaware of this danger. It is one of the worst aspects of current-day estate agency and it is totally unregulated by Government or by agents' bodies. As I mentioned earlier, estate agents are already using this information to their advantage and against the very person who provides it - in all good faith too.
Finally, if you read the latter part of the article, and think more from a scrutineer's angle, there is almost no control over agents abusing their positions, whether they are online ones or not. I agree that this important issue needs addressing urgently.
It's time the way houses are currently traded was looked at rather closely, and suitable new safeguards were provided - not just by estate agents either!
I hope these comments are taken positively and responded to in a constructive and responsible way, as may befit a sector that prides itself in helping the public with information and advice which may benefit them, not just the agent giving it.
I won't be available to debate for a while so don't expect me to comment live, until later.
James
I take your point and its a fair one, harshly made! I apologise if you think it was a slur - it was not intended as such.
The deposit illustration was not intended to pillory Internet Agents, rather to point out that the client couldn't even visit their office to shout at them (I record that his exact words and intentions were not limited to shouting!)
I am well aware of the problems with agents with offices and perhaps know of more examples than most. This was the reason we formed SAFEagent - a consumer kitemark intended to simply demonstrate CMP and educate the consumer.
I agree with you that consumers should check credentials - but sadly they do not. They assume that TPO and OFT logo protects them - it doesn't. A redress scheme that imposes a fine cannot get your money back.
I welcome choice and competition. As I say, we had to raise our game because of On Line competition. My simple point was to dispel the myth that such competition was our nemesis, and rather illustrate why it is not.
Kind regards
EW
Eastender - I agree with that. Promoting good honest service is responsible, especially for an industry that has always had its fair share of vitriol.
I know EW well and have to say that he has some very interesting opinions which are intended to generate debate. Thats a good thing - it doesnt matter if you agree of not really, but its good that such issues are raised.
I get fed up with people telling me our days are numbered because of 'internet agents' who frankly rely on ONE means of marketing.
Its a fair article actually giving credit to internet agents and welcoming choice. I see what James is saying about the deposit issue, but Bushells is promoting the SAFE thing for this very reason which was born from High Street agent issues.
Rhino - you are right and I stand corrected. I admit to not reading that properly.
However I maintain that using the example of an Internet firm losing a landlord some money was a cheap shot and lacking in impartiality.
Like I mentioned I know of a major office chain that lost their landlords several hundred thousand. It was in the press.
Doesn't insinuate that all office agents are crooks. Just one man.
This so called internet agent- were they even real? Were they members of any national approved accreditations.
The article might well gave just said use a professional agent and check their credentials first.
Can you not see where I'm coming from?
Respectfully
James is correct about the High St agent / deposit thing. More interestingly, Bushells is one of the group trying to address this with the kitemark scheme - so in fairness to EW he is clearly aware of the problem.
That said - everyone is entitled to an opinion and I agree with much of the blog. Choice is important.
The truth of the matter is that many internet only firms will describe themselves as 'the new innovative way to sell property' All of us with a logo above the door know different. I am yet to see a single one that offers anything that we don’t (apart from a cheaper fee). In an audit last year we found that as much as 30% of our sales came directly from having a high street office. That’s a massive amount of buying power lost in an internet only world.
The only thing that makes an internet only model remotely tangible is the power of the portals and I’m afraid we are all to blame for that one.
One last thing, it would be unfair to tarnish all online only agents with the same brush. There are some real chancers out there who do the industry no good at all (I think we know who I’m getting at) and others that have invested heavily and are marketing property to high standards. They are worlds apart.
James -
"Why shouldn't there be a choice for consumers?"
Did you read the last line of the blog "There really are some excellent internet based agents out there who offer an alternative to high street agents. And that is the key word – alternative. Not replacement."
Alternative = choice (ask your dog to confirm this)
The blog agrees.... its not arguing about choice, just the opposite - its say that there should be one and rather explains that internet agents will coexist - not replace High Street agents.
AND - if you think people are getting 2% you are deluded.
Maybe if we saw these posts on a site read by the public you'd see very different responses.
Except we don't. Only agents read this site so of course you always staunchly defend your own
And why do you always get f@£&*g aggressive
Disbelief if you had the guts to call me that to my face I'd respect you. So you just sit in your estate agents office throwing abuse at strangers from behind your screen you big man.
Do you beat your girlfriend / wife as well?
Rhino - 'mate' - head in the clouds somewhat fellow. Not about the fees. I'd argue that for some sellers it's all about the fees. Typical agent talk.
Room for both is what I said. Read the post properly before spouting off.
Why shouldn't there be a choice for consumers?
Why should everybody have to pay nearly 2% just to sell a property? Because it's traditional? The way?
Wake up man and smell the coffee. We now live in an age where the Internet is creating choice for the public.
For every silly story I hear from an agent about Internet agents can't do this and can't do that properly I can spout one I've heard from somebody who thought their agent was a tit who never ever returned calls. But that's a moot point and unconnected to my initial response.
Buyers don't pay fees. Agreed. Sellers do and these are exactly who the choice of agents is aimed at. Buyers don't give a flying who is selling the property of it meets their criteria when on the portals they will want to see it. Anything else suggested is horse poo
E
james - you really are a plank. Why don't YOU write an article and we will judge that. Cant wait to see what your dog thinks.
Personally, I think it was a very objective and interesting article.
Excellent read - well done.
I think the story re the deposit is just a ridiculous example. Landlord should have checked 'this unreputable' agent before using, nonetheless a stupid example.
My guess is that the vast majority of idiot, bogus, cowboy agents actually have an office situated in some dark alleyway backstreet.
Check an agents reputability by reading their T&C's if they even have them and their professional accreditations.
I seem to remember very recently reading several articles in the press about agents with offices fall from grace and the spending of many hundreds of thousands of their landlords deposits.
Headline - all agents with offices are rogues
Get some perspective
And this article was written by the md of a reputable london agency!!!!
I could train my dog to write a better, more objective article
@James - yes, mate you are missing something. It doesnt matter who makes the claims, they are out there.
I agree - its a topic of conversation and has been for years. This blog article doesnt have a dig at internet agents - rather it simply distils down the simple fact that these agents use one method whilst the high street agents use this as part of their marketing and offer much, much more.
Well said - its not about the fees when all is said and done as the people who matter, the buyers, dont pay them.
Spot on article - We have had a number of vendors mentioning this - and yes the press have latched on and said the same. This puts it into perspective and I will certainly get my staff to read it.
Am I missing something? I can't recall any reputable internet agent claiming anything other than the fact they can sell somebody's property for a lot less. This is a fact, and provided the owner is happy doing their own viewings they offer a useful alternative.
I think you'll find it's the press that keep dramatizing the death of estate agents.
There's room for everyone just as there is amazon and waterstones. I use amazon , a friend wouldn't dream of it.
Yes accepted your house is valuable a book isn't, but what makes an naea registered online agents opinion less valuable than an naea agent who happens to have an office?
HEAR, HEAR! 'nuf said.