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Written by rosalind renshaw

We thought agents might be interested to see what one of your number has done to counter public belief – bolstered, it must be said, by no less than the Government – that DIY sales are the way to go.

Colin Shairp, of Drayton, near Portsmouth, wrote the following to communicate with local vendors. As it is directed at sellers in his own market-place, the figures he uses won’t be applicable to yours. However, we think the arguments will be:


DIY really isn’t the way to sell houses

It’s easy selling houses, or at least that’s what some organisations would have you believe.

Do it yourself and you can potentially save thousands of pounds on estate agents’ fees, they say.

I can’t dispute that, of course, because maybe you could. But I could show you how you could lose many thousands more because you sold your house at the wrong price.

One of the big problems home owners face is how to put a fair valuation on their property before they market it.

People who decide to sell their home themselves may get estate agents round to value it before showing them the door and using the information to market the house online through one of the new introducer sites the Government and some consumer bodies are keen to promote. Other owners may take to a website to see what their house is worth.

But there’s a risk in that latter course of action. Just recently, we sold a house in around a month from being instructed to completing the deal. It sold for £42,655 more than a popular website’s suggested valuation for that road.

It sold quickly because we were able to find the right buyer to suit the property. There’s always a risk that some sellers think you have undersold if the property moves quickly but the reverse is most likely true – it was pitched at the value that the market found to be right.

We also sold a house within one day of setting its value in September – or at least we thought we had. Suddenly, the chain fell apart in November, leaving a very disappointed seller.

But the next day, we found a new buyer and the deal has now completed – that’s just two days of marketing and two buyers found. In that case, it sold for £30,130 more than the online suggested value.

It shows that, contrary to popular mythology, estate agents are not all sharks, but this public misconception is as much the fault of agents as it is anyone else. I know some estate agents I would never deal with, but many of my industry colleagues are hard-working and professional.

The best bit of DIY you can get involved in when selling your house, apart from some timely cleaning and decorating, is researching among friends and neighbours to find which agents have served them well.

Then forget all that self-valuation nonsense, and get recommended agents to appraise your house and start work. Choose wisely, and it will pay dividends.

Colin Shairp
Proprietor, Town and Country Southern, Drayton

Comments

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    Careful evolution - that is considered heresy by some on here. :0)

    • 10 January 2013 16:49 PM
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    A range of interesting comments, but perhaps there is a bigger issue and threat to the survival of the traditional High Street EA – the lack of real and significant evolution within the industry.

    The 500,000 completions within the current UK market are shared amongst circa 10,500 agency offices equating to an average of 48 sales per office per annum. With a typical agency office costing (minimum) around £120K a year to run, allowing for the inclusion of the owner's salary and capital reinvestment, the average sale fee needs to be around £2,500 for the operation to simply break even. How many EA businesses are really losing money currently? Ask yourself the question. Granted the market size and sales numbers will eventually increase, but so will the number of agencies to take up the extra volume. Apart from web technology the traditional EA model has not changed for 75 years.

    The simple truth is that on the average High Street with say 15 agency offices, the consumer is paying for a huge, some may say unnecessary, duplication of costs and resources; 15 sets of premises, 15 sets of HLP, marketing campaigns, sales teams/staff, phone costs, car costs, Rightmove membership at £8,500 etc – the list goes on, all to support a minimal number of houses sold. Not an efficient business model. Online and DIY operations can simply scale the business and strip out some costs.

    Rather than ignore or shun additional income from the growing DIY and online markets, agents should add these income generating channels to their existing product offerings to capture those customers who insist on using these methods of sale. This could be done possibly through the ownership of regional joint venture vehicles. This could be the first real major opportunity to add new income streams to your business.

    Additionally, what would be the effects on unit sale costs from sharing overheads by working smarter, merging aspects of their operation, perhaps forming Joint Branding operations (no not franchising...!!!) and menu pricing for customers. The answer – costs would reduce, profits would rise, economies of scale would be achieved and the traditional EA business would increase income by attacking the markets of the low cost operator head on. Online and DIY are simply additions to your model not alternatives to it.

    The cost conscious, savvy consumer is now demanding better value for money which usually means lower costs, and this doesn't have to equate to lower profits or indeed regular and real recurring losses which is the case for at least a quarter of the EA community at present.

    You only need to look at Easyjet as an example of this evolution as opposed to a revolution of business modelling. For those of you that can recall, a company called Hoover thought that Mr. Dyson's new product would never gain market popularity and pose a threat to its core business. How wrong they were – Dyson now have 75% market share. The message is that products and business models continually evolve, EA businesses are no exception and they should plan accordingly.

    • 10 January 2013 15:20 PM
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    Nice advert

    I am sure every agent has at least a dozen success stories, but that doesnt give the whole picture does it.

    I wonder if Colin would be prepared to share the following statistics for his company

    1. Average time to completion for all properties marketed by him for the last twelve months

    2. Average actual completed price to Initial valuation provided by his company.

    This will show how realistic his valuations really are

    • 10 January 2013 14:47 PM
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    Real your neck in online agent, the story tells of selling a house for more than the valuation, the on line valuation and is not critical of your types. If you suggest any form of electronic valuation is accurate you will make yourself a laughing stock.

    "Online revolution" is a bit strong, the indusrty seems to view private sales as a bigger threat. I am not bothered by either.

    • 10 January 2013 13:46 PM
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    Trading standards need to be told about express agents. Claiming they sell 'most' of their property in 1 month when 'home.co.uk' quotes it more like 2.5 months.

    it's not propertymisdescriptions act people need to worry about its now onlineagency bullshit that is the new danger.

    amazing how govt. has no idea how to protect people when it matters.

    • 08 January 2013 23:57 PM
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    Richard - Your article seems focused on the supermarket model (which doesn' even existt).

    There is a demand for an intermediary service (embrace it) but there will also continue to be a demand for full traditional EA service.

    There are many real agents offering an alternative to the no sale no fee commision based approach. In fact many online agents have had many years experience in the EA industry...they are experienced negotiators chain builders etc this counters many of the points raised in your article.

    Good luck with the raising fees campaign. experienced vendors will want some tangible justification for a higher than average fee and I am sure competitors will be able to justify why they can do the same for less.

    • 08 January 2013 09:03 AM
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    you may wish to read my full overview of why private selling simply does not work and is not proven to do so anywhere - and why the advent of online and supermarket / DIY agency is actually an opportunity for most estate agents - not a threat here: http://www.estateagencyinsight.co.uk/services/articles/166/supermarket-estate-agencythreat-or-opportunity.php

    • 07 January 2013 16:38 PM
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    'People who decide to sell their home themselves may get estate agents round to value it before showing them the door and using the information to market the house online through one of the new introducer sites the Government and some consumer bodies are keen to promote. Other owners may take to a website to see what their house is worth'

    The article deals with the latter but ignores the former, it has conveniently forgotten to address it own point about those that use a EA valuation but not the EA.

    Every time this subject comes up we all trot out the same dog and pony show so lets try and put 'old yeller' down once and for all. The existence of Online agency is proof that our EA role in the market has shifted. We can no longer rely on platitudes as vendors now have a choice, they don't have to use us. Sure, there's good and bad in both and we borrow heavily from each other but Colin suggests that EA is the only real option and vendors aren't buying it. In todays agency, we need a 'USP' that justifies our fees and services and this ain't it. We're fighting a digital age of fast mobile broadband, e-documents and cloud computing. A world of convenience borne of Industrial evolution not revolution and there's no going back.

    Online agency is here and it's growing so we either need to find fresh new ways to win business or adjust our model to suit the climate.

    • 07 January 2013 16:17 PM
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    Just do a PX with David Wilson and you dont need any of them, just get the email from rightmove.

    • 07 January 2013 13:30 PM
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    If a vendor online takes a single online valuation as the maket price for their property they should not be taking the task of seeling their own property on.

    IO - Despite a growth in, sell your property DIY, there will always be a need for an EA service, too many people do not have either the ability, time or inclination for DIY.

    • 07 January 2013 11:48 AM
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    The message seems to be right and very well put to me, but it is far too long. I know that is rich coming from me and how long some of my posts are (you should see my average email!!).

    But the point here is in terms of unsolicited etc mail. How many people read even the shortest of things shoved through their door, usually as part of a wad at the same time?

    Those who so far criticise a bit are correct but of course have insider knowledge. Most vendors will not analyse to that degree, they don't have the experience to. Instead they will respond to achieved prices and above all speed of sale.

    • 07 January 2013 10:23 AM
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    Us agents need to be very aware that the online option will, unless we sort ourselves out pretty sharpish, take over.

    I have posted on this quite a bit over the last 2 years, always prophesying doom.

    Colin is absolutely right, but I fear that the general low opinion that most people have of estate agents will mean that the online option will be gaining ground day by day.

    I think we should all pull together to sort out our own business models.

    • 07 January 2013 09:51 AM
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    Are you joking? I know its only Monday morning but really - do you think that is news worthy?

    They sold a property at higher than one website valued the property and it was exactly at the price ' the market found to be right.'. What drivel.

    If this is the best defence of using estate agents then we may as well all pack up.

    • 07 January 2013 08:54 AM
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    Reading Colins' letter could give the impression... don't use an online valuation, they are rubbish. Do get local agents to give you a more accurate valuation for free.

    Buyers are easy to come by, we sold one in a month then found two buyers a day each. Makes it sound easy.

    • 07 January 2013 08:48 AM
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    Well done.

    We also sold a house that was recently valued by a 'well known' website. It was valued at £240,000. We sold it at £280,000.

    You didn't sell this house at £30,130 more than it was worth. You sold it at what it was worth in the current market. And in fact, why didn't you sell it the 2nd time round at £42,655 more than it was 'valued' at? Did it get down valued 1st time?

    This is a good attempt, but vendors will know that the 'valuations' done online are never very accurate. They will also know that the MARKET will take the property to the correct price and it is the market that decides what it is worth.

    It is then down to the negotiator within the estate agency to try and squeeze that last few thousand pounds out of the buyer. All online agents negotiate on behalf of the client, so we have that covered as well.

    My suggestion would be to offer better value for money. Then you might start getting clients coming back to the high street, rather than the online revolution continuing

    Good luck!

    • 07 January 2013 08:37 AM
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