Online estate agent Hatched has revamped its pricing structure to include VAT. It now shows charges from £540 including VAT.
Director Adam Day said he thought the inclusion of VAT in quoted fees is an industry first. He said he has come across no other agency doing it.
He said: “It has always been one of the things that I detest in estate agency: 1.5% plus VAT!
“It’s not 1.5% plus VAT, it’s really 1.8%. It makes a huge difference to the customer, somewhere between £600-£700 difference on the average sale perhaps.
“Why on earth do the agents feel the need to hide the true cost to the customer? It’s not a business to business transaction where the customer can claim the VAT back.
“Those same customers don’t go into Tesco, or buy a car, and the shop/dealer says ‘Oh, hang on a minute, we now have to add 20% VAT on top of that ticket price’!
“Until now, though, because all the other agents added VAT to their 1.5% or whatever fee, it was always a little bit of a scary leap to take as we would have been the first and the ones taking the risk.
“Similarly, all the other online agents have charges of £395 plus VAT, which really means that the customer is paying nearer to £500 than £400.
“The new pricing model and website reflects our approach as estate agents – 100% transparency.
“There’s no valid reason why VAT should be excluded from estate agent fees. It’s still a cost to our clients and should therefore be included in the price.”
Hatched was founded in 2005. Earlier this summer, the Advertising Standards Authority refused to uphold a complaint against it, ruling that its claim to offer a complete estate agency service at a fraction of the cost was accurate.
As from last week, when Hatched revamped its website, it has started quoting all-inclusive fees.
It offers three pricing models – 0% upfront with a 0.6% completion fee (with a minimum of £1,200 charged); £150 upfront with a completion fee of 0.3% (minimum of £600); and £270 upfront with a completion fee of £270.
Hatched raised its fees back in April: its cheapest deal before that was £199 plus VAT upfront, or £240 in total, and the same amount again on completion – but continued to quote the fee plus VAT separately.
Comments
Hmmm... something has niggled me since this story came out. Mr Day, in one of the responses (to me, funnily enough...) stated
"Back on to the subject of the VAT. I know for a fact that agents quote '1.5%+VAT' either over the phone or face-to-face. Sure, the VAT is worked out on the contract when the vendor signs, but that is NOT transparency. You should be quoting the vendor 1.8% over the phone or face-to-face. VAT doesn't need to be mentioned - as I said earlier, Tesco don't mention the VAT on their ticket prices..."
However that is NOT what TPO stipulates in the Agents' Code of Practice:
"3i Where the fee is a percentage you should clearly state whether VAT is chargeable and must express it as an actual amount plus VAT. The example amount should be based on the asking price. However, you must make it clear that, should the selling price be higher or lower than the asking price, your commission fee will be correspondingly higher or lower.
3j Where you charge a fixed fee you should state the actual amount payable including VAT in the contract and ensure that the seller understands that the fee will not vary whatever the sale price."
As said on the 80s American comedy, 'Soap' - "confused... you will be".
Oh - and just for the record, I quote prospective vendors my Fee INCLUDING AND EXCLUDING the dreaded VAT.
(and unfortunately, Mr Day, my average Fee ain't anywhere near five times yours...)
Hi once again, Brian.
The figures you have provided mean everything - and nothing.
Firstly, because you are not comparing two Agents' performance in the exact same period of time, they are of no relevance to each other. I am sure you understand that - but naturally the second set of figures look on paper (...screen...) to be massively more encouraging. But if I read your earlier posts correctly, I believe that the first Agent you are referring to was put on the case somewhere around the beginning of this year?
Views on RM need to convert to @r$es over your thresh. According to the figures you quote, your property achieved nearly five times more 'clicks' with your new (Online) Agent than the previous (National/High Street) Agent. Have you had nearly five times more viewing appointments booked as a result of this increased "activity"?
I fear that this thread is going to become forgotten, Brian. I have added it into my favorites as I would like to think you will visit and update.
I would, however, reiterate my earlier suggestion that you contact Ros Renshaw with a view to EAT running a series of updates.
One way or another, I wish you success. There are Agents out there who would benefit from reading what you have to say. We are to a great extent detached from the emotions that vendors and purchasers go through (which is just as well - otherwise we would only be good for one sale every seven years or so... !) - but some need to be reminded of the rollercoaster ride you are on, and how the part they play in oiling the wheels can make that ride so much smoother and less hairy.
At the end of the day, YOU (and your fellow vendors) are the important one here - you said it yourself.
And you are absolutely correct.
Sorry, I've never tried putting a table into a forum post before - hopefully this makes it a bit clearer, but if not, I apologise
Last agent
..........................................................property.........branch average
Appeared in search results..............1060................1671
Appeared in property details.................67.....................78
Conversion rates....................................6.3%...............4.7%
Extra detail views....................................33....................61
on-line agent
.............................................................property.........branch average
Appeared in search results...............2384...............726
Appeared in property details................302.................31
Conversion rates..................................12.7%.............4.3%
Extra detail views....................................360.................40
I couldn’t help myself taking another look at this thread, and whilst I am aware it is, as I said originally, internal industry navel gazing, there are a couple of things which have been said which, as a client, do not ring true.
The major issue is the question of “cheaper” on-line agents. In our case at least, our major concern is selling our home. A realistic fee would not be questioned, rather the value of the service provided. I hope I made it clear that the service provided by the traditional agents we chose and the on-line agent have been almost identical – I didn’t say acceptable or productive, neither have yet sold the house.
Given that the fee chargeable by the trads is x20 that of the on-line agent, in no way can I believe this offers value for money, and it is this that threatens the Trad business model.
Our house has now been on the market 5 days, and we have requested our first Rightmove Performance Report.
This is the comparison with the first week with our second agent.
Price is identical in each case.
Last agent on-line agent
property branch average property branch average
Appeared in search results 1060 1671 2384 726
Appeared in property details 67 78 302 31
Conversion rates 6.3% 4.7% 12.7% 4.3%
Extra detail views 33 61 360 40
You guys are the experts so I can’t explain the figures to you, all I know is that our conversion rate has doubled, even though the branch comparison for conversions is almost identical. It may be that the increase is down to the marketing we ourselves are generating, but as I said, we can afford to do that given the reduction in fee exposure.
The proof is obviously how many visits we generate, and finally the sale of the property and for what price, and this may take some time, but we are happy with the start.
Mr Day
I look forward to our first duel!
Believe it or not, I have no beef with you.
Allow me to repeat the last part of my first post on this story:
"I'm more than happy to go nose to nose with anyone - whether they be two doors down or in someone's makeshift study, or up in the 'cloud', as these online chappies like to think they are. I live by what I do, day in, day out. I don't start battles - but I don't cower away from them either - and I certainly don't lose any!
May the best company win, I say - but when their USP is "We are cheap/cheaper/cheapest" - then they are their own worst enemy.
If an Agent cannot even negotiate themselves a worthwhile fee, then what chance does that vendor stand when the Agent is negotiating on their behalf over a few thousand pounds with the prospective purchaser - which is the REAL difference between their SAVING and LOSING in their choice of representation."
And there, I rest my case.
Funny how this story is now THE most commented-on story this year...And the subject of 'Online Estate Agents' doesn't rile those on the high street? Seems it probably does actually. And we'll take that as a compliment, so thank you...
@PeeBee, like you say. Bring. It. On.
You ain't seen nothin' yet.
Watch out estate agents...we're coming to get you...
Hound (...and Brian...)
Is it interesting that no-one has picked up this particular hot potato?
Or is it simply that Estate Agents ALWAYS have competition coming at them from all directions - and Online competitors are no different from the others?
Mr Day and his counterparts are overkeen to state that as per a highly questionable ASA decision, they "...a COMPLETE estate agency service...".
Their USP is simply one based upon cheapness, is it not? That's been the SP of many a High-Street Agent for decades, and they don't have huge market share to show as a result - quite the reverse in most cases!
Only one thing to say to serious competition...
...BRING IT ON! ;o)
No-one risen yet to Brian's opening paragraph
'I didn’t post to cause any waves, it was more in sorrow at the head buried attitudes some of the posters have towards what could be a significant threat to their futures'
Brian
Thank you for your response. There is much there for digestion and further debate.
I, for one, would be very interested in tracking your future efforts. Unfortunately, once this 'story' drops off the front page, it will get lost in the ether and no-one will provide further comment.
Without being too specific, whereabouts are you in the country? You potentially have 20,000 Estate Agents reading this - ONE of them must be able to sell your home!
How's about you contact Rosalind Renshaw, the editorial Director of this site - she might be interested in running a blow-by-blow account of your experiences. Her email address is on the bottom of this page.
Whatever happens, good luck with your efforts.
'Pee Bee'
Thank you for your response – I didn’t post to cause any waves, it was more in sorrow at the head buried attitudes some of the posters have towards what could be a significant threat to their futures.
No, I am not a first time buyer, and I am certainly no spring chicken. This is, if my memory serves me right, the 9th house I have sold, both in the UK and abroad. I have used both agents and other ways to complete a sale, always successfully and usually within a reasonably short time.
We do expect this one to be different as it is, for the area, a top of the range rural house – so the target market is small and we are probably selling a lifestyle change rather than just a new house.
The first agent we commissioned was the guy we bought it through 15 years ago – expecting the same sort of effort he put our way to achieve that sale. Unfortunately, he has now made his pile and is simply milking his past reputation. Uploading to Rightmove was about it – the brochure was vanilla in the extreme, and once he had informed his “mailing list” that was it. Sit back and wait. He had no idea how to promote such a property outside of this and every question we had was answered with “Well it’s on Rightmove!”
One inspection, and apart from the fact that the house was too big, too expensive, too well finished , garden too small and in the wrong place, they loved the house!!!! Typical inspection to show the agent was doing something to shut us up.
Cancellation followed, and a new up-market country-wide agent appointed. Similar story, except the brochure cost us over £600, and we were advised to use local advertising which cost us another £400, with the same result – one viewing from someone (the wife) who was not the slightest bit interested.
It is very apparent that both are playing the numbers. Get enough houses on the books and some will sell despite their inactivity. Get the fees right and these will cover costs without having to think too much. The rest, usually those requiring a bit of lateral thinking – ours included, stay on the books, no effort put into them, and if they do sell then it’s a bonus. It is also apparent that they are reluctant to single out one house for special treatment as then “everyone would want the same”.
Cancellation again followed and we went live this week with the on-line agent. Refreshingly they are very frank about their efforts, so we are under no illusions as to what to expect - about the same as above but for about 5% of the cost. We view this as the cost to post on the Property portals, something we cannot achieve as private vendors.
We have appointed a marketing company to present the property to the targeted market profile, we employed the best architectural photographer we could find to take the images, a promotion company to produce the brochure, a social media marketing company to use Facebook et al for the advertising, a specific minisite designed & uploaded specifically for the house and Google adwords to bring in enquiries. Total cost so far around £4k.
Only time will tell if we are correct, two days is a bit short. The risk is that this is mostly up-front payment, so would not be suitable for all vendors, but it suits us. The upside is that if it is successful it will still be less than half the fees of the above agents, and there has been some significant effort put into the sale.
We now monitor the responses and then can modify any of the directions once we know the initial level of interest. The problem is that we have commenced the promotion late in the selling year, and will probably run into the winter before anything results, but everything is in place to recommence next spring if it is necessary.
We are, of course, basing all these comments on our personal experience during the efforts to sell our home, and our relationship with the agents we have chosen. I would hope that it is not a universal situation, & that there are agents out there who could achieve what we are asking, but we have been unable to find them despite a prolonged search, and my current conclusions are, that if you have a Barrett house, and the only distinction is what colour you paint the front door, then these agents can probably be an expensive route to a successful sale, but for anything out of the ordinary most don’t even have the desire, let alone the ability to achieve something positive for us.
'Brian'. Sorry I have not responded earlier - I have been waiting to see what fall-out occurred as a result of your post. I dare say that many who would have posted have not, as whatever we say in our defence could be met by "well of course you were going to say that...) - but what the H£ll - I don't shy away from anyting these days so in I jump feet first as always...
You are not incorrect in many respects in your post, however I would respectfully suggest that no-one is forgetting or ignoring their paying customers here - this is essentially a 'trade' site and we discuss/argue related matters to our business. In the 'battle' between one Agency or another, whether the agencies be in the cloud or on the High Street, it is always a willy-waving exercise that deals with the question of whether one can offer a better service than the other - which you must agree is only to the benefit of the fee-paying customer - so in many ways it IS a customer-centric argument.
For clarification, the importance of the vendor is of course paramount. It is, as far as you (homeowners) are concerned, the ONLY consideration - the Agent is simply the conduit to get you from where you are to where you want to be. Those Agents who truly understand that, and run their business in such a way, are the real successes. There are, unfortunately, a great many who simply pay lip service to it - but they can generally billshut with the best of them so the reality never comes out (except behind closed office doors).
From your post can I take it that so far NONE of the Agents have produced your desired result? You do not say whether the most recent (the Online Agency) has been successful - and unless I am mistaken you are looking at or even taking other means to boost your chance of success. I would be very interested in hearing more.
I am sorry that your experiences with Agents have not been good so far. Judging by your comments, I take it that you are not quite a spring chicken and I will further assume that you are not a first-time seller - so please tell me whether this most recent experience is different from previous encounters, and why you think that be the case.
This site is a means for Agents to learn. Posters like yourself are an excellent way for us to do just that - unless of course we consider ourselves to be already perfect - so thank you for joining the debate and giving us all something to think on.
'Brendan stock'
"I don't recall saying i was not happy with my time in agency!"
Hmmm - so then what you are NOW apparently saying is that when you "...worked with the wide boys and the dishonest people..." you were in fact quite happy about that - is that correct?
"I think your argument about sticking my opinions sums this up, there is a lack of intelligence in the business."
Okay - so you want me to open up the discussion. Your seven points of note. The ones that I shall now quickly (and hopefully painfully) extract from where I suggested you file them out of harm's way - but you clearly think that they were worth 'discussing' so lets go.
This should work well for you - after all, my lack of intelligence will make any argument I put forward sink like a stone. But I said in a previous post that I don't walk away from a challenge, so here goes nothing...
"The reputation gained over the years is deserved..." Utter, unadulterated MDT. For every wide-boy or girl out there (and I know a few myself), hundreds that more than redress the balance work tirelessly for their clients to provide the service you so malign. And what about the Onlines? Are you saying that THEIR reputation is better - and why, if that be the case?
Either substantiate your allegations or simply concede that they are equally relevant to all business models.
"the calibre of staff over the years is declining..." You really think so? From where I stand, the bad are still bad; the good are still brilliant (...and undervalued, I'll concede you that one...) - and the best would buy you with one hand and sell you with the other before you even had an inkling you'd been offered for sale.
Again - I would ask you how you intend to support this argument by proving that Online Agencies employ better staff; or pay better wages to them?
"for years agents on the high street have failed to do anything to improve either the reputation..."
Hmmm... so you clearly missed that, by doing what they do best day in: day out - actually selling their clients' properties for them - that the vast majority of Agents work tirelessly to 'improve' how people judge them. Pity, really, that you can't see the wood for your own trees!
Your fourth point is too ridiculous to even attempt to address. You can't even substantiate it yourself other than to say "ask any client that has used an agent and I am sure they will say the same even if they have done a good job..." - so we're at Point Nowhere with that one. Make your best valid argument and I am sure that you will be happily shot down in flames on that one also.
"Footfall has been dropping at a crazy rate for years. The high streets are in decline and lets face it everyone is going online to find a home now..." Funny, then, that still 99% of property is sold via THE HIGH STREET! And sorry to piddle on your little firework once more - but 'everyone' is NOT going online to find a home. Even the portals claim only mid-80% of property searches start with them - so why use a statement so clearly inaccurate as your 'argument'?
For your next point, you spew out "For too long High street agents have seen clients as cash cows, describing houses as units!!!" Firstly, I'm a High Street Agent and I have NEVER described clients' properties as "Units" - unless the client is a builder, as that is what THEY call their properties. None of the companies I have ever worked for have used that phrase either. Maybe you were just unlucky in all those 15 years.... maybe you just made some very bad choices over who to work for...
Secondly, are you seriously telling us that the Onlines talk amongst themselves about a client's property/home/whatever you feel comfortable describing it as today in any other manner than any other Estate Agent does? You are talking here about terminology. Gee whizz - a homeowner won't give a fuppeny tuck what their home is called by the Agent behind their closed doors!
Thirdly - "cash cows"? REALLY?? I am charging LESS now that I was 15 years ago to sell a property! I believe this is a similar situation in many areas of the country. I was making a great deal more money in my previous job in the property industry - and could easily double my current earnings by taking a sideways (...even backwards...) step - but Estate Agency and my current position beckoned me back... and here I am.
Money isn't my motivator.
Last point. "your large fees pay for nice offices and good cars..." You ain't ever been in my neck of the woods, pal. My ancient Volvo, and all the expense that goes with it, is paid for by ME, and I claim my fuel costs back for attending appointments. I got a puncture recently on a viewing (where the viewer had already bought the property...) which cost ME £120 for a new tyre. Bl00dy expensive viewing, considering I got 90p in fuel allowance... When we last rebranded, I believe that the signwriter went by the name of Michelangelo - so my flash office is looking a bit tarnished to say the least.
But we are selling more now than last year when there was no doubt a bit less flaky paint - so care to explain that one?
It couldn't be because we are doing what our fee-paying customers actually expect of us, could it...?
Come on - time to 'fess up and state in which sector of the property market you NOW work. I'll be majorly surprised if it's not for an Online Estate Agency. At least that way people can judge your comments for what they are.
If your USP is simply to slag off the competition - then how do you justify putting yourself above "...the wide boys and the dishonest people..." you take such pains to distance yourself from in your original post.
And be careful how you answer the above. The REALLY intelligent ones in the industry will no doubt be waiting to pounce on your every word...
"Pee Bee"
I don't recall saying i was not happy with my time in agency!
However over the years i have observed theses things, and have seen the value of the business provided by the high street get worse.
I think the post by a customer who I think is the most important person here is the most relevant and gives an opinion from a clients point of view not ours.
I love the job I love the customers and the homes we look after, i have simply seen the service provided by the high street get worse and the calibre of staff decline.
I think your argument about sticking my opinions sums this up, there is a lack of intelligence in the business.
I was pleased that there was little or no denial to any of the points i raised.
Forgive me for gatecrashing this internal navel contemplating but I came across this thread quite by accident. I am one of those people you all appear to be ignoring – a punter who is trying to sell his home, and an internet search mistakenly brought me to your door.
I think only one post actually admits that we exist so if you don’t mind wasting a few minutes I would like to tell you what the most important person in this story thinks.
Generally, Estate Agents are considered to be in the same category as Lawyers, Bankers and Politicians, not to be trusted under any conditions, and regrettably my recent experiences do nothing to dispel this fact.
Firstly, VAT – of the three agents we have been involved with this year, two quote fee +VAT, ie they are breaking the law. However, this is minor compared to the treatment clients receive generally.
We are not selling a house, we are having to move our home, and all that goes with it. It is, after marriage, the most stressful task most of us will ever do, and we do not do it often. Unfortunately this means that we usually do not have the experience we need to handle such a transaction and therefore we have to rely on agents to go through the ordeal.
Over the past year we have employed three agents in an attempt to sell our home, a local high street agent, a country-wide up-market agent and latterly, an on-line agent.
The two traditional agents each visited the house, valued it, measured it, photographed it etc, advised on how to get the best deal, etc., etc., etc. Produced a brochure (for which we were charged extra), each put it on Rightmove etc and then sat back and waited for the enquiries to come in. When they didn’t, and we asked what else we & they should do, it came down to “well, it’s on Rightmove”, lets advertise in the local paper, and finally, the dreaded “perhaps the price is too high!” Given they suggested the price originally I consider this to be the ultimate cop-out.
After 5 months of this inaction we took it off the market, rebranded and then relaunched it with an on-line agent.
They visited the house, valued it, measured it, photographed it etc, advised on how to get the best deal, etc., etc., etc put it on Rightmove etc and then sat back and waited for the enquiries to come in.
Notice something? No difference in the approach & service. However, for the two traditional agents we were in line to pay 1.5% +VAT, in the region of £11,000 for having our house on Rightmove, with the on-line agent it was around £600.
I would also say that as internet specialists, I actually feel more comfortable with the on-line boys knowing what they are doing.
It also means we have significantly more funds available to be flexible in our asking price, although in each case the asking price remained the same.
It also means we can afford real marketing help in presenting the house, rather than relying on the Rightmove templates used by most agents, and the bland descriptions in them.
It is fairly obvious to us that traditional agents are on the slippery slope, whether the High Street is degenerating or not, and once the market picks up again, and houses start to sell themselves they will find potential clients will take the less expensive route.
No amount of slagging off the on-line boys will make them go away, remember comments by the Comet MD concerning Amazon and the other on-line retailers, and who is still in business?
I wouldn’t claim that this route is for everyone, but the client profile is changing, there are enough people out there now who understand the internet and rely upon it for most of their lives, so for the under 40’s (h*ll, for the under 70’s in my case) selling their home through on-line sites will probably be no different.
Justifying traditional agent’s exorbitant fees for very little action is going to become very difficult.
Thank you for getting this far to those who did.
'Jubs Juberoonie'
Great argument. We'll all use it in future, huh?
Care to expand? I can think of many High Street Agencies that don't rate anywhere near as good as 'toilet' in my opinion. And I'm sure that some if not most of the Online Agencies are far, far better at what they do than your opinion would suggest.
You can't beat a good, old fashioned High Street agent! Online agents are toilet
Steve from Leicester - at last back to the point of all of this.
The point being that a company has made a great fuss out of doing what it should be doing and complying with the advertising regulations.
Poor of Estate Agent Today to run such a 'thin' press release to be fair but been amusing for the past day or so.
Going back to the original point I thought all "business to consumer" transactions had to quote a VAT inclusive price, but for "business to business" transactions it was OK to quote a VAT exclusive figure.
So if the price to the consumer is £200 plus VAT its OK to say "£240", or "£240 including VAT", or "£200 plus VAT making a total of £240", but its not OK to simply say "£200 plus VAT".
Selling someone's home is clearly "business to consumer", so these are the rules as I understand them.
In lettings it's a bit different. We always simply tell tenants a price which is VAT inclusive (we just say "The application fee is £150"). However we can make a case to say our dealings with landlords are "business to business" (after all, in HMRC's eyes our landlords are running a business whether they like it or not). For that reason we always quote landlords our fees "plus VAT".
I think this is great Hatched! Keep it up!
What a load of horse shit
Sounds reasonable to me - it's only usually in places like the United States where consumer prices are quoted without including State and City tax.
I think that including VAT is a great idea. It's just a shame that it seems some of the agents who read this site are sore losers because they didn't come up with the good ideas.
Come on guys, you're old news now - let some of these new agencies do their thing, and if their success upsets you that much, it's probably time to change your business model to one that is a little more future proof.
Perhaps the most comical thing about this thread of comments is the lack of cogent reasoned debate which has instead been replaced by a constant stream of poo slinging - show's the mentality and caliber of a cross section of those responsible for the direction of the industry.
Thank God for Agents like Hatched.co.uk who challenge the status quo!
As 'Brendan Stock' so eloquently put it somewhere earlier on - looks like most of their competition are monkeys! Put them in a room full of typewriters and see if they can come out with a business plan that works.
"Which then clearly states:
H*****d Conveyancing is a trading style of ..."
Oh yeah - that's as clear as a whistle to yer average vendor... not!
Just goes to prove that here are varying degrees of transparency, I would suggest.
'Brendan stock'
If you were so unhappy with your lot; if you felt so aggrieved with the state of our profession for a period of fifteen years, WHY THE H£LL didn't you do the decent thing and leave an awful lot earlier?
No. Instead, you join a discussion thread on the Online vs High Street Estate Agency models, and try to screw the latter.
Nicely hidden agenda... not.
As thinly disguised as your apparent efforts to 'improve' the profession were thinly spread.
Take your seven-point "Discuss??" MDT - and firmly insert it where the sun won't fade it.
And do it with a smile.
@lmao
Which then clearly states:
Hatched Conveyancing is a trading style of Premier Property Lawyers Ltd. Regulated by the Council for Licensed Conveyancers.
For the record, this chap who yes I will admit looks a bit like me is not me, alright?
I have read the comments on hear with amusement.
Having worked on the high street for over 15 years (thankfully not working on the high street anymore) none of these comments come as any surprise to me. It is interesting that none of the high street agents have mentioned customers!! Just defending their business.
Its amazing that in 2013 so many high street agents are amazed and seem confused that online business is growing! I think this sums up Estate agency on the high street.
Estate agency on the high street is declining for several reasons:
1) The reputation gained over the years is deserved, I have worked with the wide boys and the dishonest people, indeed in my last role for a major company the Director as part of his Market appraisal training was actually telling his staff to over price a house just to get it on the market then hammer the clients to reduce the price!! how is this good customer service? how is this ethically correct.
2) the calibre of staff over the years is declining, with the poor salaries paid to negotiators, I think someone quoted "you pay peanuts you get monkeys" well the same principle applies to the high street negotiator. lets be honest you get the odd Gem out of luck but in reality the calibre of staff is shocking.
3) for years agents on the high street have failed to do anything to improve either the reputation or their business model as times have changed. A lack of investment in Staff training, and IT means you are way behind the times, I am sure many would still be passing out paper details photocopied from a low grade printer if you could get away with it.
4) The fees charged by High street agents do not offer value for money, ask any client that has used an agent and I am sure they will say the same even if they have done a good job
5) Footfall has been dropping at a crazy rate for years. The high streets are in decline and lets face it everyone is going online to find a home now, the only people who don't realise that are the high street agents.it amazes me that in 2013 the only people who cant understand the growth of online busniess' are estate agents!! what planet are you on?
6) For too long High street agents have seen clients as cash cows, describing houses as units!!! this is a home you are selling for a human being and over the years I have seen that basic principle forgotten.
7) your large fees pay for nice offices and good cars, but if you look at those offices closely (and I have been unfortunate to work in a few of them) they look great from the front but out the back and on the desks the IT is outdated and the back office is a disgrace!! The term "fur coat and no knickers" springs to mind as does the quote that "you cannot polish a turd however you can roll it in glitter". and that I am afraid sums up High street agency in my humble opinion.
it hasn't changed for many years, it hasn't improved, staff are not better trained, IT is way behind any other industry and the high street agents despite this expect to charge the same fees or even higher than many years ago.
Please keep this attitude going because you are playing into the hands of the online business with your client demographic changing in years to come you will not have the older clients that are too scared to try online business, the younger generation will realise that they don't need your substandard service and shiny suits to sell their homes.
Discuss!!!
'' We haven't claimed anywhere that we own hatchedconveyancing''
from the hatched website:
''At Hatched, we have our very own conveyancing department offering a great range of services,''
This is just to easy.
@Silly Sarah - I have already looked into this. A bit pricey to be honest. But feel free. It will probably be a good investment for the future, however, we already have a name, so we don't need it
@R - Thanks for visiting our website
@Well that's Transparent - How is it not transparent? It is clear on the website that we charge for extras. If customers don't want the extra's, then they pay £270 up front and then £270 on completion (both including VAT of course!)
@lmao - We haven't claimed anywhere that we own hatchedconveyancing - yes, it is a 'trading style' of PPL. Proud of that as well.
@LOL - Didn't get cross at all ;-) Did my post suggest I did - haha!
"Adam started to grow frustrated with the fees that were being charged to owners for what was really a very simple job; get the property on Rightmove, and wait for the phone to ring."
Ahahahahahahah - proper like for like estate agency then!
http://www.onlineestateagents.co.uk is for sale, shall we all buy it?
Don't forget to add that we charge for extras, like a For Sale Board and Rightmove Premium Display.
So what you are saying now is that instead of earning £270 you only earn £225 but you make it up by charging for extras.
@ ace of spades, envy probably isn't the word I would use for running poor old adam inside out with his daft inconsistencies, by all accounts the bloke is offering a fullAgency service but only charging 80% of what traditional agents do. In a bid to keep fees down his model doesn't incentivise selling anything as most of his money (70%) comes from failing to sell. He started all this by blahing on about being transparent but it seems that £270 is £270 when he is boasting but it is £225 when he is trying to appear much cheapness. I doubt anyone is envious of a bloke who has to work as hard as the rest of us but deliberately rewards himself a massive pay cut.
'As per many other agents, we also earn money on financial services and conveyancing'
Is that the conveyancing that you claim are your own firm but is actually premier property lawyers white labeled?
Transparency in the industry? You are a funny guy!
Now your last post was very funny Adam, you did get cross didn't you!
OK, I am using the fee example of £270 as this is on our site and I wasn't sure that your tiny brains would understand it if I said £225. And then if I had said £225+VAT, then you would have all jumped on me about the VAT being added, bla, bla, bla.
Right, I am definitely stopping this now. I have appointments to get to at 4pm and then 5pm. One 4 bed, which will take me 48 minutes to get round, and one 3 bed, which will take me 36 minutes to get round
They have already had 3 agents out each - all wasting their time valuing it and not winning the business.
Goodbye until the next time!
I am sure you said somewhere you earned £270 on every property. I don't know if I can cope with this smoke and mirrors. One minute you claim to be earning the £45 VAT on the £ 225 fee, next you are saying it isn't included in your earnings figures, make your mind up.
@AceOfSpades
I am wondering the same thing - I have work to do...
But if they keep throwing them at me, I have to keep batting them back unfortunately.
I think I might give up now though. There is nothing more to say on the subject really. Other than to say that the post at the bottom who suggested everyone 'shuts up' or 'do not post' about 'Hatched' and 'Online Estate Agents' because it just gives us coverage and SEO (don't know where he gets the SEO bit from - that would only be true if there was a link to our site, which there isn't), looks quite funny now.
Especially considering it is now one of the most commented-on stories for a number of months, if not the entire year. Apart from the story back in January which had around 80 odd posts on...What was that about again...?
Oh yeah - It was about us...
How on earth is this thread still going? The message Adam is sending about VAT is absolutely correct. Its just silly to quote prices to any consumer exc vat.
When there is a vat change, you have months of notice from the govt. so that argument is flawed.
He has a market, he knows it very well. This comment thread is littered with envy.
Everyone furiously working away on their calculators...hahaha!
Don't forget to add that we charge for extras, like a For Sale Board and Rightmove Premium Display.
And don't forget to add in the fact we do lettings. 5 of the 17 people we employ deal specifically with lettings...
No, of course we don't include the VAT in the turnover. That would be silly.
Not all of our clients choose the cheapest option (where you pay £270 up front and then £270 on completion). We have 2 other options which are more expensive for the customer, but quite a few people go for those options (around a third of people choose the other options) - it's up to them which option they want - we don't mind either way. Have a look at the website for the 3 options.
As per many other agents, we also earn money on financial services and conveyancing. And because we sell around 100 or so properties a month, we don't do too badly in that department.
I have explained this many times over on various posts over the years, but you lot just will not get it, so I wonder why I bother?
I have never lied or exaggerated what we have taken on, sold, or banked. And I never will.
YTD about £570k which includes VAT comes out just boasting shy of £1,000,000.
You are including VAT in your turnover aren't you Adam?
1300 @ £225 (your bit after the vat) with 800 completions another 800 x £225. That is what you said you charge isn't it or do you count the VAT as turnover?
"In your reply to Ampersat you provided performance figures to week 36 for 17 staff.
You have turned over about £472,500."
How do you come to the figure that we have turned over £472k?? I have not disclosed this figure anywhere.
Remember, we get paid up front, on completion. If you really want to know, we are now turning over just shy of £1m per year.
"A multiple agency office with 17 staff would have sold bewteen 600 and 1200 properties in the same time."
What is your point here? That is what we have done - we have sold 800 properties in that time. I don't get what you are saying to that??
"To consider yourself a sucessful business man with a radical new idea you need to have taken on 4056 properties and sold £2496 to come anywhere near the earnings of your traditional competitor."
This one baffles me more than any of the other statements. Of course we are not going to 'come anywhere near the earnings of a your traditional competitor'. WE COST ABOUT 80% LESS, so how on earth would you expect us to get anywhere near that figure??! We are not here to earn the same as a high street agent - that would be impossible with our fees. But our profit margins are OK because our systems are better and we are a much more streamlined company than someone like yourself, I dare say. The profit is what matters. Not the 'earnings'.
Your usp? You are cheap, there is nothing new in that!"
Erm, yes. Our USP is our fees, and the fact that our customers get the same result going with us as they would by going with you. Which is to sell their house.
12 mins per bedroom, means a 3 bed house, takes around 36 minutes - that's the whole house, all the questions we ask the owner and then we're out the door.
A 4 bedroom house takes around 48 minutes to measure up, speak to the owner about what they are looking for and to explain what happens next, etc.
It's called efficiency.
When you go out (And certainly what I used to do), you spend at least an hour explaining your service and fees (quoting 1.75+VAT) and trying to win the business and measuring up to show that I could compare the size of their house with the one round the corner, along with all the prep work you do with a best price guide (or similar)
I would then spend another hour writing up a nice letter with a brochure and more reasons why they should use us and chasing the potential vendor over the course of a number of weeks.
I would then spend another hour when I won the instruction on measuring up (again) and taking nice photos and explaining what happened next. That, is called, inefficiency
In your reply to Ampersat you provided performance figures to week 36 for 17 staff.
You have turned over about £472,500. A multiple agency office with 17 staff would have sold bewteen 600 and 1200 properties in the same time. To consider yourself a sucessful business man with a radical new idea you need to have taken on 4056 properties and sold £2496 to come anywhere near the earnings of your traditional competitor.
Your usp? You are cheap, there is nothing new in that!
Mr Day "I think you have tied yourself a bit in knots here PeeBee and making yourself look a little silly. Please stop..."
Nope - I think that YOU have tied yourself in knots - and I am simply pulling at the floppy ends for you.
Please stop. Hah! Are you related to a certain Mr Realising Reality, Mr Day? He asks people to stop/go away/stop piddling on his firework the second his inconsistencies are pointed out as well...
... speaking of which, as far as 'b******s' (shame for the lack of decorum on a public site...) goes - at least mine is CONSISTENT b******s and doesn't do a 180 every post...
...Sir. I would have assumed that was more fitting than Madam. I was simply being polite.
"Would you also like to know the bottle of wine I opened or the quality of the olive oil I used for my spaghetti bolognese last night?? Jesus..."
Oh, I'm sorry - but may I remind that it was YOU that started the car/holiday shenanigans in the first place. And to clarify before you ask, I drive an ancient Volvo (mine) and haven't had a holiday for 2 years.
And I want to now where you get your fuel for a quid a litre plus VAT! At that price, I can only assume you must be sticking RED diesel in that Signum...
...now THAT IS scandalous! ;o)
12 Minutes to measure a room!
Now I get the saying "you pay peanuts, you get monkeys"
If it takes you 12 minutes to measure a room I can see why you now quote inclusive of VAT it must have taken hours for you to work out 20%.
Here.."yes, I am suggesting that the whole legal profession us up to no good, by not including the VAT in their fees!"
I just dont get why an online agent gets so much interest?
Traditional agency was doomed it was said 10 years back, have they gone from the High Street? No of course not. All models have a place, property sellers can choose.
Look at the travel indusrty, far esier to do on line and not see a real person. Are there High Street travel agents? yep of course there are, they still exist in virtually every town, and for one I still prefer to buy a big holiday from them, but thats called personal chioce!
Where have I suggested that any industry is corrupt?
I am saying that I believe that VAT should be included in ALL fees that are quoted whether that be in writing, over the phone, or face-to-face.
As someone has already pointed out, 3.18 of the CAP code says you MUST include the VAT in any printed or online media - why should that not be the case for over the phone or face-to-face?
In essence, I would argue that CAP probably agrees with yours truly anyway!
So all Estate Agents are bent and so are all solicitors, interest accusation Adam!
How many conplaints have there been to TPOS Ltd Ombudsman Services Ltd or the Law Society regarding Estate Agents and Solicitors duping hapless vendors by the underhand scheme of deception? Surely you have some sort of evidence of wrongdoing otherwise a fear of litigation would suggest you don't just naively procalim the whole Property prefession as corrupt.
@Quagmire
It takes us 12 minutes per bedroom to measure up a house. The £60k house was a 3 bed. The £1m was a 5 bed. 24mins difference.
We cut the waffle and don't spend any 'extra' time on marketing bumpf, for example. All my guys work to this forumale. And all of our properties are marketed in exactly the same way - lots of photos, a floorplan, a set of details written up and adverts on RM & Z. So, no, there is no difference in marketing. There may be slight differences in preparation. But again, the house at £60k had a few more viewings, so the time taken was around the same on both.
I mentioned that we got £40k more because otherwise someone would have jumped on the comment that we sold it within a week, saying that we sold it too cheaply (remember, I can't win on here).
And no, I don't think another agent would have got a higher figure. I think she would have actually got less.
Let me explain:
She had 3 valuations. Two at £950k and one at £975k. I suggested we put it on at £985k and we sold it for £40k more.
First offer we got was for the asking price on the Tuesday (day after we took it on). The other viewings weren't due to take place until the weekend. We advised the client to wait until those viewings took place, even though she initially wanted to just accept the offer because she was concerned that said buyer would go and buy something else. She took our advice (fortunately).
I wonder whether a high street agent would have just taken her instructions and accepted the offer of £985k so they could get their £15k or so on their pipeline??
Because we are not blinded by the potential exhorbitant fee that we could earn (because we earn £270 on all props), we give the owner the right advice. And this is why we ended up with a higher price. We are not motivated by the massive fee we get in selling the house, and neither are any of my staff - no one is paid commission on selling houses. Of course, we want to sell it - the completion fee is our profit margin, and much of our business is word of mouth. So if we didn't sell houses, we wouldn't be here. But we don't HAVE to, or NEED to sell it to stay in business, meaning our advice is not in any way slanted to our benefit.
Not that I am saying agents might advise clients to accept an offer more because they have a big fee riding on it, rather than it being the right thing for the owner to do...I'd never do that, would I?
@ Adam Day
Hope you saw my analogy about buying a car, and you'll find out what it costs before you get in too deep!
Congratulations to you and your wife :)
Adam if you equate effort as viewings (in your case phone calls) then yes, you can argue that they are the same in terms of effort. However the marketing and the money spent on that marketing for these two properties, I would expect to be very different as well as time spent preparing them.
I like that you added that you got £40k over another valuation for the £1m'er. I'll give you the benefit of the doubt and just ask what you did to achieve that extra £40k?
Do you think that you of achieved more had the property been exposed to a local market rather than just a national one?
@Hound
"and it could be argued that an up front fee makes for totally committed vendors."
You've got it Hound. Our fall through rate due to vendors pulling out is just 5%. When I worked on the high street, it was more like 15%
Our vendors HAVE to move. They are not chancing their arm or just fancy moving if they get the right price and find the right house to move too. We only get motivated vendors. More wastage removed...
@Quagmire
OK, you got me. Not all houses take the same effort to sell. But my point was that a £1m house doesn't necessarily take more effort to sell than a £30k house.
We just sold a £1m house within a week with 5 viewings (2 people fighting over it and it went for £40k over the highest valuation that the lady had received).
That has taken no more work than selling a house at £60k in Rotherham which had 7 viewings over the course of 3 weeks and a total of 3 offers (2 of which were too low)
You can't deny that that is the same amount of work done on both properties to achieve what we are trying to achieve (which is to sell the property)...?
anything better than a ford focus?
@Ampersat
No company keeps the VAT - car dealer, supermarkets, high street shops! Why should professional services be any different. They should quote a fee which includes the VAT and the quote should have NO reference to the VAT unless a receipt is required.
When I drive to an appointment, I get a receipt for the fuel I have used. I ask for a VAT RECEIPT because I can claim that back. When I drive to a family friends house, I get a card receipt, but I DO NOT ask for a VAT receipt. I don't need one. I can't claim the VAT back on that journey. The fuel at the pump doesn't say £1 plus VAT per litre - that would just be scandalous.
It is just underhand and non transparent of professional services to not include the VAT. So, yes, I am suggesting that the whole legal profession us up to no good, by not including the VAT in their fees!
We have been going for 7 years. We have 17 staff. We have 6 offices. We are currently interviewing for another member of staff to open our 7th office. How do you think we are not making money if we keep investing in growing? I'm not sure you can make an assumption of our figures or the money we make. We re-invest all of it into the business, which is why we are growing at a rate that none of you lot are growing at!
The concept is, that everyone pays to market their home with us. And, of course, some people don't sell, but then the ones that do, don't get punished with a ridiculous 2% fee because you are covering the costs of the ones who haven't. Everyone has paid their share...Nothing wrong with that and probably the reason why we are again 40% up on last year. (We have grown at 40% per year since 2010)
And as to your concern of whether we are growing or contracting, etc, just so you know (and for those of you who read my posts regularly, it won't come as a surprise, for me to reveal our figures as I am the only one that ever does), we have taken on over 1300 properties to date in 2013 (just shy of the whole of last years' total already) and agreed sales just shy of 800 (already more than the whole of last year).
So, we have a third of the year to go - looks like we'll be around 35%-40% up again on last year. I would say we are growing quite nicely, so thank you for your concern...
There is some very selective reading going on here....and while I'm at it
''That is the exact point of our business - all houses take the same amount of effort to sell'' Adam Day hatched.co.uk
Nice one Adam...... give me strength.
PeeBee
I just got back from a self catering holiday with my wife and 1 year old daughter in Tenerife - got back yesterday at 2am. If you follow me on Twitter, you'd know that ;-) @hatched_co_uk
I don't own a car. I drive a pool car (a Vauxhall Signum) and walk to work. I might get a car at the end of September, but it will not be a company car, it will be mine and I will be buying it because my wife is pregnant again, so we need something bigger than her Corsa - so perhaps a Ford Focus. (Cue people saying that our business doesn't make enough profit because I 'can't afford' anything better than a Focus - I can't win!)
Would you also like to know the bottle of wine I opened or the quality of the olive oil I used for my spaghetti bolognese last night?? Jesus...
You stated - "Oh, dear - you only achieved 95.38% of asking price in that example, Mr Day - kinda bu99ers up your average, huh?"
How on earth do you work this one out?? The AVERAGE is the sum of a set of figures, divided by the number of figures. So, of course, if we have an AVERAGE of 97%, then there will be some that I sell at 95% and some that I sell at 100%!!
Next point...Erm, of course it 's fair that someone selling a £30k property pays the same as someone selling a £1m property. That is the exact point of our business - all houses take the same amount of effort to sell, so everyone gets charged the same.
I think you have tied yourself a bit in knots here PeeBee and making yourself look a little silly. Please stop...
And what is all this 'Sir' bollocks?!
Hound
I can assure you that I am far from hot under he collar with regard to Online Agency models. Positively freezing, in fact. What I DO get agitated about (as most that read here - and one or two culprits will attest...) is those that claim they are making he Estate Agency a better place when in fact they are simply trying to 'spoil' the efforts of others in order to feather their own nests.
I have no doubt hat 'Online' Agencies can and do provide a service that suits some. Whether it be simply cost saving; whether it be that they believe that, when it all comes down to it we ARE all the same; whether it be that they simply believe that the ONLY way to 'sell' a property is on t'internet, then these people will go down that route.
It is up to the High Street Agent to justify their existence. Always has been the case; always will. And GOOD Agents do this far better in my opinion than the Online Agents ever can - because they have offices that people can visit; they offer appraisal appointments when they spend considerable amounts of time (at least they SHOULD, in my opinion - as the decision is of massive importance to the property owner and shouldn't therefore be limited to a quick run around and hurried spiel before shooting off to the next...) to advise the prospective vendor - oh, the list is endless so I'll stop there. Don't want to give the Onlines the secrets to the success of generations of High Street Agents before the birth of the internet, do we? ;o)
I would agree with you, Hound, that he High Street is a changing place. WE instigated the last big change, I remind you - when every greengrocers and corner sweetie shop was turned into an Estate Agents somewhere around three property booms ago! Where this next 'change' will lead - nobody knows - but as sure as eggs is eggs if we believe it will lead to doom, then doom it will lead to.
My points to Mr Day were factual, and not raised in anger or retaliation - simply wanting him to realise that what we say is what we are judged upon.
And if we say something different every time we open our mouths (or press 'submit') - then our credibility only heads in one direction.
Happy days ahead, Hound - I'm looking forward to what the future brings!
@ Ampersat
'Whoever it was asking why some agents are bothered about online competition; they are not bothered by the competition, unprofitable fee deals last a blink of the eye and go as quickly as they arrive. The thing that gets folk all whizzed up is this sort of spin which erroneously purports that Agents are keeping the VAT for themselves is some sinister and unscrupulous deceit of the public. Spin and lies are unpalatable in any area of life.'
That would be me then! I beg to differ, agents are obviously bothered by online competition, the evidence is here to see! And I cannot see anywhere that Mr Day is suggesting that Agents are keeping the VAT for themselves.
Let's look at transparency in a different way, certainly in my part of the world, unless there is a specific promotion, fees are not publicly advertised. Most of us have been trained or learned over a period of years that fees are the last thing you discuss, and only then when sat on the vendors settee and they have already bought into your services. Now, would any of you walk into a car showroom, find information on, and enter into negotiation about a specific car, and get to the point where you are about to sign on the dotted line without knowing the price. Surely not, price would be the first thing you would ask.
How much impact would it have on business if fees were publicly advertised? Huge for some agents I suspect!
Your understanding of the Hatched business model is obviously somewhat limited, as you state that they need to make 1.8% on each completion to survive, clearly they do not, or they would have disappeared a long time ago! Remember they do not have the same overheads as the High Street model, an up front fee contributes to the marketing for every property, and so the costs of abortive works are covered, and it could be argued that an up front fee makes for totally committed vendors.
Ampersat has managed to put this far more eloquently than I was managing.
To the issue of the high street. You know Hound, not all high streets are dying on their arses, its true many chain stores are leaving but what I see are small independent firms turning up and doing a far better job and bringing locals into the town that wouldn't otherwise be there. Coffee shops, deli's old traditional sweet shops etc. People that would have popped to the express sainsburys are now spending hours in the town centre and most of them directly outside my shop with our logo firmly plastered across the top of it.
The rent on the shop premises needs to gain me just 6 completions a year to pay for itself and I assure you its gets us much more than that.
I may have my head in the sand but (thanks to the shop) its lovely white Cuban sand washed down with a mojito
Given that Agents don't get to keep the VAT, chargeable on all professional fees, it seems wholly transparent for an Agent to describe to a potential Vendor who is earning what; 1.5% to me, VAT at the rate appropriate on the invoicing date to the government.
It is because the VAT rate can and does change, albeit not very often, that the normal and accepted practice of quoting professional fee plus VAT is common to both Estate Agents, Solicitor and conveyancers. An intelligent business brain would understand that contracting to meet a cost governed by a third party is simply stupid. Perhaps Mr Day is suggesting the whole legal profession is up to no good too.
With a price rise in April and this PR designed to win more business it is my assessment that Mr Day is not making as much money from his business as he would like, it is not as successful nor profitable as his hype suggests. A quick companies house search, if anyone can be bothered, will reveal just how well Hatched is fairing; growing or contracting.
If Mr Day is running an Estate Agency business which offers a service on a par with a traditional Agency his fixed and running costs will be about 1.25% of each completion allowing for normal and reasonable profit of profit of 0.25%, This is a figure established over several generations of boom and bust cycles in the housing market. It is a figure which is deemed fair and reasonable by many millions of vendors over those generations.
Mr Day is promoting a disturbance sell in the market by inventing a fictional 'Non-transparency'. This disturbance sell is designed to win him more instruction. Given the fact that Mr Day running a traditional Agency (but with a twist) he still needs to average about 1.8% inc vat per completion in order to make a fair and reasonable profit for his firm. If the upshot is that he can afford to charge 0.30% including VAT he his effectively admitting that it does not matter whether he sells a vendor's home or not his running costs and profit are covered by the properties he lists but doesn't sell. Once undressed that isn’t a USP likely to win many instructions and certainly not enough to provide the volume to be long term sustainable.
Whoever it was asking why some agents are bothered about online competition; they are not bothered by the competition, unprofitable fee deals last a blink of the eye and go as quickly as they arrive. The thing that gets folk all whizzed up is this sort of spin which erroneously purports that Agents are keeping the VAT for themselves is some sinister and unscrupulous deceit of the public. Spin and lies are unpalatable in any area of life.
@PeeBee
You are absolutely correct, there was indeed no vitriol towards me in your post, but if you look again at what I said, you will see that what I am driving at is that every time an online agent is mentioned on this forum, everyone gets hot under the collar, as indeed you've done yourself in your posts on this thread.
I know my own answer to my question, but was intrigued to hear other opinions.
Perhaps I'll phrase the question in a different way.
As online agents are so bad at what they do, and are no threat to the conventional model, why do so many get so hot under the collar at a mere mention, why not just let them get on with it?
For my part, I do believe that things are changing, although I've worked with it for 30 years,(including my own successful 2 office practice) I have long held the view that the conventional model is a nonsense from a business perspective, and sooner or later, the public will realise those that actually sell pay the costs of those that don't, where would that leave the 2% fee then? As I've said below, the high street is rapidly changing, and I am seriously thinking that agency needs to modernise as many other businesses have done, and change from the existing conventional model.
'Graham C'
"To be fair, I always quote 1.75% + VAT at a valuation?
Is that wrong then?"
Yes, it is. VERY wrong.
Put your fee UP, Sir - you are clearly giving your services away!
Two percent is the way forward, mon ami ;o)
Let me know how you get on!
'Hound' - thank you for your response. There was, Sir (I presume...) little or no vitriol in my post towards you, unless you are one of the type of Agents I was referring to. Your post, on the other hand, gave no real indication as to your standing hence my opening statement. Now you have laid out your cards more openly, I almost see where you are coming from - but surely with your experience YOU are in the best position to answer your own question?
As requested, I gave you my views on 'the competition' - which in my opinion are relevant whether it be Online or whatever. Do you disagree with them - and if so, why?
For information, my version of being 'away from the coalface' did me a power of good. I was never more than one hair's-breadth away - and gave me the chance to view from without. Sometimes you simply cannot see the wood for the trees, Hound. I would thoroughly recommend a sideward step as a way to clear the view and point out the way forward.
Trust me - I'm an Estate Agent ;o)
Mr Day. Yes - we have "already been here". You talk about "the average Agent" when quoting percentage of sale price to asking price. Firstly, may I remind you that YOUR company is lumped in there somewhere, when these 'averages' are being formulated - so maybe you shouldn't crow too loudly; secondly (and by far the most relevant point) from memory many of your online counterparts (to be fair, I can't find reference on your website to this effect...) claim that as their fees are so much less than the High Street agents, then vendors using their service can 'undercut' the competition on asking prices. Therefore, achieved prices may well be lower - invalidating your entire argument! Personally, I'd rather get 95% of £100k than 97% of £97500 - wouldn't you?
Interestingly, in your blog, you quote an amusing story relating to one of your Director's relatives - "...she put it on with us, (obviously), for £195k, which we told her we thought was too high, but nevertheless, we would be happy to try it... So anyway... we dropped the price to £189,995, and sold it for £186k within a week."
Oh, dear - you only achieved 95.38% of asking price in that example, Mr Day - kinda bu99ers up your average, huh? (unless of course you're gonna claim the latter asking price as the one to judge your efforts on - in which case we High Street chappies should simply 'drop' the asking price on the day of sale to a smidgeon above the accepted figure and all 'claim' we achieve 99.99% - which would bu99er you up again!) ;o)
Now to your other points. Like the phrase "I've never slung mud PeeBee...". Pity you can't live up to it. In the same post you state "Another misleading and underhand tactic employed by high street estate agents." And that's NOT mud-slinging? Or what about your website: "If you get a high street agent to value the property, they will typically take an hour waffling on about how brilliant they are and how deserving they are of their exorbitant fee (please don’t believe a word of it)... and then listen to another load of waffle about what car they drive and what five star holiday they will be going on this year."
Tell me, Sir - what car do YOU drive; and where will YOU holiday this year?
I'm sure YOUR vendors will like to know what Day family luxuries THEY are contributing to...
You state "...some poor bugger out there is paying 1.75%+VAT for a service that is the same as the person who is paying 1.25%+VAT - now that, is not fair."
Hmmm... and in YOUR opinion it IS fair that someone selling a thirty grand property pays the same with YOUR Agency for the SAME service as someone flogging a million-pound mansionette?
Interesting view, Sir. You mock double standards, yet you adopt them yourself. I don't even think you would have realised it if I hadn't shoved them up in front of your nose.
You should learn to look at your own armour, before opening fire at what's out there waiting to shoot back at you with your own bullets.
And in that respect, the pleasure, Sir, is all mine.
@ PeeBee
'You say a lot of 'we' - which I take to mean that you are a High-Street Agent - yet your post gives me no other indication that you are actually what you are inferring yourself to be.'
Well worked out! I am indeed a high street agent, (for close to 30 years) but I did enjoy your 'barbed' comment above to suggest that I might not be what I am 'inferring' to be, so I may well be better placed to comment than someone who has 'been away from the coalface' for some time!
The simple fact is, there is less and less footfall on the high street, and not just agency. The 'bid 4' office in our town are exploring ways of making the town centre more of a social hub, rather than a centre of business. The major retailers have already moved out to the new shopping centre. If this is happening in a prosperous market town in East Anglia, then it is fair, I think, to assume that it is happening elsewhere! It is abundantly clear that more and more business (yes, Agency included!) is being conducted remotely, and people do not wander round agents in the same way. Anyone who denies this fact, Quagmire, for instance, has their head firmly buried in the sand and is out of touch with what is happening on High Streets the length and breadth of the country!
I was not suggesting that agents are 'quaking in their seats' but merely posing the question as to why, whenever an online estate agent is mentioned here, there is more interest than any other topic, (as I am sure you cannot have failed to notice) and most of the comments vitriolic!
Now I'm not pretending to be an expert in psychology, but that would suggest to me that there is at least, shall we say 'concern' if not 'Quaking in their seats'
So, I'm still waiting for an answer to the question, if the High Street model is so good, why are we so 'concerned' about online agents? (that is reasoned answers please, without the vitriol)
Before you start yacking your head off, take professional advice.
The main point of the press release was actually about our new website which went live last week - www.hatched.co.uk - you can see it if you copy and paste that into your browser ;-)!
The VAT thing was a bit of an aside as I don't know of any other agent that publishes their fees including VAT.
You all go out quoting vendors 1.5%+VAT. You all say 'PLUS VAT'. I know you do. I used to do it as well. And the guys who work at Hatched all used to say it when they worked on the high street (some of them worked for a couple of the biggest estate agents in the country and a few others worked for small independents)
It's not 'thin PR'. It is something that should be addressed in the industry. You should be QUOTING VAT over the phone and face-to-face in all of your conversations with potential customers. There should be absolutely no mention of VAT whatsoever, until (unless) the client asks for a receipt at the end.
Adam - putting the debate about online v traditional to one side, isn't a press release on something that is actually a regulation of advertising a bit of thin PR?
PeeBee
We have already been here. It is reported on Hometrack that the average estate agent is currently selling properties at 95% of asking price. At Hatched, we are selling properties at 97% of asking price...
Maybe I should do a press release about this as well.
Back on to the subject of the VAT. I know for a fact that agents quote '1.5%+VAT' either over the phone or face-to-face. Sure, the VAT is worked out on the contract when the vendor signs, but that is NOT transparency. You should be quoting the vendor 1.8% over the phone or face-to-face. VAT doesn't need to be mentioned - as I said earlier, Tesco don't mention the VAT on their ticket prices...
As someone earlier posted, it is as much about the fact that you guys don't publish your fees anywhere at all. It's all very cagey and mysterious if you phone an agent and ask them what their selling fees are. Another misleading and underhand tactic employed by high street estate agents.
Sure, you can vary your fees if you vary your service according to those fees. However, we all know that as estate agents, you start at 1.75%+VAT, but you can come down to 1.25%+VAT if the customer really pushes you. So, some poor bugger out there is paying 1.75%+VAT for a service that is the same as the person who is paying 1.25%+VAT - now that, is not fair. And is in no way transparent.
I've never slung mud PeeBee, I'm just trying to make our industry better, fairer, more transparent for customers.
'Hound'
You say a lot of 'we' - which I take to mean that you are a High-Street Agent - yet your post gives me no other indication that you are actually what you are inferring yourself to be.
Do you really think that Agents are sitting quaking in their seats over the 'threat' of Online Agency? Those few that are, shouldn't be in their seats in the first place, in my opinion.
There has always been a percentage of the market that wants a service for a budget price. In the past, there were Agents - still are - that serviced that sector of the market. As far as I m concerned, those Agents who think that 'any instruction at any price' is a sensible business model are welcome to that train of thought. And, frankly, if such an Agent can perform to the same standard as my Agency, and achieve the same result for less cost to the vendor, then good on them - and vendors would be daft to enlist us when they could get the same job done cheaper - wouldn't they?
As far as slinging mud goes - I think you'll find that the Onlines have the edge on Traditionals in that respect (I make that point having until recently been 'away from the coalface' for some time but had maintained a keen interest in the profession, I have read many articles and 'blog' postings which have been a barbed dig at High Street models from the likes of Mr Day and others.
I'm more than happy to go nose to nose with anyone - whether they be two doors down or in someone's makeshift study, or up in the 'cloud', as these online chappies like to think they are. I live by what I do, day in, day out. I don't start battles - but I don't cower away from them either - and I certainly don't lose any!
May the best company win, I say - but when their USP is "We are cheap/cheaper/cheapest" - then they are their own worst enemy.
If an Agent cannot even negotiate themselves a worthwhile fee, then what chance does that vendor stand when the Agent is negotiating on their behalf over a few thousand pounds with the prospective purchaser - which is the REAL difference between their SAVING and LOSING in their choice of representation.
with the housing market properties can take a significant time to sell - the VAT can change and is charged at the point of completion - if you quote a fixed cost you would be liable for any variation
What is it they say about assumption @wilko?
Hound seems to think that his agency is becoming more of an online model, he's seeing less footfall. That's fine, not what I see happening in my areas, but I'm sure he (and you) will stand by his convictions and board up his windows soon.
Read the story about Romans and ask yourself what they think of having high street premises or talk to some of the top brass at foxtons and see if their planing closers in favor of a single rightmove subscription.
I can't seem to find any online agencies floating on the stock market, why is that? I did however see this one trying to raise money from a lending circle.
So @wilko if your right, you'll be making plans to close your office and will be selling property from your under stairs cupboard or where ever and I'll be going bankrupt with another 13 years left on my lease.
We shall see!
All I would say is that the agents who seem to believe this is the way forward are the same agents who tend to sit back and let leads come to them, they are bound to take this view.
@Quagmire
Like you, I've never lost an instruction to Hatched. They have had the odd property in my part of the world, but only 2 or 3 since they started.
However, you then resort to the mudslinging that I referred to. Hatched have been scrutinized by the ASA who have upheld their right to their statement that they provide a full agency service, so we have to accept that, and having looked at their website, I cannot, in all honesty, see anything significantly different to the claims made in promotional material to any other 'conventional' agent, other than their claims on fee savings. Given that according to 'Which?' average agency fees across the country is 1.8% (+vat) their average saving is a quite believable figure, and their 'total' saving only equates to 270 sales per year in the 7 years they've been around.
So the original question remains unanswered!
that said, the accusation that agents conceal the true cost by not quoting the vat is a bit of a nonsense, most of us of course don't publicly advertise or quote fees until we are on a potential vendors settee, and then I'm sure we all explain that vat will be added to that fee! Perhaps what Mr Day is really saying is exactly that, fees are not publicly advertised, and therefore not transparent. He may have a point there, I wonder what impact it would have on Spicer-Haart if they publicly advertised their fee!
@ quagmire...I don't think you have understood what Hound is saying. In general terms the industry IS moving to become an online industry.....same as holidays, cars, and most electrical goods.
I don't have to compete with Hatched where I am but varying online propositions appear in alot of chains locally and more and more boards are popping up.
Surely you are not saying that our offices will still be here charging the same in 10-15 years...it's just not possible...whatever you think.
@Hound
I'll give it a go.
First of all I've never lost an instruction to Hatched, maybe I will one day, who knows. Currently Hatched have zero instruction in any of the post codes I operate in so I'm not exactly panicking.
What I do have an issue with is false advertising, spurious claims and a business model solely dependent on slagging off the competition.
Oh dear, here we go again!
If the traditional business model for agency is so perfect, then surely Hatched are no competition, so I'm at a loss to understand why they create so much angst for traditional agents. Perhaps someone can explain!
Perhaps instead of flinging mud (which in my opinion, demeans the industry as a whole) we really should open our eyes to what is happening in the high street, although we all sit here in our shiny offices, are we not in essence all gradually becoming 'online' estate agents, as the footfall through the office door becomes ever less?
@DitchThisWebsite "Why Estate Agency Today ruin their credibility by plugging an online agency" ------- How can an article about an estate agent ruin their credibility? Oh, hang on ... you must be one of those 'proper' agents hoping those pesky online copycats will be gone when you take your head out of the sand. I for one respect Estate Agent Today for accepting they are here to stay and therefore reflecting the true market competition.
Obviously he is telling porkie pies that agents do not already do this. He is also an expert at making many of you get your knickers in a twist.
However, what he is saying is absolutely correct. This is a B2C transaction and is against your customer's interest to quote exclusive prices...as he says, they won't claim it back.
ALL (intelligent) agents would expect a fully vat inclusive price for a 3k holiday...as a consumer it is just irritating to not have the true amount put on the table.
''He said he has come across no other agency doing it''
Didn't look very hard did he?
It's interesting that Adam himself is now suggesting that agents are quoting fee's of 1.5% and yet still claims to save the average punter £3700. Someone didn't do their maths before this tripe was released.
I thought you used an average fee of over 2% to claim you was cheap Adam?
To be fair, I always quote 1.75% + VAT at a valuation?
Is that wrong then?
Hatched won't make anything from their 08 numbers. I think I'm right in saying that 0845 and 0800 don't make any money for a company
Can Hatched declare what they make from their 08 phone numbers?
It's just a lever bit of marketing by Adam Day and guess who's spreading the word for him - estate agents! Sellers know they have to pay VAT, but to the Revenue, via a business, which in this case is the agent.
Why Estate Agency Today ruin their credibility by plugging an online agency for them? what a pathetic 'story'. 100s of agents do this as do we, so I can only assume EAT is thinking of investing in Hatched !!!!!!!!!!
If you word it carefully and say something like
"I find that story about Hatched embarrassing" linking the two terms 'Hatched' and 'embarrassing' does them a tiny bit of no good. 'No good' is now another little bit of word association that get linked to Hatched. While it is not actually saying their service is rubbish the search/seo algorithms aren’t smart enough to understand the full context. Can you see how it is possible to manipulate things so that a vexatious story which was nothing more than a professional troll by Adam Day can backfire?
Spicerhaart branches already do this, as is required by TPOS.
Im not visiting this website anymore, it going downhill FAST!
That story is embarrassing.
Please shut up!
You fell into the trap! call yourself a marketeer, learn the basics mate!
All I can guess is that you are either seriously bad at yor job or you work for h8tc8d
Rule 3.18 of the CAP code states that "quoted prices must include non-optional taxes, duties, fees and charges that apply to all or most buyers".
Also, the ASA has ruled as misleading many ads that quote prices exclusive of VAT
You have achieved that we can see right through this vexatious PR.
Why on earth are you advertising this to your competition? Oh that’s right the more replies this story gets from outraged , wound up agents the more plugs for H8888d, helping with google SEO.
The best thing anyone pi55ed off by this daft press release can do is say nothing. Do not post. Do not mention h8888d in any reply you feel compelled to post.
I have heard it all now. This is such a non story.
The 'Committee of Advertising practice' otherwise known as the CAP code insist on pricing where advertised to the general public that those prices include VAT. This applies to print and online media including businesses own websites.
Is the truth of this story that Hatched have had their wrist slapped by the ASA???
Damn it!
I missed out being the first then when we started quoting inclusive fees, should have got a press release out with a dollop of pretend outrage