The chief executive of Savills says “the sale of homes will move more and more online” - justifying the recent investment by the company in a hybrid agency.
Last month Jeremy Helsby announced an unspecified investment was being made by Savills - through its proprietary arm, known as Grosvenor Hill Ventures - into YOPA, a hybrid agency operating chiefly online. In total, YOPA secured around £16m in its latest fund-raising round, which includes the Savills investment.
At the time Helsby said the move was "enabling us to take an interest in the high volume segment of the market, comprising over one million transactions annually, to which Savills has had little exposure to date."
He continued: “We have been consistently impressed by YOPA, whose technological edge, dedication to service, clarity and focus on the client at the heart of the sales process all resonate strongly with our core values and the way we do business.”
Now Helsby, in an interview with the Australian Financial Review and reproduced in part over the weekend on Property Portal Watch, says of the YOPA deal: "Whether it works, I don't know. What I do know is that the sale of homes will move more and more online.”
Asked about YOPA’s business model, which revolves around a fixed fee of £780 to vendors to market their home, Helsby says in the AFR: “If you have a £150,000 home that is pretty attractive. People don’t like paying estate agents and they can sell their homes much, much more cheaply online. I don’t think the pure online will work but the hybrid [model] will.”
YOPA also gives Savills access to the volume market for the first time, with the agency having made its name in the residential sector on high-value homes which in recent years have been affected by high levels of stamp duty, the volatility of the pound and, most recently, the Brexit decision.
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What this chap obviously has not come to terms with is the complete lack of customer service these so-called "Hybrid Agencies" offer for their cheap fee. In our business you get what you pay for and we have seen proof of that from PB in our area. We were unfortunately attempting to tie a sale of a property with a buyer who has "Sold" through PB, and it is an absolute joke. When we finally got through to a "Central Property Expert" (whatever THAT means), they told us the sale had fallen through (which the owner denied any knowledge of), then we were told the Searches had been applied for, and finally that the buyers solicitors had not been instructed. Needless to say, that sale is no longer proceeding. Once these agencies take the property on there is no incentive to see whether the property is sold or not, as they already have the money in the bank. Maybe YOPA will be better, but I doubt it.
I used one of these sites once to try and sell a property.
I had only one person interested and he or she failed to turn up for the viewing.
I would never use one of these again.
It is a case of 'you get what you pay for'. 'You pay peanuts you get monkeys', it is as simple as that?
With Savills and Countrywide both backing a budget model others will follow. The the budget take up will soon rise to 8%. More traditional and new hybrids will follow. In 24 months there could be 20% providing a cheap list model.
At this point the 8 - 10 budget originals or in part budget operatives will have created a substantial monster that will be trying to bring their £700-£1000 model down to £200-300 providing a real poor service for consumers. The big low cost models will have to increase spend to poss £2m pcm.
It's crazy to think vc's don't have the grey cells to see budget is flawed if they create a spiral masses will follow, especially when the model is based on becoming cheaper to foolishly compete.
Totally bonkers.
Indeed. Involved in a chain with PB a couple of days ago. My client complained to us that she as the buyer had to arrange the viewings and negotiate the price directly with the vendor. A sale was agreed & progressing nicely. Then a fresh buyer came along and gazumped her a week into the conveyance. Neither the vendor nor PB checked out the finances of this new buyer (who had of course caused my chain to collapse). She could not even afford a mortgage in principle at the price agreed, let alone get an offer. Sorting that out caused another week of delay. We are now, after much distress and also almost losing the buyer one down, back on track and looking forward to dealing with PB's conveyancing teams. yet somehow they seem to be getting more market share, but I can report several viewers giving us feedback that they would not even enquire about a house on the market with only an online agent, having heard too many horror stories.
@ Michael - interesting. So they didnt check out the potential buyers and the owner didnt know how.
Not a good direction for the market to go to for consumers. .............
So for any good negotiator, there's a new model. If you can get offers up. ...... then why not represent buyers and target vendor/sellers who have gone to budget listing agents to save £housands on agents fees and take your fee from the mega £housands saved, that sellers stand to lose when a buyer is represented by a good negotiator.
We could flip the industry and save buyers £thousands . ..........
Probably not the done thing, but I have written this article today which fits in nicely with Grahams piece.. https://www.linkedin.com/pulse/estate-letting-agents-going-like-craig-swire?trk=prof-post
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