The chief executive of Emoov, Russell Quirk, has suggested that the unexpectedly low take up of online agents may mean that it’s time to propose a compromise future estate agency model combining elements of digital and traditional operations.
In an article on LinkedIn he says ‘pure’ online and High Street models are now out of date, and likens them to ‘radical left’ and ‘traditional right’ politics - neither is appropriate for the modern world and a centrist alternative is required, he suggests.
“The current online model is generally tainted by allegations of there being no incentive to sell given its charging model and a perception that service levels are 'basic'. This latter charge has been levied by High Street agents keen to show that their higher fees are justified in return for a better outcome” says Quirk.
However, he concedes that this is in fact “a decent argument” against some onliners who are working merely as a listings operation rather than a true agency business. He hints that the basis of much online agency marketing - involving his estimate of £40m spending a year for Purplebricks, his Emoov service and Yopa combined - is unsustainable.
“On the other hand, high street agents are also caught by perception. A perception that they do little and charge a lot. This, in an Amazon world, is also unsustainable. A '9 to 5' approach and an opaque transaction is the antithesis of what the internet generation now insist upon. … A £3,000 bill that's based upon the necessity to cover office costs when the office is less necessary nowadays?” he questions.
Instead, Quirk - at one time a fierce defender of online agents - is now suggesting that the estate agency of the future is “a blend of these things.
He says there could be the credibility and trust of a High Street brand “with a semblance of a branch network to provide that visible comfort” - but without the scale of rent, rates and refurbishment costs that go with an old-fashioned concept of a large network of offices.
“The next generation estate agency model is not low service, upfront fees, nor expensive and unnecessary high street premises that few visit. It is a mix of the established branch approach, albeit diluted, at a justifiably healthy fee and one where an understanding of being able to grow market share but without the suffocation of a 1980's physical branch ethos, is key” Quirk insists.
But he insists that such a combination is extremely difficult to execute successfully - and he says the evidence is the similar experiments undertaken by Countrywide (“catastrophic”) and easyProperty (“a franchise disaster).
“My suggested utopia is one of healthy revenues and lower agency overheads - bigger margins and a sustainable P&L. But being clever about it. And agile. And unconventional. With a challenger online brand bolted on in order to capitalise as this sector grows but whilst sharing the broader infrastructure of a parent company” he concludes.
You can see Quirk’s full article here.