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TODAY'S OTHER NEWS

Rightmove fee rises and attitude provoke huge anger from agents

A survey conducted by Estate Agent Today suggests there is huge anger from agencies against Rightmove in particular for its fees.

On Friday we asked agents to give details of their comparative portal fees; some gave these explicitly in the comments section of our story while others sent confidential emails. 

The range of costs was vast; this may have been because of their different packages and different locations. No corporates or large regional chains responded, so most of our feedback involved smaller independent agencies.

Some figures are striking (all figures are pcm):

- Rightmove costs for single-branch agencies vary from £1,936+VAT down to £990+VAT;

- Zoopla costs for single branch agencies vary from £665+VAT to £250+VAT;

- OTM costs for single branch agencies vary from £355+VAT to temporarily free.

The highest charge any firm told us about was Rightmove levying over £10,500+VAT per month for a multi-agency office in southern England. 

One single-agency office told us it paid an extraordinary £31,380.00 in portal costs per year.

What was clear from the survey - based on 30 agents who gave us details of their costs - was that the bulk of their anger is aimed firmly at Rightmove.

We agreed to keep agents’ responses anonymous if they wished, but all of these comments came from agents who revealed their identities and locations to EAT:

- “Rightmove staff are well-trained and present a compelling case - always - which we are now beginning to kick back against. The time isn’t far off when the majority of local agents will all drop RM in one fell swoop, which was always the long term plan when OTM was set up”;

- “Despite having disdain for Rightmove I don’t want to feel their wrath if they decide to make examples of some agents. Nothing would surprise me”;

- “Valuation leads: Rightmove useless, we only get ‘potential valuations’ for people who are already on the market with another agent usually outside of our area … Zoopla between four and six enquiries per month mostly from people who are ‘just curious’ and often quite hard to get back in touch with … OTM - one valuation once in a blue moon.”

Some agents made on the record comments below Friday's story, which in case you missed them included these:

- “In terms of sales leads, RM is better than OTM by about 30 per cent but certainly not five times bettie which is virtually what the price difference is. When you factor in that we get more rents leads from OTM than RM it certainly can’t…”;

- “I believe the days are numbered for portals, more and more people are turning to other methods to buy and sell their homes, we were working on an exit strategy anyway…”;

- “We get around the same level of enquiries whether it be people looking to buy, view or sell from Zoopla and Rightmove. Zoopla is far better value for money. Right move’s fee is totally unjustifiable…”;

- “All our letting leads came from OTM, level with RM on sales leads. However, when I asked RM what the cost of sales only would be they told me £1,500+VAT. [The agency paid £1,125 for sales and lettings when the firm left Rightmove in September].

Estate Agent Today has asked Rightmove if it wishes to comment on what would appear to be the industry’s growing anger at fees; this could be in the form of a response to this article or an interview. We will keep readers posted on how this develops.

  • Michael Riley

    It maybe a contrarian view, but I think RM provide exceptional value for money for the average agency. Small agencies benefit exponentially from listing there.

    The time to have had these conversations was twenty years ago when they launched.

    Now, its like shutting the stable door after the horse has bolted.

    The unintended consequences of a fee revolt could well be RM muddying the waters of their pricing structure through dismantling many more components of their service. Making it far more difficult to calculate ROI and probably push the overall price up.

    Their rention rate of agencies is 94 percent, until that slips substantially dont expect any change.

    icon

    Not maybe, that definitely IS a contrarian view. Just the type of feedback Rightmove love. Well done, your prices are now duly frozen for next year.

     
  • Andrew Stanton Estate Agency Insights Strategies

    Rightmove makes huge profits because they are a tech company, and whilst they have a minimal cash burn on new development, their core product, the listing of property is not an ever increasing cost. Like many such companies, a product or service is developed and it catches on, and the cost to roll it out to new clients becomes relatively minimal after the initial start up phase of the business where usually there is a multi-million pound investment to produce the winning model. As a maturing business it is clear that because it holds a monopoly situation, it can adopt a pricing policy that it chooses, with some agents paying far more for an identical service, which means they subsidise others. Also, online agents who cover vast swathes of the UK probably have a pricing plan very different to that of an agency with 200 offices in the high street. What underpins the rightmove model, and is it’s strength and weakness is that it is the continued patronage of the agents. The problem for Rightmove is that if agents become a disillusioned collective who feel they have been paying through the nose, and in fact have been subsidising perhaps corporates or online agents, then a very dangerous schism may appear. I am not suggesting this is the case, and perhaps as this debacle grows there may be more transparency, but, the day of reckoning is coming, because the new generation of proptech solutions might in a single leap make the provision of a digital shop window on the internet at a unit cost of £1,200 plus a month to be a costly nice to have, rather than the cosy core essential that as Michael states is ‘exceptional value for money’ it may well be for the present, but not if you subsidising the rival agent next door to you.

  • icon

    The issues is that Agents are stupid enough to pay for Rightmove "bolt-ons" if all agents ditched the add-ons and just kept the core services their profit would vanish. Wake up. OTM is the only sensible portal at 1/4 of the cost.

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    But if you ask to remove the additional products they want to nearly treble your core memebrship so it is the same cost as you are paying for the ad ons.

     
  • icon

    In most rational businesses, when the cost of supplies go up, there is usually a simultaneous increase in the sale price. If you went in a chippy and they told you that, though the price of potatoes continually goes up a lot, that they're actually cutting the price of fish & chips, you'd think they were a massive div. This happens a LOT in estate agency.

  • icon

    PropertyMutual launched its legitimate mutual platform, 100% free of investors and advertisers, five years ago. Agents' Mutual, a pseudo-mutual business model, with its investors, de-mutualisation and cash burn requiring further cash raise and share dilution is Rightmove v2. It successfully diverted the attention away from PropertyMutual but we have continued with the only business model that can work solely in the best interests of agents as we remain 100% independent and cannot be floated. We recently converted from free listing to a nominal subscription to cover the costs of growing inventory prior to members voting on increasing transparent, staged subs. Any non-mutual, particularly the so called "free portals" and any listed or private equity portal have to work in the best interests of their investors and advertisers - its as simple as that. Take a look.

    Marcus Parkinson

    Hi Andrew, I admire your sentiments and I have looked at the site - the only problem is theres not one advertiser on it in our area except for Purple Bricks. The only viable alternative at the right price is Agents Mutual / On The Market - which you termed Rightmove v2? Which is probably unfair considering their fees are a fifth of Rightmoves. Whilst I understand the philosophy that prices may increase in the future, For me that's a bit like saying "I'm not going to shop at Aldi because whilst it's significantly cheaper, at some distant point in the future they may become as expensive as Waitrose!!! Should that day ever come people would simply buy there food elsewhere.
    We have made the switch and we have saved significantly (Could buy a car with the savings since last December). Should they ever try and become Rightmove 2 we would simply switch again.
    To sum up I see this excuse all time that maybe somewhere in the distant future on a planet far from here the prices MAY rise to Rightmoves levels, personally that's just crossing bridges that don't exist yet. The really problem is here and now and people will either be slowly bled or switch today to a viable alternative and On The Market seems the most credible at present.

     
    icon

    Problem is, I don't think I have ever heard of your website until now, I don't think I've ever seen it suggested in any web searches and I'm pretty sure I haven't ever heard another agent or client mention it either.

    So, I just took a look. And I'm not that impressed with it either. It looks quite dated - and the tenancy fees you quote on properties are so dated, that they're illegal!...

    "Admin Fees
    The asking rent does not include letting fees. Depending on your circumstances and the property you select, the letting agent may also apply the following upfront fees:

    general administration fees reference fees (including credit checks, bank, guarantor, previous landlord, etc)
    application fees
    fees for drawing up tenancy agreements
    inventory fees, including check-in and check-out fees
    guarantor arrangement/application fees
    additional occupant fees
    pets disclaimer fees/additional pet deposit
    Fees may be charged on a per person, or per property, basis and will vary from agent to agent, so confirm before viewing."

    You have an awful lot to get right before you can make any sort if impact and for that you're going to need more cash from somewhere.

     
  • icon

    To many RM Re-Moaners, doing nothing about it, need to get a set of B***s and get rid.... RMEXIT is the only answer. RMEXIT...

  • icon

    Hi Marcus
    It is down to what agents consider the right price.
    Is giving data gratis to a "free" portal the right price? What happens to that data when the advertisers and investors of that portal want to cash out? Most exit strategies for non-impact investment are of the order of three years. PropertyMutual curates and silos our agent's data in our data lake so that it cannot be exploited by unauthorised third parties.
    What about the investors in Agents' Mutual who signed five year contracts on the promise that they would never pay more than newcomers? What about the de-mutualisation and all the other broken promises, the cash burn and the increasing likelihood that more cash will need to be raised? This is why I believe the industry is looking at RMv2. OTM is on exactly the same journey.
    A legitimate mutual cannot and will not make rash promises and raise funds from any outside source as that would immediately de-legitimise the mutuality. That is why we grow organically, without locking agents into five year contracts at high subscriptions, burning through their cash, and then having to say "sorry, we ran out of money again".
    So is our current inventory growth subscription of £10 per month per office, the equivalent to a cup of coffee a week, the right price, the right investment in your future? The math, and our transparent staged subscriptions based on member numbers, suggests that if the industry would adopt PropertyMutual en-masse, the "right" solution to raising sufficient funds, entirely independently, on an annually recurring basis is in the industry's hands right now.
    Finally, PropertyMutual is a member of Social Enterprise UK and has a charitable assignment condition meaning we cannot be sold to profit individuals. We therefore trust that our ethics and credentials speak for themselves and are sufficient motivation for agents to subscribe, in the realisation that there is a better way to run a property marketing platform.

  • icon

    Headline should read.. RIGHTMOVE still shafting stupid gutless agents..

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    Hi Hit Man
    Surely the only way agents can negotiate with RM is if sufficient agents come together as one as there is safety in numbers? In order to enable the discussion, do agents not require the comfort and backing of their own, 100% independent business?
    I started PropertyMutual believing that the pricing and principles spoke for themselves but another business corrupted my vision of true mutuality and grabbed all the attention by locking agents into expensive contracts and spending huge sums of money.
    I believe there is still a massive appetite for the "right" alternative and that my original vision is still achievable, particularly for any disaffected OTMv1 members who can now see light at the end of their tunnel and who believed in a never-to-be-sold mutual.

     
  • icon

    Hi Nick, you are correct about the fees text which needs amending and is in the development programme to be done this week.
    With regard to look and feel of the website, the appearance of a website is not the most significant cost in running a platform and is always subjective. Bells and whistles can also be added cost effectively and are always in our project management cycle.
    So our main focus and challenge is growing inventory via a nominal subscription to cover operating costs. AM and OTM took the decision to call their business a mutual but based it on expensive lock-in contracts, creating different categories of members and making big promises to their agent investors. Those promises were rewarded with de-mutualisation, loss of independence and the need to raise external investment so I still maintain our approach is legitimate but it brings its own challenges, in particular marketing budgets.
    So, we have the chicken and egg of how to attract investment into a mutual. The only way is to grow organically and for individuals like you to "invest" the price of a cup of coffee a week so that we can grow inventory and numbers to critical mass and move onto stage 2 funding the growth of the business with our staged subscriptions based on member numbers. That is the only way to avoid burning cash to achieve unrealistic promises that end up being broken.

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    Andrew the only way is to RMEXIT and support OTM.

     
  • Velgram Quaid

    It makes me smile the way Estate Agents whinge about Rightmove fees. You need to organise yourselves and work as one to beat RM. Alone you are weak and RM will continue to run rings around you. Unite, form a property website by estate agents for estate agents and cut Rightmove out of the equation completely; then you'll have a better and more affordable alternative and RM will vanish overnight.

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    Hi Velgram
    The only website 100% funded, owned and run by agents for agents is PropertyMutual. It is there and waiting to serve the industry.

     
  • Velgram Quaid

    Property Mutual? Never heard of it. So what does that tell you? It needs marketing properly, people need to be told about it and agents need to USE it. If every agent in the country decided to ditch Rightmove and use PropertyMutual tomorrow, RM would collapse virtually overnight.

    icon

    Thanks Velgram
    As you correctly identify, we need member funds to market properly so we need agents to sign up on mass for the princely sum of £10 per month per office.
    The problem could be solved so quickly.

     
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