An industry veteran is launching a new hub-based hybrid agency and is offering to sell 50 homes for free to raise the profile of his brand.
Dean Reeves, who worked at butters john bee for 21 years, most recently as a branch manager, is the managing director of One Agency, a hybrid firm operating across Stoke-on-Trent and the surrounding areas.
Reeves is kickstarting the agency with a team of three and will be joined by Aimee Hughes and Fiona Morris working from a hub office headquarters.
"With a traditional agency, it tends to be the case that they have multiple offices within a small geographical area," Reeves told StokeonTrentLive.
"Over the years I have seen how the market has changed and I believe that we can offer the whole package from one place."
Reeves, who has also appeared on BBC's Homes Under the Hammer on several occasions, says the agency will offer no sale, no fee and won't subject its clients to a tie-in period. He adds that working from one hub allows his team to communicate better while still being able to offer a face-to-face service for clients.
As part of its launch campaign, One Agency has pledged to sell its first 50 properties for free, although they must be located in two specific postcodes and sold before June 10.
Commenting on the offer, Reeves told the local paper: "We will make absolutely no money from this, but we want to raise awareness of what we are doing here and we want people to start recognising our brand."
"We have started the company with zero stock and this is a way for us to start to build up a portfolio."
"Once we have done that, we want to really push the lettings side of the business and create new jobs, eventually moving into a bigger property ourselves."
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Looks like a great model! Good luck Dean!
Another game changer.
I wish you well with your new enterprise, but I would advise a different approach to selling property for no fee. I deal with a huge volume of new start businesses and give them advice and usually they do low fees in an attempt to gain business. Many are started by seasoned professional persons such as yourself who if employed would command a large salary due to their experience and expertise. So, why would you work for nothing? The other point is this, vendors on the whole do not want a cheap fee, surveys suggest only 12% of vendors are fee sensitive searching for the lowest deal - hence online agency having 7% to 10% of the market.
What vendors want is a proper agent, be it bricks and mortar, hybrid or online, they want service and a sale, if you can provide this you will develop your brand and make profit. At present every agent unless they dominate an area will go out to 10 market appraisals and 3 and a bit will come to the market with that agent, a 32% conversion rate. That conversion rate is the same if you charge zero fee or 3%, the reason being that fee is not the determining factor - the person sitting in front of the vendor is the determining factor and I am sure Dean that you and your team are very good at what you do, so why do it for nothing?
I always say to my clients when they ask what fee they should charge this: - breakdown your true running costs of selling a property including the cost of marketing the 48% of property you fail to sell, so cost of office real or virtual your overheads, salaries, marketing, tax etc, plus a 28% margin for your gross profit. Usually the figure is around £2,800 - there will be regional differences, I then say to the business owner, each time you achieve under £2,800 as a fee you are running at a loss, above this you are making money.
It is up to you if you want to do selective discounting to achieve market share, but profit is the one thing that every business must achieve to survive. One of my clients adopting this attitude, banked an additional 42% in the first six months of their next year, having explained to the vendor at market appraisal the cost of sale and what level of service they could provide if they charged a realistic fee.
Some agents do cheap fees and if that works great, but people forget that many dominant agents charge high fees, because vendors trust the brand because the agent has for years done a great job.
Agree Fees are important and will pay between .75% to 1.5% both for Excellant service.
Foxtons used to do this in their new offices and subsequently other agents have taken on this approach, not heard of anyone outside of London doing it though - but the property had to exchange in a certain time period for it to be valid - so they got a big rush of instructions at the beginning....a great way to build up a database from a cold start, generate interest, awareness and a great way to get positive reviews from your happy sellers - you'll basically be saving them their onward stamp duty. 50 sales though....could take a while....wishing you luck.
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