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TODAY'S OTHER NEWS

Housesimple boss renews his attacks on High Street agents

The head of online agency Housesimple has made another strident attack on the integrity of High Street agents by saying some are playing “games” over valuations.

Sam Mitchell says in an interview for a business website: “You have some estate agents come round in their shiny suits, they come into your house and they play this game where they try and guess how much you think your house is worth and then they tell you a little bit more so that they win the business.”

Then he adds: “It’s why estate agents have a bad reputation.”

Mitchell - who before becoming chief executive of HouseSimple was head of lettings at Rightmove - has made a previous attack on traditional agents.

Last year he accused them of “living in the past, charging exorbitant fees and not doing enough to justify their meaty commissions” and said they were “cashing in” on almost half a billion pounds of fees paid as commission by sellers in the previous 12 months. And in February this year Mitchell took to Twitter to describe the National Association of Estate Agents’ conference as “a sea of old white men with grey hair.” 

In this latest interview, with Business Live, Mitchell says of his own agency’s representatives: “Our valuers aren’t in suits and because we don’t have a fee, it takes the heat of that conversation out of the equation, so we give honest advice about what’s the best way to sell your property.”

Plugging Housesimple’s recently-announced ‘we sell for free’ business model - which will soon be the subject of extensive advertising - Mitchell tells the website: “A typical estate agent will probably charge you £3,000 to £5,000 to sell your house and other models have emerged that charge you the best part of £1,000 up front, whether or not your property sells. We’re the first estate agency to come along and say we can do everything but we’ll do it completely free, no catches.”

He also says: “We want to give people advice as if we were giving our own mum advice about selling a house.”

Housesimple will rely on referral fees and the sales of additional services instead of levying a conventional no sale-no pay fee, or an upfront payment.

The website also quotes Mitchell as saying: “[Housesimple] has always been a distant number two to Purplebricks, however, I joined the business 18 months ago from Rightmove and we’ve completely restructured it over the last year. We relaunched on January 1, so while we’ve got a heritage and we’ve been around for a long time, it’s really a completely new concept.”

In reality, the latest data from The Advisory - an independent market consultancy - looks at the performance of the top 10 online estate agencies over two-week periods.

It latest assessment, in the two weeks to June 28, Housesimple had only 15 per cent of the new listings volume won by Purplebricks, and no more than Yopa.

Purplebricks had 2,618 new listings in that fortnight; Housesimple and Yopa had 396.

Mitchell’s renewed attack on High Street agents who dominate the industry contrasts sharply with the approach taken by other onliners recently.

In a weekend interview with the Press Association, Purplebricks’ new chief executive Vic Darvey hinted at a possible new pricing structure - widely believed throughout the industry to be no sale-no fee, being introduced at the end of this year - without engaging in any criticism of the rest of the agency world.

Last week the new chairman of Yopa - ex-Rightmove and Countrywide supremo Grenville Turner - spoke of his plans for the agency without criticising rivals, whether online or on the High Street.

You can see the Business Live/Housesimple interview here.

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    The thing Mr. Mitchel is over looking is that a portal selling system, one that passive intermediary firms are wholly reliant on, doesn't have the competition element of an agency sale. Because finding a buyer through the portals rather than an applicant database is ad hoc , unstructured and largely down to who happens to find a listing based on just location and price, potential buyers don't have any effective competition. No matter what the asking price is buyer can effectively pay what they can get away with.

    The lack of effective competition means a 'react to enquiry' sale will rarely achieve the best price, sometimes achieve a good price but most often all a passive intermediary/ internet listed vendor can hope for is an ' it's not we were hoping for, an it'll do" figure that averages according to Gavin averages about 5% less than an estate agency sale.

    Free when you're 5% down is actually quite expensive; 5% of the average transaction price is worth about (£14,500)! so a net £10,000 less after fees

  • Sam Hunter

    If I'm giving my Mum advice I'm telling her to use the BEST broker/solicitor/agent and not merely the ones I may or may not have referral arrangements with.

    So my question would be, does House Simple allow their sellers to use ancillary services they don't have referral arrangements with and then make £0 from a transaction?

    If so, fair play and good luck with the offering - it'll get attention. If not, are you really giving the advice you'd give to your Mum or is there a hint of commission breath (as the great man TP would say) there too?

  • icon

    Jeez, this guy is bitter! Maybe it’s because he is finally recognising that online agents are not actually as good as he thinks they are and his only defence now is that estate agents have white hair. The sooner he disappears up his own Ethernet cable the better.... remember the old adage, “Don’t knock the opposition”? It make him appear mealy-mouthed and unprofessional!

  • icon

    >Mr. Mitchel is over looking is that a portal selling system, one that passive intermediary firms are wholly reliant on, doesn't have the competition element of an agency sale.

    So Rightmove's 141 million visitors a month and 6 million pages in Google doesn't produce any competition?

    You must be an advocate of Rightmove if you think competition produces better transaction prices.




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    Good morning Mr. Lawson.

    Because an agency has about 50 applicants for each distinct category of property they sell and established kpi's mean 10 of the 50 will be interested in having a look at the property. There is usually competition between the 10 of them as to who will be able to secure the property. With react to a portal listing the competition is spread out and sporadic so effectively does not exist.

    Vendors employ agent to create a competition not to simply secure a buyer.

     
  • icon

    Here is another man who, despite working with agents for years, doesn’t understand what they do. He is now threatened by them to the point of having to say his service is free (so he’s won the race to the bottom), and attacks them with banal comments about shiny suits. It speaks to his character and leadership style, as well as what he learnt about agents from his last role.

  • Georgina  Cox

    I do not normally comment – but the comments in this article are insulting to both agents and our profession. Firstly as an Executive of the NAEA Propertymark board and very much present at the last conference it was certainly not “a sea of grey old men”. There were many women at the conference and they are very much a driving force in estate agency. In regard to a business based on referral fees, please stop creaming off other professions and services and show true transparency – the true cost of each aspect of the selling and buying transaction needs to be seen by the consumers.

  • icon

    Funny... The only people that read your criticism of estate agents are other estate agents.

  • Sally Holdway

    I must admit I do worry about any business model which is putting referral fees at it's heart. Aside from the fact the Government have said that they are looking at the case for a ban (which has happened in other legal worktypes by the way), and the new transparency rules for lawyers, now effectively naming and shaming those agents charging excessive referral fees, don't the general public just expect us to be open and clear about what agents are being paid for selling their client data on? If the House Simple model is clear at the outset to their clients how much they will earn from referrals and commissions then fine, but if not, then I'd be concerned that ultimately this model is not sustainable.

  • Paul Barrett

    Nothing wrong with referral fees if it sustains a business and such fees are declared to consumers so they can see what is going on.
    Whether it would be a viable business model..................only time will tell?
    Clearly EA professionals have differing views.
    But then that is business.
    I bet many thought Facebook wouldn't be viable!!!
    But at least people are trying different methodologies.
    Nothing wrong in that though of course it might a turn out to be waste of time and money...............PB!!??

  • icon

    Having had the misfortune to deal with House Simple's 'sales progression team' trying to ascertain a chain and drive through a sale, I say it's a good job that they don't charge for their service.

  • icon

    I'd like to know how much personal skin Mr Mitchell has in the game. If his personal assets were on the line, would he still proceed with this business model?

  • icon

    "they try and guess how much you think your house is worth and then they tell you a little bit more so that they win the business.”
    I'm guessing Sam is drawing on his knowledge from his time as a Director at Foxtons.

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