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TODAY'S OTHER NEWS

Online agents undervalued, underpaid and 'not really self-employed' - guru

One of the most experienced and high profile figures in the industry says individual agents working for online companies are typically suffering from low income, struggle to have a good work/life balance, and don’t enjoy the true benefits of self-employment.

Adam Day has been an estate agent for 22 years and is best known for a trio of online positions - he founded one of the first online agencies, Hatched, in 2005 and then sold it to Connells in 2015, after which he headed up operations at easyProperty before joining the original Emoov where he was head of estate agency for a short period. 

Now Day is leading the UK activities of EXP Realty, a US estate agency that describes itself as ‘the Amazon of property’ and which allows its freelance agents a higher-than-usual chunk of sales commission as well as equity in the company.

In an extensive interview with industry commentator and consultant Christopher Watkin, Day talks about the challenge of agents going self-employed - “making the big jump” - and how in some cases they are disappointed at the lack of empowerment that comes with working for themselves, despite believing it was going to be easier.

Referring specifically to online agents, most of which have self-employed local experts, he says: “Some of them have to have three interviews, have to ask for holidays, have to work own Saturdays, they’re expected to hit targets - that’s not being self-employed.”

He says many agents in the online sector are frustrated at reduced investment by the surviving businesses which have been unable to sustain high spending levels, and says there is a widespread feeling amongst online agents that “It’s not worth my while to go out to do this for £250 a listing.”

Day admits that on a practical basis going into self-employment in an online agency may be easier than doing the same thing with a traditional bricks-and-mortar firm because the £250-per-listing comes relatively quickly - typically as soon as there listing is confirmed - while waiting for a commission to come through from a private treaty sale can take weeks or months. 

But he insists many self-employed agents in the online sector in particular suffer from an inability to achieve the work-life balance they wanted. 

He is also wary of how agents employed by firms - particularly corporates - “are part of a very rigid process” that means they cannot express themselves fully as salespeople or as entrepreneurs, working to a regime that often allows little scope for personal initiative. 

It’s a fascinating interview with one of the leading figures in the industry. It’s kindly been made available exclusively to readers of Estate Agent Today by Christopher Watkin - you can see the full discussion below.

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    Good publicity for Adam who has a clear agenda with his new role to grow Exp Realty in the UK..

    Some really interesting information in the sector can be found from Mike Delprete and this presentation in particular where he looks at the big players in the space in the USA and describes their competitive advantage as "sustainable unprofitability"!!

    The top five (Zillow, Compass, OpenDoor, Redfin and Exp Realty) all have significant valuations but none (including Exp Realty) is profitable

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    If the franchisor has any control on what you do and how you do it you are a worker under employment law are entitled to the same rights and rate of pay as an employee. I know because as a franchisee with Century 21 I came across this at a tribunal and won (no one wins though) as we did not determine what our self employed agents could do.
    I have no belief in the self employed (online) route anymore as there are not enough margins (money) in it for both parties so no one wins. I employ all my agents and staff now and have never looked back. Everyone gets paid more and the customers experience is far superior.
    You have to remember the USA system works in the USA as their commission levels are 6%-8% so everyone makes money. In the UK you are 1%-2%. It's not sustainable long term.

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    Hi James

    That might be true in the US about fees at 6%, but the average US agent sells 20 houses a year.

    I would expect a UK agent to be selling 4 times this amount at 1.5%, which works out the same

     
  • edward apostolides

    I have done a quick Google search and can find nothing of Exp in the UK, apart from a few NADAQ articles regarding propose expansion into the UK and Australian markets dated 5th June last year!

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