One of the biggest supporters of the self employed estate agent business model admits there are risks and it’s not for everyone.
Nicky Stevenson, managing director of Fine & Country UK, says the pandemic and this year’s better-than-expected housing market will lead many agents to rethink their goals this winter.
But she says the self-employed approach - called the associate business model by Fine & Country - Is not risk-free and there are several aspects that agents should consider before taking the leap from employed to self-employed.
Stevenson claims the associate model suits driven, entrepreneurial-minded people willing to take risks to achieve their personal goals. “There is also the matter of being self-motivated. With autonomy comes the need to be disciplined and have the ability to hold one’s self accountable.”
She says there are seven factors overall to take into consideration:
1. Grit Not Glamour: “Being a self-employed agent is not all Selling Sunset. You don’t get given leads on your lap, you have to generate them, win instructions, market properties, find the buyer, and see the process through to completion. In the case of a self-employed agent, failing to win the listing and complete on a deal means not earning, and as the commission stakes are higher, it is a bigger blow when it doesn’t work out.”
2. The Benefits: The self-employed don’t have the benefit of paid holiday, sick leave, pension planning and private medical insurance, unless of course they pay for it themselves.
3. Flexible Isn’t Always Flexible: One reason many agents go self-employed is autonomy. “However … often as an agent your working hours are determined by your clients’ and buyers’ schedules, which could mean working outside of the usual nine to five, and on weekends. Buyers will want to view properties when they are not working, which means agents will be” says Stevenson. She adds: “To hit the ground running quickly it will require a huge investment of time and energy to get going, meaning you may end up working more hours than you ever have before.”
4. No Security of a Monthly Salary: “While self-employed agents have the potential to earn large sums, it might take a few months - six months even - for an agent to complete on the first transaction, so in the short term they would have to have savings set aside to carry them until they are able to build up their pipeline. It would be a short-term hit to achieve a long-term gain, but it is still a hit that the agent will need to be able to take. Also, every fall through is hugely more significant than when you are an employee.”
5. Be Comfortable with Being Uncomfortable: “Not knowing when the next payday will be can be extremely stressful, along with being your own boss. There is a lot of comfort in joining a cohort of people who are in the same environment, but it will still take time to adjust and sssociates need to learn to be comfortable with initially being uncomfortable.”
6. Monotonous Hard Work: “In the beginning, it will be monotonous, doing the basics brilliantly. Variety will not be the spice of life as the lead generation activities to get off the ground will be repetitive. Eventually, it will get to a point of doing things most estate agents love to do, such as negotiating and being face-to-face with a vendor on the sofa, but initially it is a sleeves-up attitude that will be required to hit the ground running.”
7. The Buck Stops With You: “Amongst all the benefits of being self-employed comes all the responsibility - the buck stops with you. You need to have the knowledge and experience, know your AML and CPR, you need to be competent and confident in your own knowledge and make your own decisions” Stevenson comments.