Andrew Stanton Estate Agency Insights Strategies

Though I know of no scorecard, does anyone out there know what in 2019 was the profile of companies who set up in that year. Eg, 100 traditional agents set up from an office, 80 hub agents set up from high street location, 40 hub agents set up from non-high street location, 23 franchises taken, 230 self employed in eXp or KW type of role, 170 LPE's various online agents. Just to get an idea of the direction of travel, including the opening of new corporate branches in whatever format. I think it will make interesting reading.

From: Andrew Stanton Estate Agency Insights Strategies 23 December 2019 11:47 AM

Colby Short is in a sense so right and so wrong, I once read that 87% of online property portal watchers digitally viewed stock just as a hobby, with no intention to purchase. So, a surge of viewers across the festive season may mean nothing. Or maybe the surge does mean something. As in our click and go, twilight virtual reality world, we now inhabit, where our bodies may be in a room, but our minds are definitely elsewhere, tantalised by digital offerings. A few days off, sitting on the sofa, will for many be the core time apart from 'holidays' when the 'family', and extended members can discuss the strategy for the new year. And given the B-word is now hopefully behind us, I for one will be avidly looking on my 'digital devices of mass instruction' my phone and i-pad at the possible next property I will be looking to buy in 2020. Subject to the collective input of those cherished people grouped around me, including the views of 'Aunty Tina' as she quaffs an industrial amount of Bodegas Tradicion Oloroso, in front of the Stanton Yule Log homestead.

From: Andrew Stanton Estate Agency Insights Strategies 23 December 2019 11:27 AM

Whilst obviously this fictional young couple have bought a property on the fictional HS2 line, with trains speeding at 250 MPH, causing their wall to tremble (or maybe something else is causing earth tremors). In a way, Zoopla have overlooked, in this nod to bedroom farce, the fact that in reality 70% of first time buyers are in fact in rented accommodation before they buy, rather than living at home with the 'tyranny' of 'parents' whose presence minimises their freedom to ... well do anything they like. So, could the advert have been positioned at this bigger proportion of buyers? For sure this advert will cause debate and get Zoopla out there, so three ticks for that, some imaginative content, and maybe the property portals or Zoopla at least will start the 2020's as they mean to go on, pushing the boundaries, and not a crab in sight.

From: Andrew Stanton Estate Agency Insights Strategies 23 December 2019 10:45 AM

Zoopla gets it, I could have written the identical replies given by them, and that is why they may well be the winner. It is the consumer, the millennials and gen-z who are heading the charge for a quick, pain free, property journey, their force is irresistible. Zoopla are agile enough to react and embrace this. In contrast, Rightmove feeling themselves invincible inside their impregnable cash cow castle, may look back at their Nokia moment, which I think was mid last year, and think if only ... if only we had listened to our clients, if only we had kept our eye on how the property industry was evolving we could have had it all. The two very different responses that the two main portals gave to Graham say it all, one realises that it needs to recreate itself in the image of a facilitator for property business, helping its agent clients and visitors to its site, the other feels that it is just a digital shop window. And that is kind of where Nokia’s journey ended, it thought was just a mobile phone, which as we all know was not the evolutionary case, it became much more than a mobile phone, it was to be the digital dashboard of the modern world.

From: Andrew Stanton Estate Agency Insights Strategies 20 December 2019 23:21 PM

I assume and I know this is dangerous, it would be a 10% extra help to buy option, for those first time buyers looking to buy locally. So, a 30% deposit repayable after 5-years, or paying the interest on it. This may not be the scheme, and it might be a post election soundbite, but at least housing is back on the parliamentary agenda, which is a refreshing change. Having seen help to buy, being taken up by 61% of buyers who could have bought without it, there are big questions around its use, and does it inflate house prices, and has it helped a moneyed sector of society up another rung or two at the cost of others?

From: Andrew Stanton Estate Agency Insights Strategies 20 December 2019 16:09 PM

No Velgram, no spoof, often agents are placed in the centre of domestic situations, and a sympathetic and professional approach often at a time that is critical, helps those most in need. Despite all of the pantomime vitriol aimed at agents, it is well known within the industry that the caring and listening side of our industry often fills the gaps in helping people who are at crisis point. We deal with all types of situations, but hatched, matched and dispatched, are key areas, and the protagonists caught up in these life changing events I have found are grateful for the support and quiet words and helpful advice we give, especially those who are isolated, frightened and vulnerable.

From: Andrew Stanton Estate Agency Insights Strategies 20 December 2019 16:02 PM

As they say Graham, statistics can prove anything you want them to, but here are a few pre-Christmas thoughts. Purplebricks have over 500 Local property experts/listers who are self-employed owning their own company. This means that on average they each have listed for their company around 30 properties currently for sale. 16,000 instructions divided by 500 LPE’s. Purplebricks unlike most other agents, turn each instruction into upfront cash, typically a spend by the vendor of £1,300, so that 16,284 of listings means close on 21M of fee in their bank, and that is just for listing. So, a good model for their cash flow. But, why then do Purplebricks lose/burn around 3M more each month than they get as income? In April 2018, they had 150M sitting in their bank according to their annual accounts, in the next 12 months despite taking to the market thousands of properties, they managed to burn through 7.5M of cash each month, more than their incoming cash, a staggering 90M burnt through in the year, leaving them with only 60M in the kitty by April 2019. In their latest financial report, they have burnt through another 19M since April, leaving just over 41M. Which if they burn through 3M a month, means they will run out of cash in 14 months. The reason perhaps Purplebricks has so many instructions is that it is ‘buying the market’ which is fine if you have the cash to keep the company moving forward, but unless there is another round of capital funding to underpin the company, it simply will run out of cash. It was alright when private investors and the founders pumped their own money into the company, followed by capital generated by listing on the the Alternative Stock Market, etc, but, with the share price in the doldrums in real terms, and six major online agents withdrawing or being forced to withdraw I feel there is little appetite to get fresh investment. The most likely outcome is that Axel Springer will take them private, re-jig the model, make it cheaper to run and it will service a certain sector of the market and type of vendor who is price sensitive to fee. Perhaps, the lesson for other agents is that taking a fee of some description upfront, sale or no sale is not a bad idea, it helps with offsetting costs, gains commitment from the vendor and should help cash-flow, all positive things. Back to statistics, having a huge market share of property for sale, is also not really a sign of anything, as we know that Connells or the Skipton building society – will return multi-million pound profits at the end of its financial year, whereas Countrywide who in this snapshot has only 11% less stock for sale is unlikely to be in the same position. Turnover Graham, as you know is vanity, profit is sanity.

From: Andrew Stanton Estate Agency Insights Strategies 19 December 2019 12:45 PM

Sean, I am sure you will smash it, you are very experienced, you know the geography, and agency is hard work, rather than hard to do. So, I am sure with a professional attitude you will thrive, my only suggestion, automate as many processes as you can afford to, to allow your personality to be the brand inside the brand. Good luck for the 2020's.

From: Andrew Stanton Estate Agency Insights Strategies 19 December 2019 12:43 PM

Well done to this company for opening another office, and maybe it is time to consider that all agents are really the same, based on the same broad model. Online agents are the same as Hackney & Leigh, they just have no offices, agents who use hubs, share a physical space, hybrids trade from their cars, hotel foyers, coffee shops and their bedrooms, and many agents trade inside a brick shell on the high street. And the property professionals are self-employed, employed or in the gig economy. Where the difference is going to come, is what camp - tech wise - agents group themselves in, moving through the 2020's. Non-engagement or tokenism, will eat profits, whilst early adopters may pay heavily for tech that fails to give a ROI. But, for sure what the future client will be seeking out is service, and tech will enhance that offering of service, with automated processes. Allowing those agents who invest - to evolve and profit. If a new office on the high street is your vision, great, but, if you are relying on doing business as usual, and the competition is more tech savvy, they may well be eating your lunch sooner rather than later.

From: Andrew Stanton Estate Agency Insights Strategies 18 December 2019 17:14 PM

All good Georgina, and as the tech improves, and the customer journey gets less bumpy through machine learning etc, maybe online will be more in the mix, for sure tech savvy people do like to be know what is happening, dashboards gives this. Also, love2move aligning itself, rather than going up against the traditional agent is a very clever strategy, are there any figures for what % of deals an agent does using you as a white label ap? Obviously, not asking you to publish sensitive data, but if you connect on linked maybe we could chat.

From: Andrew Stanton Estate Agency Insights Strategies 17 December 2019 12:24 PM

It is not buyer's remorse that often ends a sale, which a deposit might fend off, what ends many sales is the gestation period. Hopefully, in the next 3-years the digital revolution will catch up with the land registry (yes I know they are on it) conveyancing (yes I know some are on it) and the antiquated and slow process that is sale by private treaty, a preferred system of doing a deal. RoPA and front loading transactions with advanced HIP like legal packs in a digital form, encrypted contracts, etc will be the future. The only variable is - what is the timescale for all this change and what vested interests will hold it back and what forces (millennial's and Gen-Z) will push it forward?

From: Andrew Stanton Estate Agency Insights Strategies 17 December 2019 11:16 AM

I wish Mark and Richard well with their crusade to enlighten property professionals, though many will know I have some sceptical views about the 'online' sector, I do fully embrace that the digital revolution is here to stay both in agency and all parts of our life, and it needs to be demystified. To help those out there who need a little bit of digital guidance, all I can say is that back in the mid 1980’s when I became an estate agent I was at that time an avid reader of science fiction. My favourite book was ‘Machines that think’ a compendium of short sci-fi stories, about future worlds, with a forward by the famous author Isaac Asimov. Though it was published in 1984, many of the stories had been written in the 1940’s and 1950’s and described future utopian or dystopian worlds full of new technology and the role of artificial intelligence, robots and data. Fast forward to nearly 2020, and I am still in the estate agency or property industry, and many of the advances that the sci-fi writers had predicted 70-plus years ago are now part of this world. And within the property sector there is now Proptech – or as I call it science fiction for agents. Let me explain, Proptech is a vast sprawling vista of different new technologies operating within the sphere of property, it is not just digitization, it is re-imagining and interconnecting all the strands within the sector. It covers property, its design, planning, build, sales, renting, asset management, and the way in which humans interact with property. Where the customer or end user’s experience can be analyzed, distilled and digitized into a solution which enhances service levels and the experience of the consumer, hopefully driving a profitable outcome for the owner of the technology. It could be a property with sensors – a talking house or providing seamless systems to replace archaic systems within estate agency, in fact a big problem in Proptech is seeing the wood for the trees and knowing which technology will succeed and which will not. Proptech is many things including; - Deep Learning, Artificial intelligence, Big Data, Intelligence Augmentation, The Internet of things, Machine Learning and Blockchain. The driver is to use data to streamline processes and deliver maximum revenues. (Note that many of these terms would not look out of place in one of Isaac Asimov’s books, I Robot.) Online agents are Proptech, so too is Fixflo in the rental sector, or Offr a new way to buy and sell property quickly and transparently in the residential property sector, the arena is vast but it is not too important to try to define Proptech, better to see the financial advantages that it is bringing. Just as Fintech exploded onto the scene in the past 15-years, where massive amounts of money were invested into Financial technology, Proptech is now starting to have the same levels of investment, in both the UK and the rest of the world. The big problem is that many UK estate agents see Proptech or the sub-division of Proptech that applies to them as Sci-fi. Some agents are very conservative, I was too, and slow moving to make changes to their businesses, they fear change. They feel bamboozled by the terminology and the complexities of Proptech, with many agents say it all sounds a bit costly, and it is not too certain which bit of Proptech works and produces a profit. Which is a shame because many property agents, residential and lettings, would benefit from automating the dull boring administrative type parts of their businesses, their property management systems. In the mid-1990’s I was an advocate of early Proptech using ‘Estate-Craft’ a bespoke software package which was the forerunner of many operating systems now. I realised that a salesperson using the system was worth two ‘pen and paper’ salespeople, because a lot of the repetitive work was taken out, and databases allowed quick matching of buyers to properties, and speed in commerce is always vital. For me the Proptech revolution which spans much more than the annual £6.5 BN residential sales market in the UK, is on the move. Offering its hand in partnership to ‘forward thinking’ estate agency companies. Creating a way of trading akin to Amazon where the customer experience is put front and centre. Some companies have fully grasped that outstretched hand, others sit and wait. And I wonder why? As now estate agency can be based on captured data and analytics which provide a clear narrative of what the customer likes and wants. So, a personalised service, with connection across digital platforms and smart phones, plus the important face to face engagement with salespeople can be provided. Another good reason to investigate and adopt ‘Proptech – science fiction for estate agents’, is the rise of the Millennials (born in the late 1980’s and 1990’s) and the rise of Generation Z or Gen Z the generation born just after the Millennials. These will soon be the volume property industry clients, and they form the digital technology generation, which Wikipedia ominously states are ‘comfortable with Internet and Social media’. That I feel is an understatement, and whilst Gen Z may seem a great name for a sci-fi novel, it might be prudent to start connecting with proptech industry giants like James Dearsley, or Eddie Holmes co-founders of Unissu. Unissu is trusted by almost 100,000 users to quickly discover, research, and buy PropTech solutions from around the world, it represents the interests of over nearly 8,000 companies, it connects you with an international community of market-leading institutions and individuals, to get agents ahead of the Proptech game. Eddie and James are always up for a conversation, and they are both ex-property professionals so they know the property game from your viewpoint, and their advice is free - click Unissu.com - and start the conversation today.

From: Andrew Stanton Estate Agency Insights Strategies 17 December 2019 10:25 AM

No news here, Skipton building society actually has one of the most solid businesses in the UK property sector. And having one branch overhead to service one local market makes perfect sense.

From: Andrew Stanton Estate Agency Insights Strategies 16 December 2019 05:39 AM

Maybe Graham the dust needs to settle a little before any real trends can be seen. But, yes I agree that an end to the impasse at the House of Commons will help rather than hinder the market. As to McVey and Jenrick, let us see who fortune shines on - though with her proptech bias, Esther has at present, got my vote if she remains in post.

From: Andrew Stanton Estate Agency Insights Strategies 16 December 2019 05:32 AM

In the future there will be no silos, until then a strategy to cope and prosper must be striven for. Some great pointers and observations here Gary, and maybe, part of the problem of tech, is that language gets in the way. In the sense that those in tech talk in a different way to those outside, both have common opportunity and goals, but, without dumbing down the science - the property world needs more advocates who can bridge the two languages/worlds. Certainly, efficiency, cost cutting, maximisation of a company’s profitability will engage the property industry, but, selling the sizzle is easy, communicating the journey that needs to be undertaken is far harder. Reapit though are definitely making inroads, and maybe it is time, that will be the ingredient that grows the movement, as the sector matures, and successful tech establishes itself, with less worthy offerings becoming marginalised.

From: Andrew Stanton Estate Agency Insights Strategies 15 December 2019 11:09 AM

Quite easy to do the math, number of listings in the UK in the last 6 months for Purplebricks, then knowing the average 'commission' per instruction, times the two totals divide by the total number of LPE's and times by 2. (As all listings = fee). You now have the 'average' annual income of each LPE, based on instruction 'commission' then factor in some extra income for referral fees, or paid for viewings. These figures are easy to find, some in the company returns, or financials, just google or go on Purplebricks web page or similar.

From: Andrew Stanton Estate Agency Insights Strategies 13 December 2019 22:34 PM

Not a good picture for Purplebricks, despite hiking the fee by £100 a unit, they did 47M of revenue in 6 months in the UK - bearing in mind they charge an upfront fee at around £1,300 sale or no sale, and only turned in a profit of 3.5M, down almost 40% in terms of profit for the same period last year. With further monies still required to pay for their global exploits that will fall in the next accounting period, I think the full trading year will show inroads into the cash war chest that once stood not so long ago at 150M, then dropped in a year to 60M and now must be dwindling fast. Also, if they change their fee model, to a more fees payable on completion, this will skew their cash flow by five months, typical cycle of a completed property, so rather than easing the cash situation it may well compound it. No point in being the biggest lister of property in the UK if you have no cash to run the operation. Going into its 5th year this should be a maturing model, for me it is well past its sell by date, as its offering is in no way spectacular, its just a cheap fee - reflected in service levels, which appeals to a small segment of vendors, selling at the lower end of the property scale.

From: Andrew Stanton Estate Agency Insights Strategies 12 December 2019 09:12 AM

Some interesting points made by the portals, but, all of them may find that with the speed of proptech development through the sector, the new bread of buyer and tenant, may not start their journey by a lazy click on the major portals. Add in the blatant indifference of Rightmove, who by high summer may well have a major coup on their hands from dis-enfranchised agents, and you have a very different landscape emerging. Rightmove talks about collaboration with its agent clients, the subtext here is Rightmove has dreamed up new toys with new income streams to match, pushing up that monthly spend yet another notch. Zoopla has both stripped back its offering and actually added some innovation, and as stated before will I think move in the fast lane to adopt self listing by vendors, the natural evolution of portals in the UK. On the market, well they are a political hot potato, and putting this aside, their branding from the public's perspective is weak, and of course they are still in relative terms a newcomer, and not a mature brand. From my own viewpoint, having many clients in all sectors, the randomness of who pays what for the same service, and the lack of service or perceived indifference, more than anything has eroded client confidence. And this genie will not be going back into its box. With a tough 2020 coming and property prices more or less stagnant, costs will be key for agent survival and all outgoings including portal costs I think rightly will be under review.

From: Andrew Stanton Estate Agency Insights Strategies 12 December 2019 06:30 AM

Great words of wisdom James, especially going to a proptech event, I think it will really open a person's eyes in a good way to the possibilities and solutions out there. Also, I know there are a lot of property professionals who are unsure of Proptech, or maybe anti - what I would say is that Tech, cannot be ignored. It is a two prong movement. Clients adopt new tech and interact and buy things using it (web, smart phone etc), so agents need to keep up with this tech revolution going on in the customer sector, at the same time agents need to spend 10% of their budget on getting their tech working for them to stay competitive within the sector. I have clients who have a great single branch business, making 300K profit, with an established team and little tech apart from your CRM, and the CEO asks what need is there for worrying about the advance of tech? Well, even if you put zero £ in to your tech budget, in the next 5 years your new clients and customers who have stopped coming into branches already, will be buying and selling and renting and doing all the associated processes through emerging tech; you might be the 'best' agent in the area, but if your clients 'can not find you' to do business your tech savvy new agents will be eating your lunch. Some CEO's think I am being alarmist, but I say go to the annual Negotiator awards in 2020, and in the evening, when you look up at the winners screen, you will see time after time, companies that get the top spot are a new breed of agent, what they have in common is they are either adapters or new businesses that have just started and all have a digital heartbeat and proud owners or CEO's who get the shape of the future.

From: Andrew Stanton Estate Agency Insights Strategies 11 December 2019 14:55 PM

Property Pundit, I am getting an Alexa for Christmas so I can get Purple bricks results and also Housesimple, the great missed opportunity, is that tech is for sure coming, but, these lumbering online machines are not thinking straight, much like Countrywide, also a lumbering great machine, both have client and client data coming out of their ears, and if they used it, realised what the clients want or even dare I say predicted it using AI what the client of tomorrow wanted, they could build a real process around it. Instead all cash is being burnt just to keep the lights on. My solution would be with so many bright people sitting in proptech labs, mostly clustered around London, a simple call to them for help, might give the C-suite some really good strategies. The solutions are out there, grab them before the quickly dwindling cash in the bank disappears.

From: Andrew Stanton Estate Agency Insights Strategies 11 December 2019 14:29 PM

I had predicted some time ago that this might be a great strategy for the 'smaller' property professionals, faced with a stark choice, buy tech off the shelf, or invest all your profit in tech and develop your own system. The FIA strategy, join us and enjoy collective knowledge and buying power and have an exclusive area to do it in, is a really great concept, a bit like collective bargaining, without the hassle and at a low risk entry fee, and Homesearch certainly do have a an offering that adds value, insight and strategy, my favourite themes.

From: Andrew Stanton Estate Agency Insights Strategies 11 December 2019 14:17 PM

I only have sight of accounts to March 2018, which was a long time ago, but at that point, in the previous year they turned over 2.5M and made an operating loss of 13.5M. Or put another way, for every £1 they generated as cash flow it cost them £5.40. So, not a model making money. Since June 2019, they are doing the job of selling for free, so that lowers the cash flow coming in, but their pivotal strategy is to make profit by capturing data from buyers and referring people/data to the financial and conveyancing services sector, mortgages, insurances etc. What strikes me is that if you are running a company on tech and no physical offices, why is it costing £13.5M to run, and I assume that the cost in 2019 / 2020 will be North of £10M, so will the referral fee income cover that spend and some? I do not think it likely. Also, as only 12% of vendors see the fee as a factor when instructing an agent, I do feel that for 78% of vendors charging a fee is no issue - as long as the House Simple proposition is viable and results in good marketing, good service, excellent after sale agreed service and a seamless omni-channel experience for all clients, buyers and sellers. If the tech is merely a digitalization of the old model of agency, which is hardly seamless and often has major problems, and if there are not enough humans to hand hold the public - which is a key part of a property professionals core role, then even if you give the public the offering for free they may well vote with their feet and use the local agent with 4-sales people with 30-years experience each, who live in the area, and can give service that has a higher level of value.

From: Andrew Stanton Estate Agency Insights Strategies 11 December 2019 11:18 AM

I fear Christmas is not going to be festive season for the Countrywide Turkey, Why? Well, call me a party pooper, but last August Countrywide raised £125M, to keep afloat, and the Group Managing Director Paul Creffield stated in his company report in March 2019, 'Significant progress was made in 2018 as we reset the strategy and delivered a capital refinancing plan that gives us the stability and flexibility to execute our three-year turnaround plan' and now they are selling off assets to the tune of £38M. So that is £163M, in 16 months, does this mean a cash burn of £10m a month. If so, the famous 3 year turnaround, which is due to end in 2021, may mean that an awful lot more of Countrywide is pawned. Hamptons? John D Wood? And before anyone says unthinkable, the only thing that is unthinkable is that this great business has been allowed to go full steam ahead into the night without someone at the helm, looking at the horizon, like a certain ship which unfortunately foundered not quite 400 miles from Newfoundland. Get those lifebelts on and strike up the band, because it might be the company's last hoorah in its present form.

From: Andrew Stanton Estate Agency Insights Strategies 07 December 2019 18:42 PM

If you believe Proptech is the future within the property industry or not, what is inescapable is the need to know what your client wants and how they want to transact business with you. And now at last with the real cost of tech reducing, these answers can be found Proptech has been seen by some as a smorgasbord of solutions, pick the right one and your are in the winners enclosure, for me proptech is the synthesis that has come about because the property client of today wants an omni-channel, seamless, service driven model, not the model of agency that I came into back in the mid 1980's, which still proliferates. I agree, the whole model within the property sector has changed, there needs to be a collaborative and engaged and enlightened approach, where the property industry and the proptech industry become an equal marriage, as envisioned by James Dearsley and Eddie Holmes of Unissu and others. It is no coincidence that some corporates are in very serious danger, the reason, they had no insight or strategy to move their business model on. Clearly, everyone is doing business from the instrument I am tapping away on, and if I can understand it, then all property professionals need to, as it is no longer business as usual. I deal with a lot of extremely good property professionals, hugely experienced, well respected and running extremely profitable businesses, but, at a recent annual awards ceremony I was struck by the number of 'younger' and 'different looking' businesses with quirky dress codes and 'non-agency looking working places' and these were a sizeable section of the of the prize winners. So, if the old guard does not embrace change - sadly I think - they may well be outflanked by the data savvy new kids on the block.

From: Andrew Stanton Estate Agency Insights Strategies 04 December 2019 01:06 AM

Johnny cash on the money ‘ hurt’ is maybe a fitting swan song. Get into that c-suite, get the key to the executive loo, and get some 30 year olds in. This perspective is missing, planning your strategy on experience of 50 and 60 year olds has limited relevance in the omni-channel consumer experience that vendors and buyers, landlords and tenants expect. For the love of God it is the 2020’s not the roaring 20’s.

From: Andrew Stanton Estate Agency Insights Strategies 30 November 2019 01:46 AM

I think a key element here James, is that for you, being involved in the marketing mix is fun and second nature, over the past years many vendors leave the selling and marketing to ‘agents’. Not saying this is good or bad, but usually vendor is a passive passenger strapped in for the journey, which sometimes is pleasant, other times not so. On the tech front, yes, for sure massive gaps here, and Rightmove how many millions have they got to get this right for all agents. It will be great to see how your journey turns out.

From: Andrew Stanton Estate Agency Insights Strategies 29 November 2019 07:51 AM

Good luck with this, a niche idea, based on a large market, major problem is getting the public to know the portal exists, usually a multi-million pound campaign is needed. With an ageing population for sure they are a great equity rich generation, but, it may be the case that to find this helpful new portal is not so easy.

From: Andrew Stanton Estate Agency Insights Strategies 29 November 2019 07:44 AM

As predicted a sale of the assets, all it will do is prolong the agony. This was a beast of the industry now it is dazed, and licking its wounds waiting for the end, a real shame. It’s only hope is that the Tesco faction can put a strategy together in time to stop a full scale rout. Unlikely, the cash burn is far too high.

From: Andrew Stanton Estate Agency Insights Strategies 29 November 2019 07:22 AM

A flipside, to the debate of having millennials in your workforce, (and lets face it as a millennial could be 39 years of age, you definitely have some of them), is the way that the millennial 'buyer' and the even younger and more tech savvy GEn-Z buyer is changing the whole property game. I fully embrace the need that millennials have for a quick omni-channel response to everything, including the sale and purchase of property and all the processes in-between. However, I am a little nervous that the millennials unstoppable appetite for services and goods, instantly at the click of a button, is now driving the property sector too fast and too hard. Clearly, many companies are now being set up to feed a new type of savvy, consumer, but, the danger in the property sector is the lack of maturity in some of the business models. For example, iniatives like Mojo Mortgages, may well be on trend for these clients a fast track way to get a financial mortgage advice, but, they in turn are reliant on a tie up with Monzo bank, which itself is a new fintech / Proptech company with no high street presence, whose origin can be traced back to Crowdcube, (another recent online fintech company) and an instantaneous crowdfund of over £1M. Since then Monzo has had further injections of capital, and its valuation has skyrocketed, but, so too have the number of issues regarding its service and security, all documented in the financial press. These may be teething problems or not, time will tell. I suppose what I am saying is that – at the very fast rate that some things are changing in the ‘traditional' world of agency – many co-operations and inter company collaborations are sometimes founded upon organizational foundations which are less than five-years old. And this lack of tried and trusted maturity, can cause problems, if any of the ‘jenga block’ partnerships fail to deliver and need to be removed, and it is often the poor shareholders and users of the service who are the losers. Recent Fintech peer to peer lenders like ‘Lendy’ failing with over £160M of losses, may be in a different financial sector to mortgage business regulated by the FSA, but, with Metro bank also in the doldrums, what they had in common was they sought to be disruptors of the banking sector, instead they may well be the victims of it. I am all for change, and making the transaction of property a better, quicker and faster and more enjoyable path. Having previously been an estate agent for over 30-years I often dreamt that there must be a better way of doing property. With the proptech revolution in full swing I am sure the industry will get there - but the irresistible force of the millennials and Gen-Z with their needy, challenging and inquisitive mindset, may well be as much a help as a hinderance, until a new and tested pathway of what 'new estate agency' looks like in the 2020's and beyond becomes established.

From: Andrew Stanton Estate Agency Insights Strategies 25 November 2019 21:44 PM

Property Pundit, it is not so much a race to the tape for property portals to allow self listing sites, it is more that month by month consumers are becoming more and more dashboard kings and queens, able to view transactional progress in real time. So, the sale and purchase of one's largest asset, why would you not want to be in pole position for that? I think the portals would love to keep the status quo, but the ever savvy, tech guzzling millennials and even more demanding (and why not) Gen-Z are not going to 'walk' into high street agents to do business, or solicitors offices, of banks or building society's to do finance, if they can do that journey on their phone/dashboard on their phone. As to why it would take off? Well, the tech and the will is now here, encrypted contracts, the conveyancing world being challenged to speed transactions even Land Registry is getting on board - a sign that a big change is coming.

From: Andrew Stanton Estate Agency Insights Strategies 23 November 2019 15:22 PM

Now I am not sure what the imminent installation of Andrew Fisher means for the future of Rightmove. Here is an extremely intelligent, team player, who is modest and to quote him, 'My specialty has been helping develop and drive the adoption of new technologies to hundreds of millions of people, and my ambition is to help others to continue to do this and encourage them to believe that they can have a positive impact on a global scale.' Now although Andrew's background academically was not tech, the phenomenal success he had with Shazam, the app that apple can not get enough of, begs the question - is he going to steer Rightmove down the path of 'vendors' using apps to self list, or develop better tech for property agents? Time will tell, but with a very healthy bank balance it will be interesting to see what creature Rightmove turns into by the year 2025.

From: Andrew Stanton Estate Agency Insights Strategies 22 November 2019 18:22 PM

Which parts of the Purplebrick model are you alluding to David, that has moved the industry on? The 90M it burnt through in its last trading year, the 52M loss it made during the same period, the 'self-employed' LPE's who have no other work but to work for Purplebricks, and so have no holiday pay, sickness cover and are liable for any compliance issues, or is it the pay upfront sale or no sale model that you particularly like? Purplebricks certainly is a Behemoth in the world of Proptech, but it is more a Frankenstein monster created in a Tech Lab, than a useful addition to the industry, its starting premise is all wrong, how do we create a company that has a massive cashflow at the front end. I talk daily with lots of people in the Proptech world, and they are revolutionising the whole thing, they have true vision, they are not just digitalizing the whole system, they are re-crafting it, making it fit for purpose. If you want to praise anything for the advances in the industry I would start with the brave bankers, investors and private individuals who are backing the real tech revolution, not some frightening giant monster which is casting a purple shadow.

From: Andrew Stanton Estate Agency Insights Strategies 21 November 2019 17:13 PM

With 40% of the rental market being housing associations, a very astute tweaking of the model, also I never knew that the top boys did not have a property background, maybe that is why they did not see the ‘barriers’. The point you make James about having success or at least massive funding to continue a success, and then going full throttle to dominate the world overnight is a sound one. As another proptech behmoth found to its cost when Purplebricks burnt through 90m in its last financial year, much of it lost on overseas expansion and then recapitulation. Do you think that sometimes big investment, is as much a problem as a help, because investors want returns, but sometimes tech companies are really good in a smaller niche and the model is not world defining. Good to hear they are in it for the longhaul, also the short incubation period shows that the proptech sector will be the dominant noise and deliverer of very real solutions in the industry.

From: Andrew Stanton Estate Agency Insights Strategies 20 November 2019 07:02 AM

The ultimate endgame model will be vendors self listing, it is just a race to see who blinks first, which of the big two Property portals allows this in the UK. My thoughts as stated any times will be that Zoopla goes first with model, as they charge agents a lower fee and agents would be more easily persuaded to continue listing alongside vendors. For Rightmove it would be the straw that breaks the camels back. Timescale 36-months and counting. Simon is very correct that Rightmove has been siting on hands and not pushed Rightmove into other communication mediums, not sure if this is pre-meditated or part of a plan.

From: Andrew Stanton Estate Agency Insights Strategies 19 November 2019 07:49 AM

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.

From: Andrew Stanton Estate Agency Insights Strategies 19 November 2019 07:26 AM

Actually, the industry is getting ever nearer to legally binding exchange of contracts at the click of a button. That is a reality. The only question is - will it be the accepted model adopted by all? And if so will it lead to vendors selling direct to buyers, with estate agents becoming listers, and after that have no real role. Everyone knows that you can buy at auction by bidding online and then unconditionally exchanging on a property. Yes, it would be sensible if the buyer had viewed the property, downloaded the legal pack, engaged a solicitor and had a survey, but, if in a financial situation where funds are available a buyer can today exchange if registered with the auctioneer and has the means to complete. Offr and other Proptech solutions are narrowing the field, and even though I was an agent for over 30 years, and have dealt with thousands of sales, I personally feel very comfortable with the concept of a more click and buy process, which is becoming the inevitable end game to the property game of chess that has been playing out for the last decade. It is all around you the Millennials and that means anyone 39 years and younger, and the Z - generation who are the next in line, do not go to shops, do not go to estate agents, they connect using mobiles, I-pads, computers, and maybe 5 different ways of communicating, they are not going to wait for anything, they demand like an advancing army of smart ants, an omni-channel experience, seamless, and fast. That is why so many businesses in all sectors are struggling, and the big challenge here is not will this become the model, but, will solicitors adapt or become obsolete, will land registry ever get itself truly digital and digitalized, because the Fintech sector has already got all the solutions for instant mortgage or property funding, due to being an early investor in the tech sector.

From: Andrew Stanton Estate Agency Insights Strategies 18 November 2019 12:57 PM

Kristjan I think you would cry if you knew what the lowest rate that an agent pays with Rightmove for the volume of business you do, perhaps you should ask them. And if they tell you, ask why you are paying a great deal more - my thoughts are you will not be told the lowest rate for 'commercial and GDPR reasons'.

From: Andrew Stanton Estate Agency Insights Strategies 15 November 2019 17:18 PM

Hi Andrew, I am not sure that Emoov Mark II would want to acquire the reputation of the previous incarnation of Emoov, or the Trust Pilot reviews that are currently displayed, belonging to the old or new Emoov. Which are still being displayed despite assurances to the ASA and myself a fortnight ago that they would be taken down. And I quote one of the Trust Pilot reviews dated 28th Oct 2018 (so previous Emoov) 'Emoov has failed to deliver the service I have paid for. As it stands I am 10K out of pocket ... the bidder thought we were not interested in their offer and bought another house. (They) did not call the highest bidder to confirm acceptance of offer as we requested ... Watch dog contacted regarding my complaint' 6th Dec Trust pilot review 'Emoov has gone into administration … so don't bother using their website which is still live'. In fact under the new ownership as of 24th of Jan, Emoov II seems to be following in the footsteps of the original company, Trust pilot 24th Jan 2019 - 'Run by clowns, they feed you a bunch of lies. Horrible communication. Have no idea where the positive feedback comes from, very suspect. Do trust pilot delete negative reviews?' As an observation - it does seem strange that if you were looking to generate new business - you would populate your own website with such reviews, unless of course your business model was to lose money. Especially if you had the ASA breathing down your neck, maybe the ombudsman might take an interest.

From: Andrew Stanton Estate Agency Insights Strategies 15 November 2019 17:02 PM

IS RIGHTMOVE MAKING THE WRONGMOVE? First published 22nd October 2019 There are many agents grumbling about the way Rightmove is treating them, and some commentators have actually used the term abused. This seems a harsh term but looking more closely - the real possible abuse that is arguably at play, is the fact that Rightmove possibly charge agents different amounts, for the same service. So a new agent that wants to use Rightmove, pays more than an existing client for the identical service, and though it would seem sensible to discount to a multiple branch enterprise, many agents would be staggered at how little some agents in their town, village or city are paying, when they are paying substantially more for the same service. Now Rightmove can use any model they choose - if agents are unhappy - well they can choose not to list on Rightmove, but this economic advantage/disadvantage plays fast and loose with agents who are at present under considerable financial pressures. Maybe agents should set up an anonymous forum and post how much they are charged per branch/office and what level of service they are provided, I think this would be enlightening for all. No-one minds paying for a product or service, but some argue that the many customers at Rightmove may be subsidising the minority. Personally, I think that within three-years Zoopla who are re-aligning their model and who are substantially cheaper than Rightmove, may well offer 'self-listing' for the general public. As one of the online property portals jockey for market share and domination. Given the cost, I think many agents would 'eat' the fact that they are listing on a site with the 'self-listing' general public, as Zoopla's cost base is much lower than Rightmove. If Rightmove tried to launch this iniative, it would possibly cause a rebellion as agents would not want to pay a premium rate and compete with self-listing vendors. Estate agency, and by this I mean the whole property sector - is undergoing a period of change, just as other industries are. New technology is pushing this along and the customer or consumer is king (or queen) once again and they want service at the click of a button. And if enough of them want to market their own homes, because it is easy (obviously I know it is anything but easy) then this sentiment may change things. Lastly, the imminent departure of Scott Forbes , the present Chairman of Rightmove, who has been in place for nearly a decade and a half, may be the sign that things may not stay on the up for Rightmove for ever. Maybe, producing profits of over 65% a year, can not be sustained, especially in the property sector where many agents are trading on a margin as low as 3 or 4%, and in some cases a serious minus number.

From: Andrew Stanton Estate Agency Insights Strategies 15 November 2019 10:25 AM

It’s good to see graham that you read my posts on this subject, maybe this is the start of agents becoming a collective and getting a portal price that is fair, rather than late joiners bearing the cost for multi branch corporates. I somehow feel that you will not be getting too many CEO’s giving you the rate they pay, maybe there is need for a website where agents can post there charging rates, that would really get the momentum going, perhaps OTM will be seen in a new light, no-one likes to pay over the odds or subsidise the costs of competitors.

From: Andrew Stanton Estate Agency Insights Strategies 15 November 2019 09:15 AM

Well hopefully not - you see Axel will take them private and they will hoover up the vendors who want a cheaper fee and sell in the 230 - 270k price range, in large towns and cities, there is a place for the model. If they change the model, they might have something, but the fees need to be much higher and instead of just listers LPE's they need SELLERS - which means more cost to the business even if it is 'self-employed' status and off the balance sheet. Also, they have done millions and millions for no return, if they had used it to build a Proptech solution - not a digitization of the traditional agency model they might have made, but a system that made the sale journey easier, and quicker, rather than the model they have, where vendor and buyer are almost a peripheral afterthought, rather than prime drivers.

From: Andrew Stanton Estate Agency Insights Strategies 14 November 2019 10:31 AM

It's me I am back again, I have just had a look at Purplebrick's annual accounts, and they have gone from their last year end April 2018m 152.8M cash in the bank to only 62.8M cash in the bank in April 2019, since which time they have had some hefty bills to pay to close down operations overseas. So that is a 90M burn in a year, which given they had income from upfront fees of probably 100M plus is not good news, that's a burn of 7.5M a month, I bet the executive toilets are made out of gold. Also, and I find this fascinating the way the company sets out its spreadsheet, Revenue 136.5M, cost of sales (56.6M), gross profit 79.9M, gross profit margin 58.5%, BUT THEN THEY ADD IN ADMIN AND MARKETING COSTS admin costs 61m, marketing costs 70.7M, and we get the operating loss of 52.3M. Call me stupid and many do, but the admin and marketing costs (Purplebricks adverts on multi-media, all the head office staff costs) are costs before any profit, just as in a traditional agent where you have income, expenditure and gross profit, you do not record a profit in the accounts and then add in the incidentals like your 60% staff costs or your advertising budget of 15%. Maybe, Purplebricks shareholders are not familiar with balance sheets. With only 60M in the war chest it will be interesting to see the interim accounts mid December and the full accounts next April, I think that mountain of cash at the bank may well be down to 20M, and then we will see if Purplebricks wins any golds at the Olympics.

From: Andrew Stanton Estate Agency Insights Strategies 14 November 2019 10:11 AM

It's me I am back again, I have just had a look at Purplebrick's annual accounts, and they have gone from their last year end April 2018m 152.8M cash in the bank to only 62.8M cash in the bank in April 2019, since which time they have had some hefty bills to pay to close down operations overseas. So that is a 90M burn in a year, which given they had income from upfront fees of probably 100M plus is not good news, that's a burn of 7.5M a month, I bet the executive toilets are made out of gold. Also, and I find this fascinating the way the company sets out its spreadsheet, Revenue 136.5M, cost of sales (56.6M), gross profit 79.9M, gross profit margin 58.5%, BUT THEN THEY ADD IN ADMIN AND MARKETING COSTS admin costs 61m, marketing costs 70.7M, and we get the operating loss of 52.3M. Call me stupid and many do, but the admin and marketing costs (Purplebricks adverts on multi-media, all the head office staff costs) are costs before any profit, just as in a traditional agent where you have income, expenditure and gross profit, you do not record a profit in the accounts and then add in the incidentals like your 60% staff costs or your advertising budget of 15%. Maybe, Purplebricks shareholders are not familiar with balance sheets. With only 60M in the war chest it will be interesting to see the interim accounts mid December and the full accounts next April, I think that mountain of cash at the bank may well be down to 20M, and then we will see if Purplebricks wins any golds at the Olympics.

From: Andrew Stanton Estate Agency Insights Strategies 14 November 2019 10:09 AM

If tracksuit Vic, is correct, and his company sells three times as many properties than any other agent - why has the company made ‘a full-year operating loss of £52.3 million.’ this year? Vic is a little prone to throw away lines - 'the company is not for sale’, just at the point Axel Springer is likely to take the company private. Maybe the three times was just another off the cuff comment. For me, and I have been crusading on this point for two years, is what is the conversion rate of listings to exchanges? I have read Purplebrick's company statements in the past boasting of a 73% and the 81% conversion rates, but no proof. The reason this is important to know is that in a pay upfront model, sale or no sale, if half your clients get no exchange on their property - shouldn't that be something that Vic talks about. I even offered a £1,000 of my own money for anyone from Purplebricks to prove this 81% conversion rate, not a single taker. Why? because I feel it likely they complete on average on every second property they list, in line with industry norms. My proof - click on rightmove today - see how many Purplebrick properties are listed for sale and how many are sstc - the ratio around 50%. Is this a true figure well, given that 28% of the sstc will fall through and rightmove keeps sstc on site for a number of months, any skewing of data about balances out. Put it this way, if you were selling 80% of your stock then around 80% of your stock on rightmove would have a sold sticker on it - that is not the picture I can see. I am more than happy for someone to prove me wrong, any takers?

From: Andrew Stanton Estate Agency Insights Strategies 14 November 2019 09:38 AM

Rightmove may well be out of step and be seen as the Wrongmove. There is definitely dissent being muttered by many of my clients, with many agents grumbling about the way Rightmove is treating them, and some commentators have actually used the term abusive when describing their relationship with the portal. This seems a harsh term but looking more closely - the real possible abuse that is arguably at play, is the fact that Rightmove possibly charge agents different amounts, for the same service. So, a new agent that wants to use Rightmove, pays more than an existing client for the identical service, and though it would seem sensible to discount to a multiple branch enterprise, many agents would be staggered at how little some agents in their town, village or city are paying, when they are paying substantially more for the same service. Now Rightmove can use any model they choose - if agents are unhappy - well they can choose not to list on Rightmove, but this economic advantage/disadvantage plays fast and loose with agents who are at present under considerable financial pressures. Maybe agents should set up an anonymous forum and post how much they are charged per branch/office and what level of service they are provided, I think this would be enlightening for all. No-one minds paying for a product or service, but some argue that the many customers at Rightmove may be subsidising the minority. Personally, I think that within three-years Zoopla who are re-aligning their model and who are substantially cheaper than Rightmove, may well offer 'self-listing' for the general public. As one of the online property portals jockey for market share and domination. If you look at other countries, agents do list against self-listing vendors on main portals it is just that at present the UK does not. Given the cost, I think many agents would 'eat' the fact that they are listing on a site with the 'self-listing' general public, as Zoopla's cost base is much lower than Rightmove. If Rightmove tried to launch this iniative, it would possibly cause a rebellion as agents would not want to pay a premium rate and compete with self-listing vendors. Estate agency, and by this I mean the whole property sector - is undergoing a period of change, just as other industries are. New technology is pushing this along and the customer or consumer is king (or queen) once again and they want service at the click of a button. And if enough of them want to market their own homes, because it is easy (obviously I know it is anything but easy) then this sentiment may change things. So, maybe the real battlefield is not the annual rise in subscription to Rightmove and their 60% profits each year, it is making sure that your agency is adopting the new wave of proptech tools and systems to future proof your business. Yes, Rightmove is causing a chill out there and agents are cooling towards them, but there may well be a far colder arctic winter coming for agencies who wait too long to prospect the new way of doing business. Which will be high levels of face to face service backed by technology which allows an omni-channel service to the ever demanding general public, who are turning their backs in droves on businesses based on old trading models rooted in the last century.

From: Andrew Stanton Estate Agency Insights Strategies 12 November 2019 06:43 AM

Maybe some people feel that the day will just be a talking shop, but I will be listening to find out the direction of play within the property community. It is very rare to get all of these polymaths under the same roof, and their views are just that - views to excite debate and move things on, especially as the landscape of agency is changing. Bercow is my local MP and I have met him, and he is a straight talker, so taking politics out of it - I am sure he alone will be a class act to watch and listen.

From: Andrew Stanton Estate Agency Insights Strategies 12 November 2019 06:27 AM

Will there be tax-breaks for this innovation?

From: Andrew Stanton Estate Agency Insights Strategies 07 November 2019 12:13 PM

Perhaps, Graham agents need to get on board with this and realise that Proptech is already in their business, and is not going away and is a power for good. Reapit have decided they want to be very much in the mix of what is about to evolve, and yes it is a risk, but doing nothing also could in 24-months see them isolated. Gary Barker is a brave man, and it will soon be 2020, and the increasing customer base of Millenials and Gen Z, will even more want a quicker level of service, value for money and everything at a tap of a button on their mobile. Perhaps the 'Apps store' will move this forward?

From: Andrew Stanton Estate Agency Insights Strategies 07 November 2019 12:11 PM

James I totally agree with you; companies who stand still wither, often companies who would most benefit from your expertise feel want you to 'perform' like a novelty act, rather than embracing the opportunity to make their company more profitable, and the Proptech revolution is all around and is an undeniable force for the future. So, it is not a case of deciding to be part of it - all agents are part of it - they just need to decide if they are going to welcome in the technology and strategy that exists, or build the barricades and hope that it will be business as usual. Perhaps, the biggest point you make is - just do something - as you can always tweak the decision later, the biggest mistake as a certain large corporate agency is finding, is to give out soundbites that they have a three-year plan, and the plan is to change nothing and hunker down in a bunker.

From: Andrew Stanton Estate Agency Insights Strategies 06 November 2019 11:29 AM

Hi James, how does the reporting stink? If you read all of the documentation on the case, it goes like this, Countrywide between 2008 and 2018 had in place a policy agreed at CEO level to keep the money in the company account, all 10M of it. Paul Creffield when alerted to it, fully co-operated with the RICS investigation, but - Paul Creffield did not become CEO discover the deceit and report it as a whistle- blower. No it was an outside audit that picked up on the situation, which if let undetected may well have continued. In fact if you look closely at Paul's statement in mitigation he seems very much to make the case that because Countrywide does billions of pounds worth of mortgages a year, have a massive RIICs prescence, and has a huge 800 (?) strong office presence with many branches in all the towns and villages, it would be a travesty if Countrywide were too badly damaged by the affair as it would possibly upset the property industry as a whole. (TOO BIG TO FAIL). In other words - Countrywide had in place by its own admission a questionable practice, the internal transfer of client funds, which was company policy. Then by chance an outsider found out about it, and of course if your are the CEO of the day you are going to be as helpful as you can, but I think that to play the card of TOO BIG TO FAIL, is a dangerous one, because if Countrywide is founded upon financial services and has within in very notable and trustworthy RICCS personnel, shouldn't the bar be set higher rather than lower, as a warning to all. The panel in their judgement under mitigating and aggravating matters, actually states that Countrywide were using the fund to inflate their profit provision. As a matter of balance I am told by those who know that Paul is a very good at what he does, but I wonder if the matter had not come to light, would anyone at Countrywide have seized the nettle. Also where does the leave the likes of former CEO's Amanda Platt for example, and the auditors and the Chief financial officers? You may not think it but I actually love Countrywide, it is just a shame that all the talent was sacrificed during various regime purges, maybe they should invite some of those who can do the job back, as I feel unfortunately there are other icebergs about to present themselves in front of HMS Countrywide.

From: Andrew Stanton Estate Agency Insights Strategies 05 November 2019 12:39 PM

Any measure to reduce failed sales is to be embraced including reservation fees, which many in the industry have seen before. Fundamental buyer’s remorse though is a harder thing to overcome, and no study has been done to quantify this factor and there seems little chance to remove it from the property sale equation. On the positive, due to advances in the proptech arena, companies like Offr are putting together solutions to minimise both the period of time taken to get to exchange, whilst equally as importantly having buyers fully qualified at point of sale, and the property pre-packaged conveyancing wise, with a fully transparent offer process leading into a seamless post sale agreed process where vendor seller and the agent and the conveyancing process is front and centre. It is not a criticism but a sad reality that many agencies have become front loading, win the instruction, list it, sell it to a buyer, send out the memo of sale, and then... there seems often - a black hole of nothingness for weeks, and it is at this point the sale process is at its weakest and the fall throughs occur. RoPA are keen to see the fuller adoption of pre-conveyanced property prior to point of sale, some may mutter it is HIPS mark 2, but the difference is with proptech innovations which were not around before, far from hindering the sale process, motivated vendors can meet motivated buyers, on a business model where an omni channel approach of accountability means that post sale being agreed there is no longer that mysterious black hole where nothing seems to be going on. With dashboards, and mobile phones, the stakeholders in the sales, the agent who carries the cost of aborted sales, the vendor and the buyer and the conveyancer who also have to absorb lost costs when sales fail, will actually in real time be interconnected, rather than sitting waiting for ‘something’ out of their control to happen. Whilst not all sales can be saved, pre- qualification of buyers, and pre-registration of properties, and an integrated, interconnected and transparent process which the agent and the other stakeholders are equally a part of, may well with the new technology that the millennials and generation z take for granted, move the industry away from the old model. A model where agents sell property, solicitors do the legals, to a more enlightened, transparent and collectively biased process where all parties board the train at the same point and have a ticket to the same destination. Now that is a train ride that most estate agents whose margins are being squeezed would definitely like to be on.

From: Andrew Stanton Estate Agency Insights Strategies 05 November 2019 06:36 AM

Is it time that Countrywide got rid of its rotten apples. Back in August 2018 Himanshu Raja - Chief financial Officer at Countrywide, was until it was voted down to receive £7M of company shares, and Paul Creffield Group GMD was to receive £8M of shares. This was at a time that the scandal of the £10M funds was known to the company, but not disclosed to the shareholders. Then in early Spring 2019, Countrywide were fined £215,000 for Anti Money Laundering lapses, and now they have been fined another £100,000 for financial irregularities. Given that Mr Creffield is himself fully supportive of RoPA, and a single regulator. Is it not time for him and Himanshu to do the honourable thing? Two months ago Mr Creffield when asked about RoPA said, … 'We're really supportive of regulation because we believe it will help create a level playing field with all agents expected to have the same expertise, It'll be good for the consumer too.' More worryingly for all parties, including perhaps Baron Best who heads up RoPA is Mr Creffield's further comments regarding RoPA, ' Because of Countrywide's scale, we've been consulted frequently (by RoPA) on proposals during their preparation, and we've conducted some pilot projects.' Now if the new regulatory framework that a forthcoming government may back comes into being in the form of RoPA, should some of its architects be coming from Countrywide's top management team. For me they would be the last people I would look to. If Paul Creffield advocates root and branch industry regulation - then Countrwide should itself be a beacon of this industry change, at present it is a bonfire of vanities, which given the proximity of November the 5th is very apt. Matches anyone.

From: Andrew Stanton Estate Agency Insights Strategies 30 October 2019 19:11 PM

Liquidity of the company or not is certainly a factor for shareholders, though at less than 4p a share for some time I do not think many people have been buying CW shares. The equally disturbing factor is the lack of governance - and what have the financial officers of the company been doing - or not doing? With a multi-million pound rescue cash injection last year, a great chunk of which has been eaten through with monthly running costs of this great lumbering beast, when the 10M is subtracted from any 'cash' at the bank - will Countrywide have to 'sell the silver' to raise capital to continue trading? For me it is a race against time, sell off assets and cut offices, or wait and the costs of running the business will eat you and the assets and some offices will be sold or rebranded. Though I am not sure who apart from the incumbent staff in the form of a MBO, would want to buy the company as it clearly will not be making profit anytime soon.

From: Andrew Stanton Estate Agency Insights Strategies 30 October 2019 08:05 AM

Over half a billion pounds spent / invested in online agents in the UK. Profit ZERO. Reason - the cost of capturing a new client and running the online model costs 23% - 32% more than the fee being charged. That is why Purplebricks have just hiked their fees up by another £100 a unit, closing the gap between online fees and traditional fees. All online agents continue off the back of upfront fees and referral fees, sale or no sale, those online agents seeking no fee or no upfront fee will be out of cash within 12-months. Traditional agents are still mainly going down the no sale no fee route. Personally if I set up again today, I would go the 'charge the client for the service provided' route with regular monthly payments for work done so far. £x for listing, £x for exposure on websites, £x for viewings, £x for agreeing a sale, £x for qualifying buyer, £x for dealing with sale up to exchange - which in terms of hours is most costly part of process, £x for exchange, £x for aborted sale. So as the weeks tick on - the vendor is incentivised to reduce price, if the property has been fully and professionally marketed without a buyer being found. This would mean agents could charge 'lower' fees as they would be invoicing all vendors, rather than just invoicing the 50% of vendors who get to exchange and building in the cost of the 'other' property that they marketed but failed to sell. Eg, you list 10 at £400,000 at 1% = 10 x £4,000 potential fee or £40,000. You sell subject to contract 7 and 2 fall through before exchange, so you invoice 5 at £4,000 = £20,000. So you have shouldered the cost of marketing the other 5, and got no money from the vendor as a fee. In the alternative version you list 10 at £400,000, and you charge all 10 a fee based upon the work you actually carry out. 12 viewings, one aborted sale and then a re-sale, 30 hours of sales progressing etc. Five sales go through and five do not, but because every vendor is paying something then the fee to all could be less, so instead of 1% payable to the 5 who exchange, you charge in real terms 0.6% to all 10, so that is 10 x £4,000 x 0.6% = £24,000 income in and each vendor as an average is paying 40% less than the a 1% fee. Happy vendors and more income in, as well as a steady income flow, if all vendors are billed on a monthly cycle, much better than waiting five months for a fresh instruction to become a paid for invoice.

From: Andrew Stanton Estate Agency Insights Strategies 30 October 2019 07:48 AM

I mentioned Vic Darvey CEO of Purplebricks who is a very bright man, and so I thought it right to show some balance on pay upfront online models. But, when he says things like the company is ‘not for sale’, or the company is going to change how it charges customers - the question I am going to ask is … Is Vic there? As I think he might be a little light on strategy. For me, the only great thing about Purplebricks for investors in its shares, was that on paper it seemed to be the mother of all cash cows. It appeared, and that was always the illusion, that with a positive cashflow from upfront fees, that it would once established make huge profits, without a costly bricks and mortar empire of offices, populated by expensive employed staff. The truth, now the smoke and mirrors are no more and the business model is clear for all to see, is that you can strip out the staff costs, the managers the negotiators etc who sell property and just have listers (even better if they are self-employed), but if your business campaign runs on a multi-million pound spend on television, web, radio and every media medium – it does not matter how much cash you are getting upfront, if the spend per unit listed far exceeds the cash you get in. Close scrutiny of the annual accounts of Purplebricks show a worrying conclusion that gross profit runs at about 45%, but when ‘marketing costs’ and ‘admin’ costs are added in that 45% gross profit becomes a negative figure. Purplebricks were closer to making profit when their turnover was 50M plus, they made a 5M loss. They then bragged that when turnover doubled, they would hit profit. Instead the 5M loss grew into a multi-million loss. The only thing keeping the Purplebricks empire afloat is the model of cash upfront, win or lose for the vendor. This pays the Local Property Experts and covers some of the costs of the business. If Vic feels that he is going to change the model, the cash input will dry up, and if the company has to wait 5-months for properties to sell and complete, from point of instruction, those multi-million monthly costs will eat the company and Vic alive. Perversely, I am not a luddite, I like new technology, and online agents (in concept) but I think that proptech should deal with the backroom stuff, as it does for many online and traditional agents. Allowing estate agents to have more time to be agents, to spend face to face time with clients, rather than be a replacement for them.

From: Andrew Stanton Estate Agency Insights Strategies 29 October 2019 16:54 PM

Peering through the smoke and mirrors, this is an average upfront fee model of £1,039 (if there are 10 viewings) per listing. Plus referral fees on top for I assume conveyancing and finance. The 140 sales is an irrelevant figure, as the business runs I assume on instructions and upfront fees. So, 140 sales is probably 200 listings in 6 months (140 = 70% of total listings the rate of unexchanged sales generated). That is 33.3 instructions x £1,039 = £34,598 + referral fees, approx. £11,500 = £46,098 income a month. Or £553,176 per annum income - not profit. Costs - 25 members of staff, average salary £25,000, plus car or car allowance plus taxes etc, £687,000 a year. 40 outsourced staff, average £8,000 a year, £320,000. Total £1M. Typically wages = 60% of company costs, so running costs for all other parts of company will be another £665,000 a year. So total costs a year for company to break even are 1.65M, or £137,500 a month. To break even - at £1,384 a unit, they need to list 100 a month, at present they are listing 33.3, so they need to triple their instructions to break even (and that is without paying any of that 1.2M back). The other kicker is that the pay upfront model - has failed - even Vic at Purplebricks has seen that the general public will not do repeat business if they pay in advance and get no sale, and have to pay twice with a second agent who charges on results / exchange of contracts. Especially as in the industry agents on exchange on half of their stock. I assume and it is not clear in the piece - that Imovehome is a pay up front and pray model, rather than a pay on results model, if not - well an awful lot more than 1.2M is going to be needed to be injected in the coming months. Even if you could triple your through put of instructions - what else will increase? - yes you got it - staff costs and running costs, so the break-even will be in excess of 2M, which means no profit ever.

From: Andrew Stanton Estate Agency Insights Strategies 29 October 2019 16:37 PM

I am with Trevor, back in the day, in the mid-1990's once a sale was agreed, we would get the vendor and the buyer to attend a meeting in the office and discuss the sale, including estimated timescales for key events, including a likely exchange date. We would then get the parties to shake hands and send out the minutes of the meeting, to all parties including both solicitors, with the memorandum of sale. Often we would get solicitors on the telephone suffering from apoplexy, and we would say that the minutes reflected the wishes of the parties and we were hopeful they could comply, especially with the time-frames.

From: Andrew Stanton Estate Agency Insights Strategies 22 October 2019 09:37 AM

Is Vic There? Maybe not for long?

From: Andrew Stanton Estate Agency Insights Strategies 22 October 2019 09:27 AM

Does this mean a 'buyer' can make an offer - and the vendor then receives the offer. But, the buyer has not be qualified in terms of ability to proceed, etc. So, potentially the vendor receives a bid at 750k full asking price, only to be told later by the agent that the 'buyer' has a property to sell not yet on the market. Also, is the viewing feed-back going to non-filtered? I ask this because honesty may be the best policy, but if the vendor is offended by the brutal reality that their lovely cottage smells of damp and the 40-year old bathroom needs to be ripped out - it could make the vendor want to change agents. Sometimes a more tactful - it was not for them - keeps all parties happy. Maybe the agent could trial the vendor and the viewer swapping each others mobile numbers and emails, this would speed things up? From experience that would be an interesting whit knuckle roller-coaster ride …

From: Andrew Stanton Estate Agency Insights Strategies 22 October 2019 09:20 AM

Whilst I respect Iain's viewpoint - the real possible abuse that is arguably at play, is the fact that Rightmove charge agents different amounts, for the same service. So a new agent that wants to use Rightmove, pays more than an existing client for the identical service, and though it would seem sensible to discount to a multiple branch enterprise, many agents would be staggered at how little some agents in their town, village or city are paying, when they are paying substantially more for the same service. Now Rightmove can use any model they choose - if agents are unhappy - well they can choose not to list on Rightmove, but this economic advantage/disadvantage plays fast and loose with agents who are at present under considerable financial pressures. Maybe agents should set up an anonymous forum and post how much they are charged per branch/office and what level of service they are provided, I think this would be enlightening for all. No-one minds paying for a product or service, but some argue that the many customers at Rightmove may be subsidising the minority. Personally, I think that within 3 years Zoopla who are re-aligning their model and who are substantially cheaper than Rightmove, may well offer 'self-listing' for the general public. As one of the online property portals jockey for market share and domination. Given the cost, I think many agents would 'eat' the fact that they are listing on a site with the 'self-listing' general public, as Zoopla's cost base is much lower than Rightmove. If Rightmove tried to launch this iniative, it would possibly cause a rebellion as agents would not want to pay a premium rate and compete with self-listing vendors. Estate agency, and by this I mean the whole property sector - is undergoing a period of change, just as other industries are. New technology is pushing this along and the customer or consumer is king (or queen) once again and they want service at the click of a button. And if enough of them want to market their own homes, because it is easy (obviously I know it is anything but easy) then this sentiment may change things. (E-A-I-S)

From: Andrew Stanton Estate Agency Insights Strategies 22 October 2019 08:40 AM

I think that Adam Day is and was a giant in the way he thought about agency, he was the torchbearer for a new type of estate agency, and it saddens me that he is now recruiting people who in about 16-months will possibly find they have poured their money into the eXP adventure, with a nil return. Can I back this up? Well, the industry has four main models (with some variants), model one,self-employment, set yourself up and work for yourself possibly employing staff . Model two - corporate agency/or independent agency where you work for the 'boss' - this can be very lucrative and is low risk, many earn more than self employed estate agents running their own show. Model three - franchise agency, pay a lump sum to join the club, then a percentage of turnover (not profit) every year to be part of the group, in return receive training, CRM and have red tape dealt with. Model four - Umbrella - a hybrid of the franchise system, a quasi-franchise/self employment. To my mind and I know there are many exceptions, the winners in these models are - franchisors - they are taking a constant amount of money regardless, if franchisee fails they get another to fill the space. Employed people, they get job security no risk of their own money being lost - yes they can lose there job, but re-employment is very easy in the agency sector. Then and it is more tricky to say who are winners - the self employed can be real winners - but they can be losers, if not financially they may not enjoy the pressures of running a business and being an agent. But, I have always thought that at the bottom of the list, those with most to lose are your eXP type agents. Probably not capital rich, and yet they will have to pay money out and at the same time they really are in the self-employed mode, so a double whammy. Thoughts anyone?

From: Andrew Stanton Estate Agency Insights Strategies 18 October 2019 10:55 AM

Rollo BEA - Bedroom agent - I am often a bathroom and in the middle of a field walking the dog agent. The real nut to crack is - cost effective technology which allows more customer face to face time (or talking on the mobile) - I think the working space - does not matter - not to the client - unless lettings in which case you arguably need fixed premises.

From: Andrew Stanton Estate Agency Insights Strategies 17 October 2019 16:35 PM

Actually Amanda Rendle's background may well be useful, with a past including HSB, Masthaven Bank? (yes the experimental one) and currently a non-exec of The Royal Mint and Keep Britain Tidy, she may have access to copious funds - which CW desperately need, and if there is a rout, then at laest she can help clean up the mess. It does astound me why the strategy at the top is - get someone from the outside of the industry to solve our problems and calm the stock market - Alison Platt - prime candidate - property industry knowledge zero - MD of Bupa - that was a good fit. Here is a suggestion - why doesn't CW put together a 'think tank' (I know very 1960's) of estate agents - and move the company forward that way. Where can they find these calibre of people with industry knowledge? - well - there are thousands of them in their business and if the look at the people they 'let go' in the past 60 months there is probably enough top talent there to make a start. My thoughts - share price will implode in Spring 2020, when CW looks for another life saving injection of cash, and then piece by piece CW will be sold off. Thoughts?

From: Andrew Stanton Estate Agency Insights Strategies 17 October 2019 15:37 PM

First off, I like Rollo's thoughts and I enjoy hearing different view points, but, I am a little lost at the his thought that 'self-employed' is the new future for estate agency, as there are 8,700 self employed estate agents out of 17,800 agents in the UK, ie, private individuals or partnerships who run their own businesses. Many of these self-employed agents have been in place 30 years or more, some more recently. Then there is the franchise model, a person sets up, either under their name or a brand name, and they pay a fee to join the franchise, 1k to 50K as a one off payment, they then pay 5% to 35% of turnover (money banked to the franchisor, usually with some kind of override, say paying an extra 5% or more of any monies banked over 150k in a year. The franchisee gets all the red tape dealt with, CRM provided, training and the support of the company and other branches. The other model is corporate agency, a person goes and works for a large network of offices owned by a bank or building society, or a self-employed person who has grown his or her kingdom so large that there are many offices, and there needs to be an army of people to run the empire. There is an umbrella model, which is currently on trend, a hybrid of the franchise system. Where I do embrace that there is a change in the industry is that there appears on the face of it a left wing revolution taking place - and stay with me while I explain. I am fully aware that property is not exactly a Marxist goldmine. It may be the millennial generation or generation Z, but in many industries, people want as Rollo so aptly puts it 'freedom' to do their thing, as well as do work when it fits in with this. Also, as property grandee Chris Watkin has been teasing out in his debates, managers of estate agents and listers of estate agents seem on the face of it to be generating the wealth but only getting a small amount of the reward. So, here is the socialist rhetoric - the ownership and non-ownership of the means of production is central to his distinction between capitalists and proletarians. So the manager or the lister may be creating tens of thousands of pounds of profit through their labour, but it is the estate agency owner - (or the mill owner in the classic theory) who gets the lions share. The vibe in the air is that managers and listers can cry freedom and liberate themselves by rising up and carrying out the work for themselves, and in so doing re-define when the work is done and how much they get paid for the work. But, this is utopian, as if you work for yourself, you need 118K of capital to set up and survive, until you get out of year two, as no cashflow in for first 5-months, or if you work under an umbrella or a franchise, you have to factor in maybe an extra 30K of costs to buy in plus another 30K each year you trade. So, you are in the grip of the capitalist system. Speaking as a retired estate agent with over 30 years of industry experience, who took the plunge and set up on my own agency, my advice - if you are the type of person who likes risk, is willing to work twice the hours of agents in corporate agency (many of whom are brilliant agents), then in year three you will earn double what you earn now, but, you will have to have deep pockets. The other factor at work, is that in theory with the advances in proptech (I am an advovacate and had in 1996 one of the earliest versions) a single person could run a whole agency on their own, supported by technology. But, the monthly cost or burn, of your CRM etc is usually far higher than employing two members of staff and using a couple of laptops. That is why the glorious revolution will never come, there may well be great managers and listers and property managers and negotiators who want to run their own business, but if and when they do - they will follow the same mould as the business they leave behind. Yes, they can take an afternoon off for a child's birthday, yes they can work from home, or their car or the coffee shop, but, agency is increasingly more about the customer - as the boss of IKEA has recently commented, and businesses need to spend more time with them and that means more hours on the clock, the exact opposite of the 'red revolution ideal' of working for yourself so you can fit me time in around the work. Andrew Stanton estate-agency-insights-strategies.

From: Andrew Stanton Estate Agency Insights Strategies 17 October 2019 13:34 PM

Boost for Purplebricks? Let me see, is the online sector thriving? YOPA just lost 30M last year, after raising 16M from its current investors, 6 large online agents have closed or gone into administration in the last 24-months, the largest online rental agency has failed just this week, and one online agent is now doing it for free. So, in the short term a few more people will list with an agent who charges zero fees, and others will use Purplebricks. But, in the next 12-months, who will have any cash left to continue trading. YOPA have burnt through (invested?) over 65M since they started almost 50M in the last 2 years, and Purplebricks are eating through their cash reserve. 2020 is likely to be the decade of clear vision in more ways than one and the smoke and mirrors that has shrouded the 'disruptors' of estate agency may well fall away. Exposing a landscape of broken investors and disenchanted vendors and buyers, landlords and tenants. We shall see.

From: Andrew Stanton Estate Agency Insights Strategies 16 October 2019 14:34 PM

If anyone wants to set up their own agency - here are the figures based on an office in the high street, if you go serviced office or work from home, or coffee shop, broadly speaking costs are about the same as you pay more in terms of online presence for your business to grow the brand. The question is why would you want to pay 30k a year to KW on top of this? Here are the figures; it costs 30k to acquire premises and kit the office out and have all the IT hardware, systems, and office furniture in place. Then it costs 18K a month to cover the overheads, for a team of four-sales people and their salaries, cars, website costs, and all other costs to run the office and sell properties. A traditional agency trading 50-miles from the capital will then market and sell property in all price ranges, mostly from £200,000 to £600,000, and as the brand matures they may specialise in both the mid-range and the top end range £800,000 to £1.5M. On average they sell property at an average price of £360,000 and they charge 1.1% plus VAT, or around £4,000 plus VAT, £4,800 in total on a no-sale, no fee basis. In the first 12-months of trading – Year One - if they sell a property day one, the cheque for the completed sale arrives five-months later, and as they spend the first month getting property stock on the market, it is in their second month real sales begin. So, after six-months of trading they have spent 30k on setting the office up and 108k on running costs, that’s 138k, and probably they have received only 5k in on commission from completed sales. Over the next six-months their outgoings are another 108k, and the commission from completed sales dribbles in, plus VAT, at a rate of, 5k month six, 7k month seven, 10k month eight, 12k month nine, 14k month ten, 18k month 11, and 20k month 12, total 86k. So, 236k spent out, and 86k cash flow in. Profit; what profit? there is no profit, they are now minus 160k for the first year. Over the next 12 months – Year Two - office costs are 19.5k a month, and income from completed sales is 26k a month. So 234k spent out, and 312k cash flow in. Profit; 78k for the second year. In the next 12 months – Year Three – office costs are 20k a month, and income from completed sales is 28k a month. So 240k spent out, and 336k cash flow in. Profit ; 96k for the third year. On a serious note if you have a business that is in the doldrums or you are in the first stage of running your agency business, just reach out and I am more than happy to give free advice. That is right, free advice backed by 34 years of agency experience, all of it in the UK.

From: Andrew Stanton Estate Agency Insights Strategies 16 October 2019 12:02 PM

I agree with Simon - go it alone - it is cheaper - the brand is not KW - it is you. I do not think that Mr Vendor in the UK is going to be too interested in an agency with its foundation, roots and philosophy in Texas. A few days ago I had the KW model explained to me by Russel Quirke, and I think it was: - if you join KW, you pay 30k a year to KW. This covers all costs, then after banking 150K of fees in any given year you give 10% of banking's over 150K to KW. So, year one total banking's for 7 months (as no money in month 1 to 5) is 65K, minus 30K to KW = 35K minus - your salary, car and all other costs for 12 months means you are minus 25K. Year two, by some miracle you bank 200K (not make profit but bank) you pay another 30K to KW and 10% of 50k of banking's - 5K, total 35k to KW. So, at the end of year two KW has 75K of your money. By the end of year two - most cold start estate agency enterprises break even, (unless it is an online cold start in which case it never breaks even) but the KW candidate will be sitting on a 75K mountain of debt, which in year three with another 30K to be paid to KW plus a 10% over ride on turnover not profit, will have most KW candidates chipping out in about month 14 of the operation. Unless they have a large amount in the bank. Russel if I have got this wrong, please let me know and perhaps layout in this forum the 2 year cost to a new KW candidate, and the upfront cost to 'buy in'.

From: Andrew Stanton Estate Agency Insights Strategies 16 October 2019 11:50 AM

Congratulations to both parties, living in Winslow I am fully aware of Ella's local dominance in the rental sector and the reputation of George Thomas's operation. In fact with the Wilkinson Partnership also based in Winslow headed up by Simon Wilkinson, with a second office in Leighton Buzzard, which has won multiple awards and deals with top end property and land and development, I am blessed to be in an oasis of estate agency excellence. Whilst there is definitely change within the property industry, and much debate about its future, with online agents, proptech, and millennials and generation zero re-shaping how business is done. It is telling that when I walk my dog Zara around a village like Winslow, what the general public actually want is great service, provided by local sales professionals who are rooted in the community. Word of mouth recommendations and peak performance, year after year, solid and uncompromising, is the way that many leading independent agents continue to thrive, their aim is not dreaming up the next best thing in the industry, it is to cater for the needs of the clients, by listening to their needs and delivering.

From: Andrew Stanton Estate Agency Insights Strategies 10 October 2019 06:39 AM

Good news that Countrywide has appointed a new person, potentially bad news Bruce’s very successful career to date, appears to lack any experience in the property sector, unless home DIY can be counted and of course Dixons. I do hope that in the words of Britney they have not ‘done it again’ as Countrywide had previously installed a CEO the infamous and long-departed Alison Platt whose background was also anything but estate agency. During her four-year reign there was a 90% drop in the company’s share price. At least with the current share price at 3.9p, no-one can really harm the present fortunes of the company. True Bruce and Dave Lewis as a double act turned the fortune of Tesco around, following a programme of redundancies and re-modelling. But, the difference between Tesco and the Behemoth of Countrywide, is that Tesco when turning its fortunes around was in the top three of retailers in the world, Countrywide sadly is not in the same league as many of its competitors. The jury is out on whether it can survive, (as an ex-employee I hope it does) or it will have a programme of asset stripping and be consigned to history as yet another example of ‘big business’ failing to adapt to the realities of the ‘click generation’ who want service, and brands that deliver.

From: Andrew Stanton Estate Agency Insights Strategies 09 October 2019 07:42 AM

I want to start by saying that I admire anyone who gets off their bottom and tries to do something, as in the case of hardworking Ashkay. But, I think the words 'endless possibility with the internet' is a truer reflection of what is now gripping the business sector, as there is an awful lot of misdirection and as Mr Trump likes to put it fake news out there. For a kick off - I do not think Ashkay is a millionaire, and I am sure he will not mind me saying this, he has sold shares in his jointly owned company for over £800,000, and he and his family member retain a substantial amount of shares. But the company is not listed on the stock exchange or the AIM so the shares he holds are without value. Regarding the present value of Doorsteps, I think the annual accounts are due in September so I reserve judgement as to what profit has been made in the last year, but I would be surprised if it has made any profit. Which means that Ashkay has lots of shares in a company that does not make any money and is propped up by crowdfunding. What I am trying to convey is that - a lot of harm has been done to estate agency, because the outside perception of the general public is that property professionals are millionaires, when in fact most are for the hours they work on a minimum wage. Perhaps, then, people in the public eye such as Ashkay, would be better off encouraging the 'youth' to focus more on having a solid education, rather than dreaming up the next big thing on the internet, which inevitably these days seems to be funded by numerous individuals who dig into their own pockets and fund enterprises which never make a profit or give a dividend to them. Personally, having qualifications and a degree, back in the day when only 5% of the country had degrees, opened doors for me, so I still think that as a back up in case the internet does not bring riches … get as much education and learning under your belt.

From: Andrew Stanton Estate Agency Insights Strategies 15 August 2019 06:54 AM

Well Taylors in Kingston (a few miles from Central Milton Keynes) has closed in the past few months, so that is one less branch, and I have heard 'rumours' that others are about to. My thoughts are that to staunch the losses, closing offices is the only solution, but the cost of redundancies and ongoing leases, usually far outweighs any 'savings' for about 3 years. So, it will still be too little too late if there has been or will be a programme of mass closures. Another worrying thought if indeed hundreds of branches are for the chop, usually this is a precursor for a sale, and maybe that might be the real objective. Make countrywide more appealing as a target for asset striping from interested parties. Time will tell. Countrywide has been sleepwalking into this mess for nearly half a decade so hardly news in some ways. A real shame, but every business has its glory days and then the cycle continues downwards, unless top management has strong direction and can deal with the challenges and changes, unfortunately, too many decision makers who are out of touch with what estate agency looks like at grass roots level. They would do well to sit in some of their branches for a week and see the reality of doing business in 2019, it is all very different from doing agency in the 1980's.

From: Andrew Stanton Estate Agency Insights Strategies 14 August 2019 09:54 AM

I am not sure that a firm decision either way will help, in fact adding stamp duty burden to the buyer will make for more expensive property ticket prices. I really hope that Boris has a better time dreaming up a Brexit plan as moving the stamp duty burden just raises selling prices for all, and squeezes the first time buyer at the bottom who has no property to add the stamp to. What do I mean? Mr Vendor you now have to cover stamp duty cost on the sale of your property as Boris feels this will stimulate the property market. What you want to increase your asking/ selling price by an amount to cover this proposition? Excellent news, that will stimulate the property market by increasing the sale price of your 500k instruction to 515k overnight. Also, it will help all of those nice national homebuilders who offer to pay the stamp duty as a deal sweetener already, they would need to offer a further incentive to stay ahead of the curve, which of course would be absorbed in even higher selling prices, brilliant Boris ideas, sounds like a real stimulus to the industry, ever thought about asking estate agents for their views? Maybe if a housing minister was in post for more than 5 minutes - that would be a start. Soon be Halloween and things will all be … a dark, scary nightmare and I am not describing - autumn's seasonal celebration.

From: Andrew Stanton Estate Agency Insights Strategies 08 August 2019 16:39 PM

I hope that Boris has a better time dreaming up a Brexit plan as moving the stamp duty burden just raises selling prices for all, and squeezes the first time buyer at the bottom who has no property to add the stamp to. What do I mean? Mr Vendor you now have to cover stamp duty cost on the sale of your property, What you want to increase your asking/ selling price by an amount to cover this proposition? Excellent news, that will stimulate the property market by increasing the sale price of your 500k instruction to 515k overnight. Also, it will help all of those nice national homebuilders who offer to pay the stamp duty as a deal sweetener already, they would need to offer a further incentive to stay ahead of the curve, which of course would be absorbed in even higher selling prices, brilliant Boris ideas, sounds like a real stimulus to the industry, ever thought about asking estate agents for their views?

From: Andrew Stanton Estate Agency Insights Strategies 08 August 2019 16:30 PM

Obviously trade bodies and training entities look to embrace further regulation, as it is their interest, but what amazes me is that the very people, the people in the frontline doing agency every day, are never consulted. This ivory tower approach goes a long way to explain any muted response as Graham calls it from agents. I re-state again that the opening premise for further overarching regulation as set out in the ‘new big ideas’ from a 70 year old peer, is that the public do not trust agents. My experience is that overwhelmingly vendors, landlords, buyers and tenants in the main do trust agents that is why there is so much repeat business. Maybe, it is time that trade bodies instead of embracing more regulation, regulation which might actually undermine their present power base, actually took time to positively put forward to the ‘doubting public’ the real solid hardworking and professional way that 99% of the agents conduct themselves at present. I think it is high time that agents actually educated the general public into how complicated agency is, then the perceived ‘disconnect and distrust’ that is the genesis of the latest government recommendations might be stopped in its tracks and instead the government might actually do things that help an industry which performs a very vital role, both to the economy and on a personal level to millions of people. Thoughts.

From: Andrew Stanton Estate Agency Insights Strategies 19 July 2019 07:41 AM

There is always one - and usually it is me but if the article is a simple case of arithmetic, then let's start by getting the figures correct. UK completions do fluctuate annually between 1 million to 1.2 million, so correct. The number of agents 16,500, I think that a little low, but close enough, and of course 5,000 pure rental agents who from time to time sell the odd property. But, 10% of property that completes each year does so with no agent involved, so David Westgate's main thrust is in fact even more pertinent, lots of agents chasing 900,000 completions. Where will it end? - Well they always say that what happens in America, comes across the pond, and did you know 75% of realtors only sell 2 or less properties a month, and only the top 5% of realtors earn over 300,000 dollars. So pretty slim pickings (not the cowboy). This then could be the future - in the UK. As could the American multi-listing system … I fully agree that there is more competition - Since 1985, when I first became an agent, there has been a 500% increase in estate agents and only a 74% increase in housing stock. In answer to how many how many estate agents are trading within a 10 mile radius of large town, which I use when discussing with my clients the need to sharpen their approach to getting new stock, in say a town of 180,000 inhabitants, I tell my awe inspired clients that there are 221 Estate & Letting Agents, 71 Letting Agents only, 71 Estate agents only 363 agencies in total – trading in a 460 sqm radius which is an agency every 1.25 miles. (Plus online agents.) But, I am not sure that in the future there will be less agents, I think there may well be more, and these will be single individuals 'property people' who list and sell and are at the core of a geographical area, the property specialist, low overheads, hi tec, but also available, knowledgeable and charging a fee that covers costs and a margin on top to make it worth while to do the job. Vendors and Landlords do not want cheap fees, they want service and value for money, perhaps Proptech can be the salvation of the industry after all.

From: Andrew Stanton Estate Agency Insights Strategies 18 July 2019 14:06 PM

Having just read the 56 page report, it seems based on the premise that as the general public do not 'trust' estate agents and property professionals there is a need to regulate. Lord Best who oversaw the report I know has a major background in property matters - but not perhaps a working knowledge of the industry at ground level. Apart from the obvious new levels of red tape, the cost of the new regulator to be paid for ultimately by the agents and property professionals, and the cost for training that the new report calls for, which once again will hit the profitability of all agents, I am struck that the report is saying that the present bodies who regulate the property profession are not fit for purpose, not really a ringing endorsement for those hardworking people. Given the government has not resolved Brexit, after three years, I think that this issue of more regulation for the property industry may well be kicked into the long grass as other more pressing issues come to the political fore. especially after next Monday evening. As a person who helps and develops agency businesses I am all for training and professional standards and codes, but - why does the government want to add more regulation to the property sector? Should car sales people, double glazing sales people and MP's not also have extra regulation based on the same premise that this report has, that a low percentage of folk do not trust them. Many MP's when elected have zero training or competency of being an MP, and yet they make decisions from the first day they arrive at the house, decisions that have ramifications for their constituents, maybe they need to have formal qualifications and annual tests to prove they are a 'fit' person as detailed in Lord Best's report on estate agency professionals.

From: Andrew Stanton Estate Agency Insights Strategies 18 July 2019 07:29 AM

Absolutely brilliant. The asa look into the fact that a property is shown as being available when in fact it under offer. So the agent has carried out its primary function and no doubt the vendor is happy. In contrast purplebricks runs yearly campaigns stating that it charges clients no commission, yet every single instruction that is listed a 25% commission is paid directly to the ‘self-employed’ local property expert, but the asa do not see this as a breach. Purplebricks also continue to state they convert over 80% of instructions into sales they produce, a myth perpetuated by their ex-CEO. Maybe it is time that the asa looked into this online agent which has failed to make credible profits, rather than sequence which makes multi-million pound profits year after year because ... it sells property ... which was the starting point for complainant. I sympathise if a buyer sees a plumb property for sale and it turns out to be sold, but with over 600 branches I am sure that from time to time there are lapses.

From: Andrew Stanton Estate Agency Insights Strategies 17 July 2019 09:14 AM

Genius idea. Mr vendor you now have to cover stamp duty cost on the sale of your property, what you want to increase your asking/ selling price by an amount to cover this proposition. Excellent news, that will stimulate the property market by increasing the sale price of your 500k instruction to 515k overnight. Also, it will help all of those nice national homebuilders who offer to pay the stamp duty as a deal sweetener already, they would need to offer a further incentive to stay ahead of the curve, which of course would be absorbed in even higher selling prices, brilliant Boris ideas, sounds like a real stimulus to the industry, ever thought about asking estate agents for their views?

From: Andrew Stanton Estate Agency Insights Strategies 16 July 2019 06:33 AM

Michelle, as you seem to know all regarding purplebricks, perhaps you can confirm that at the point a new client signs up to use purplebricks, it is made clear to the client that a referral fee is in existence. If purplebricks do not disclose the referral fee, they may well be in breach of the new code as set down by the estate agency trading standards unit. Also, how can lpe s be self-employed if all their work is supplied to them by purplebricks, and they are trained and recruited by purplebricks, and they do no work outside the work they do for purplebricks. These are genuine questions, i look forward to your knowledge and input.

From: Andrew Stanton Estate Agency Insights Strategies 13 July 2019 23:16 PM

Asset stripping, it will all be done by September. Question is, will other large agencies follow suit. Those who wait too long may wish they had acted sooner.

From: Andrew Stanton Estate Agency Insights Strategies 13 July 2019 22:52 PM

Watch the wires.

From: Andrew Stanton Estate Agency Insights Strategies 13 July 2019 22:47 PM

Where to begin, having seen Purplebricks, burn through 90M of its cash reserve, in a year, 7.5M a month, and the exit of the Bruce brother's and a long list of key executives in the UK and in Australia and America, and the share price dropping by 80% from its height, I am not sure why anyone would be mad enough to risk putting money into Purplebricks, who has never paid a dividend to any investor since it began trading. As to stamp duty - as average sale price of Purplebricks is £261,000 this attracts at present a minimal amount of stamp duty, so if Boris does become PM, and if he does play around with stamp duty, no impact here for Purplebricks. Regarding Foxtons - yes - stamp duty has impacted on the number of bigger ticket sales, but the imposition of extra stamp duty on second purchases is the bigger area of damage that was caused by the last government interference with stamp duty, and this is unlikely to be repealed. Looking forward, even if Boris does become PM and he does tweak stamp duty, and if he does achieve Brexit - will the resulting crosswinds that come - interest rates rising - and continuing big business failing with the resultant unemployment make for a vibrant housing market. My advice, keep your money in you pocket and do not invest in estate agency stock, you may well need a cash reserve to help weather the next 12 months of political and economic instability coming our way.

From: Andrew Stanton Estate Agency Insights Strategies 12 July 2019 08:10 AM

Where to begin. The ex-CEO actually goes on record and confirms that Lpe’s are employees, and not self-employed. This will be no surprise to other estate agents, but does pose a tricky problem when HMRC and trading standards pick up on this point. As lpe’s are supposedly self-employed. I broached this point - the employment status of lpe’s with the estate agency team trading standards in Wales, about a month ago and I would hope that the ex ceo’s comments might get some fresh traction on the subject. The more that actually comes to the surface regarding the real business model of purplebricks as confirmed by persons who ran the operation, the more dubious it becomes. On a second point I offered a £1,000 reward to anyone at purplebricks or a former employee so Mr Wainwright is a candidate, who can prove that 80% of instructions listed by purplebricks go through to completion. I offered this reward for a month and it has been over a week and there are no takers. I will keep all informed if anyone comes forward in the next three weeks and claims the £1,000. Lastly, and I wonder if Chris Watkin could ask mr wainwright, when an lpe is with a potential client/vendor does the lpe disclose he/she is going to get a referral fee or set commission from signing the client up. Or does the lpe have to disclose as he/she is self-employed, but, 75% of the fee the client is about to pay goes as a referral fee to purplebricks.

From: Andrew Stanton Estate Agency Insights Strategies 09 July 2019 22:36 PM

Chris, you spoke about Australia - and the need for agents to change their approach - you are aware that Purplebricks just lost millions there and closed down their operations? And in the U S. Maybe the world just does not understand the bright future of online agents.

From: Andrew Stanton Estate Agency Insights Strategies 04 July 2019 08:47 AM

Vic Darvey has obviously been speaking to Ashkay Rupareilia of Doorsteps who in his original pitch on crowdcube stated that by 2020, that's five months away online agents will have 20% of the property market. The reality is that Doorsteps has raised over £889,000 from poor private investors with two rounds of cash raising at crowdcube, and the company has failed to make a penny profit. I think it is time that 'fake news' regarding online agents as being the future of agency should be faded out - and people start to look at the reality. They tell me Ashkay is a millionaire, but is this true? His company is valued at 18M, (how?) and he has sold some shares of an unlisted company for £889,000. If the company stock/shares was listed on the stock market or even the Alternative stock market and the shares had real value, then the holding that Ashkay and his relative has would indeed make him a millionaire, but holding massive amounts of shares of an unlisted company - which is set to need further funding is just another empire built on thin air. Looking at the Purplebricks figures, just released Vic Darvey would do well to look at the actual running cost of the Purplebrick operation. In 12 months PB have burned through 90M of their cash. Or burnt 7.5M every month for the last 12 months. A year ago they had 152.8M of cash, now they have 62.8M. Regarding the UK arm of the company, the supposedly profit making part, the Purplebricks balance sheet is very creative. In the period 2017 – 2018 (3rd July) it states that in the UK it made 74.4M in revenue, and the cost of sales was 31.3M, giving a gross profit of 43.1M, or gross profit of 57.9%. But, then in the next line down in the accounts, when admin costs of 19.5M are added in, and marketing costs of 21.4M are added in the operating profit is 2.2M (not 43.1M). 2.2M as % of 74.4M revenue = 2.9% return. Also, it had 152.8M cash as a war chest to trade forward. In the period 2018 – 2019(3rd July) it states that in the UK it made 90.1M in revenue, and the cost of sales was 33.3M, giving a gross profit of 56.8M, or gross profit of 63%. But, then in the next line down in the accounts, when admin costs of 24.8M are added in, and marketing costs of 26.7M are added in the operating profit is 5.3M (not 56.8M). 5.3M as % of 90.1M revenue = 5.8% return. But, the company as a whole had no longer got 152.8M cash as a war chest to trade forward, this had reduced to 62.8M over the 12 month period. So, the company had burnt through 90M in 12 months, or 7.5M a month. Given that Axel Springer injected over 130M into the company in the recent past, when the share price was three times its present level, it is unlikely that a further round of funding will happen, which means that even with closing down operations in Australia and America, commissary to all those self-employed realtors, the cash burn will continue for the scaled down Purplebricks model, with over 30M a year used in tv and other advertising alone, to keep the brand alive. Even if the cash burn is only 3M a month, in a year that is 36M, and as can be seen increased revenue in the UK, has only yielded a wafer thin return, so even if the average fee was to rise another £100 and revenue was 120M in the UK next year, the admin and marketing costs will grow even larger, and it could be a case that they make a 5M profit, but the cash to trade forward will dwindle by year end 2020 to only 26.8M or less than 9 months of capital to trade forward into 2021. What the accounts actually show is that the true cost of the sale for the Purplebrick online brand is prohibitive, as in;- In 2017 – 2018 is 74.4M monies in, 31.3M + 19.5M + 21.4M monies out, or 74.4M monies in, 72.2M monies out. Giving a true cost of sale of 97% of revenue generated. And in 2018-2019 is 90.1M monies in, 33.3M + 24.8M + 26.7M monies out, or 90.1M monies in, 84.8M monies out. Giving a true cost of sale of 94% of revenue generated. So the other money or cash washing around Purplebricks – comes not from making vast trading profits, but from raising capital from private investors and then from investors, private and blue chip companies when it was launched on the Alternative Investment Market. The allure of the company and its perceived value is that it has few fixed tangible assets or employees, though HMRC are likely to think that the Pimlico Plumbers have a lot in common with the self-employed LPE’s, but without high street premises (those assets), the company is forced to continue spending a multi-million budget on reminding the public that they exist. Am I anti-Purplebricks and online agents? No, I just feel sorry for the investors backing them, and as each online agency fails, Emoov, Tepilo, etc they damage the reputation of the industry as a whole. Vendors losing upfront fees paid in good faith and self-employed hard working estate agents losing their livelihood and investors losing their life's savings. The only winners are the banks and finance houses and brokers putting together these online companies who are charging vast fees, that is where a substantial amount of revenue disappears to. Lastly, Chris from my experience most estate agents I have dealt with over the past 33 years do not have a mentality of get em on get em sold. The mentality is do a good job each and every day, the actual listing and selling part of agency is only a small part of the process, it is the other multi-component parts of an estate agents day that most agents take a great pride in. As most agents are sole traders or a joint partnership, these people take a huge pride in what they do, as it is their name over the door, and their money on the line if things get tough. That is why many independent agents deliver massive profits each year as they are part of the community, they do not need to fake it - they are it.

From: Andrew Stanton Estate Agency Insights Strategies 04 July 2019 08:44 AM

Cash Management Cash Generation and Cash Burn. In 12 months PB have burned through 90M of their cash. Or burnt 7.5M every month for the last 12 months. A year ago Purplebricks had 152.8M of cash, now they have only 87.8M. Regarding the UK arm of the company, the supposedly profit making part, the Purplebricks balance sheet is very creative. In the period 2017 – 2018 (3rd July) it states that in the UK it made 74.4M in revenue, and the cost of sales was 31.3M, giving a gross profit of 43.1M, or gross profit of 57.9%. But, then in the next line down in the accounts, when admin costs of 19.5M are added in, and marketing costs of 21.4M are added in the operating profit is 2.2M (not 43.1M). 2.2M as % of 74.4M revenue = 2.9% return. Also, it had 152.8M cash as a war chest to trade forward as of July 2018. In the period 2018 – 2019(3rd July) it states that in the UK it made 90.1M in revenue, and the cost of sales was 33.3M, giving a gross profit of 56.8M, or gross profit of 63%. But, then in the next line down in the accounts, when admin costs of 24.8M are added in, and marketing costs of 26.7M are added in the operating profit is 5.3M (not 56.8M). 5.3M as % of 90.1M revenue = 5.8% return. But, the company as a whole had no longer got 152.8M cash as a war chest to trade forward, this had reduced 62.8M over the 12 month period. So, the company had burnt through 90M in 12 months, or 7.5M a month. Given that Axel Springer injected over 130M into the company in the recent past, when the share price was three times its present level, it is unlikely that a further round of funding will happen. Which means that even with closing down operations in Australia and America, commissary to all those self-employed realtors, the cash burn will continue for the scaled down Purplebricks model, with over 30M a year used in tv and other advertising alone, to keep the brand alive. Even if the cash burn is only 3M a month, in a year that is 36M, and as can be seen increased revenue in the UK, has only yielded a wafer thin return, so even if the average fee was to rise another £100 and revenue was 120M in the UK next year, the admin and marketing costs will grow even larger. And it could be a case that they make a 5M profit, but the cash to trade forward will dwindle by year end 2020 to only 26.8M or less than 9 months of capital to trade forward into 2021. What the accounts actually show is that the true cost of the sale for the Purplebrick online brand is prohibitive, as in;- In 2017 – 2018 is 74.4M monies in, 31.3M + 19.5M + 21.4M monies out, or 74.4M monies in, 72.2M monies out. Giving a true cost of sale of 97% of revenue generated. And in 2018-2019 is 90.1M monies in, 33.3M + 24.8M + 26.7M monies out, or 90.1M monies in, 84.8M monies out. Giving a true cost of sale of 94% of revenue generated. So the other money or cash washing around Purplebricks – comes not from making vast trading profits, but from raising capital from private investors and then from investors, private and blue chip companies when it was launched on the Alternative Investment Market. The allure of the company and its perceived value is that it has few fixed tangible assets or employees, though HMRC are likely to think that the Pimlico Plumbers have a lot in common with the self-employed LPE’s, but without high street premises (those assets), the company is forced to continue spending a multi-million budget on reminding the public that they exist. All financials taken from the Purplebricks - accounts as posted today.

From: Andrew Stanton Estate Agency Insights Strategies 03 July 2019 21:53 PM

Well Trading standards seem to think it is ok. I wrote to them outlining the position that tens of millions had been paid and not even a cake in return for customers of Purplebricks, and Trading Standards position is that until customers complain no action can be taken. Maybe ex-clients of Purplebricks and other onliners, who received no sale could get a class action together through a solicitor and get the momentum required for the regulating bodies to wake up to a possible mis-selling scandal on a scale of the recent PPI scandal in the financial sector. Of course if online agents can prove they sell 80% plus of the stock they list, rather than 48%, then there would be less of a fuss, but even if, and it is a big if - an online agent sold and completed on 80% of its listings, that would still mean 20% of clients paid for a service they did not get, which with Purple bricks would be over 15M a year.

From: Andrew Stanton Estate Agency Insights Strategies 02 July 2019 15:38 PM

If a double glazing company received an upfront payment/fee, on the promise that they would install a double glazed window, say at a cost of £1,000 to a client. And in a year they had 65,000 customers, but only installed 31,200 windows failing to put the other 33,800 double glazed windows in - I think the company would have major issues with trading standards. So, if an online agent receives an upfront fee, on the promise they will provide a service that allows a vendor to complete on the sale of their home, say at a cost of £1,000 or probably more. But only completes on 48% of sales - why does trading standards not take issue? When Emoov failed, twentyci, stated that sales rates of instructions to sales was low, and from this I extrapolated that completion rates would have been less than 40%, so 605 of vendors paying out good money for no return. I am not saying that online agents should not charge upfront fees, but they should give accurate conversion rates to potential vendors before the vendors part with their cash. Purplebricks say they convert at 80% from instruction to completed sale, I am offering £1,000 to anyone who can prove this, as I think they convert at nearer 50%, which means last year nearly 35M of fee was paid by vendors who did not get sold, or in the case of a double glazing company did not get a double glazed window put in. It is time that 'transparency' was the order of the day - if clients are paying cash upfront based on trust; on the no sale no fee basis, which over 90% of estate agents use -the trust is balanced the other way with the agent taking the risk that if they do perform a fee will be forthcoming.

From: Andrew Stanton Estate Agency Insights Strategies 02 July 2019 11:33 AM

Simon - some excellent points - and having been trolled by Michelle - who said that I should enjoy my retirement - I also think she should do her homework.

From: Andrew Stanton Estate Agency Insights Strategies 30 June 2019 07:56 AM

Well that's a thousand pounds I have lost - let us see Major Tom. I will let you know. And it is not just about an unfair competitive edge - think of all the shareholders who bought shares thinking that they conversion rate was over 80% only to find it is under 50% - that would be a real cake in the face -

From: Andrew Stanton Estate Agency Insights Strategies 30 June 2019 07:50 AM

Stanton’s £1,000 Purplebricks Conversion challenge. I have never been frightened to put my money where my mouth is, and in response to Lee Wainwrights ex-CEO of Purplebricks statement that Purplebricks completes on 80% of instructions they list. I Andrew Stanton – property analyst, consultant and journalist, from estate agency insights and strategies – throw down a £1,000 prize gauntlet to any former or present employee of Purplebricks, who can prove this statement to be true. Since 2017, from my own in-depth analysis I proved that Purplebricks only completes on 48% of the instructions they list or less. And I have repeatedly asked for proof that this is incorrect and found no takers. I can give you an up to date example, on Rightmove 27th June 2019, Purplebricks had in one area Meridian, a total of 3,159 properties showing as either for sale or under offer. 1,844 listed for sale, and 1,315 listed sold subject to contract, so only a 58% conversion rate, which allowing for a 28% cancellation rate on the 1,315, gives 946 completions or a conversion rate of only 29%. I am willing to lodge £1,000 with EAT, for 28-days, and the first person from Purplebricks, who can show the EAT team proof that Purplebricks does complete on 8 out of 10 instructions they list, will receive the £1,000. The only rules are that, the conversion rate must be over a 12-month period, and if any LPE seeks the £1,000, they must have listed for more than 12-months. So, Jan to Dec 2017, 96 properties are listed by an LPE, Stanton would require verification that 77 of these addresses completed having been sold by Purplebricks; at any point after they were listed. Purplebrick’s in their company annual statements have been stating that they have been completing at a rate in excess of 80%, and some months ago I contacted National Trading Standards Estate agency team, querying this. Stating they probably only completed on 50% or less of property listed. Which meant over £35M was paid out in upfront fees from vendors last year, who failed to achieve a sale. The response was that that until the public complained no action could be taken. I am not singling out Purplebrick’s about completion rates on property listed, this is just an industry norm that agents only complete on 50% of the properties they are instructed on. Given this ‘truth’ perhaps there might be merit in charging a marketing fee on all instructions, based on services rendered. Any person wishing to claim the £1,000 reward, please contact Graham Norwood who can act as referee, if I am incorrect I am more than happy to pay up and shut up. The clock starts ticking today the 29th of June. I will let you all know if I had to pay out.

From: Andrew Stanton Estate Agency Insights Strategies 29 June 2019 11:50 AM

Stanton’s £1,000 Purplebricks Conversion challenge. I have never been frightened to put my money where my mouth is, and in response to Lee Wainwrights ex-CEO of Purplebricks statement that Purplebricks completes on 80% of instructions they list. I Andrew Stanton – property analyst, consultant and journalist, from estate agency insights and strategies – throw down a £1,000 prize gauntlet to any former or present employee of Purplebricks, who can prove this statement to be true. Since 2017, from my own in-depth analysis I proved that Purplebricks only completes on 48% of the instructions they list or less. And I have repeatedly asked for proof that this is incorrect and found no takers. I can give you an up to date example, on Rightmove 27th June 2019, Purplebricks had in one area Meridian, a total of 3,159 properties showing as either for sale or under offer. 1,844 listed for sale, and 1,315 listed sold subject to contract, so only a 58% conversion rate, which allowing for a 28% cancellation rate on the 1,315, gives 946 completions or a conversion rate of only 29%. I am willing to lodge £1,000 with EAT, for 28-days, and the first person from Purplebricks, who can show the EAT team proof that Purplebricks does complete on 8 out of 10 instructions they list, will receive the £1,000. The only rules are that, the conversion rate must be over a 12-month period, and if any LPE seeks the £1,000, they must have listed for more than 12-months. So, Jan to Dec 2017, 96 properties are listed by an LPE, I would require verification that 77 of these addresses completed having been sold by Purplebricks; at any point after they were listed. Purplebrick’s in their company annual statements have been stating that they have been completing at a rate in excess of 80%, and some months ago I contacted National Trading Standards Estate agency team, querying this. Stating they probably only completed on 50% or less of property listed. Which meant over £35M was paid out in upfront fees from vendors last year, who failed to achieve a sale. The response was that that until the public complained no action could be taken. I am not singling out Purplebrick’s about completion rates on property listed, this is just an industry norm that agents only complete on 50% of the properties they are instructed on. Given this ‘truth’ perhaps there might be merit in charging a marketing fee on all instructions, based on services rendered. Any person wishing to claim the £1,000 reward, please contact Graham Norwood who can act as referee, if I am incorrect I am more than happy to pay up and shut up. The clock starts ticking today the 29th of June. I will let you all know if I had to pay out.

From: Andrew Stanton Estate Agency Insights Strategies 29 June 2019 11:48 AM

Stanton’s £1,000 Purplebricks Conversion challenge. I have never been frightened to put my money where my mouth is, and in response to Lee Wainwrights ex-CEO of Purplebricks statement that Purplebricks completes on 80% of instructions they list. I Andrew Stanton – property analyst, consultant and journalist, from estate agency insights and strategies – throw down a £1,000 prize gauntlet to any former or present employee of Purplebricks, who can prove this statement to be true. Since 2017, from my own in-depth analysis I proved that Purplebricks only completes on 48% of the instructions they list or less. And I have repeatedly asked for proof that this is incorrect and found no takers. I can give you an up to date example, on Rightmove 27th June 2019, Purplebricks had in one area Meridian, a total of 3,159 properties showing as either for sale or under offer. 1,844 listed for sale, and 1,315 listed sold subject to contract, so only a 58% conversion rate, which allowing for a 28% cancellation rate on the 1,315, gives 946 completions or a conversion rate of only 29%. I am willing to lodge £1,000 with EAT, for 28-days, and the first person from Purplebricks, who can show the EAT team proof that Purplebricks does complete on 8 out of 10 instructions they list, will receive the £1,000. The only rules are that, the conversion rate must be over a 12-month period, and if any LPE seeks the £1,000, they must have listed for more than 12-months. So, Jan to Dec 2017, 96 properties are listed by an LPE, Stanton would require verification that 77 of these addresses completed having been sold by Purplebricks; at any point after they were listed. Purplebrick’s in their company annual statements have been stating that they have been completing at a rate in excess of 80%, and some months ago I contacted National Trading Standards Estate agency team, querying this. Stating they probably only completed on 50% or less of property listed. Which meant over £35M was paid out in upfront fees from vendors last year, who failed to achieve a sale. The response was that that until the public complained no action could be taken. I am not singling out Purplebrick’s about completion rates on property listed, this is just an industry norm that most agents only complete on 50% of the properties they are instructed on. Given this ‘truth’ perhaps there might be merit in charging a marketing fee on all instructions, based on services rendered. Any person wishing to claim the £1,000 reward, please contact Graham Norwood who can act as referee, if I am incorrect I am more than happy to pay up and shut up. The clock starts ticking today the 29th of June. I will let you all know if I had to pay out.

From: Andrew Stanton Estate Agency Insights Strategies 29 June 2019 11:43 AM

Mr Voice - try 70 hours plus a week , and try since 1986 - then you will get some idea how much industry knowledge there is on these comment threads.

From: Andrew Stanton Estate Agency Insights Strategies 25 June 2019 14:11 PM

On the 18th of October 2017, I proved that Purplebricks converted only 48% of listings to completed sales, the full article is on my website estate-agency-insights-strategies for anyone who is interested. I was in contact with Anthony Codling at that time and sent him my analysis plus a comment that using PB was the same as same as flipping a coin, ie a 50% chance of losing your fee paid upfront. Anthony also did his own analysis based on tracing a sample of instructions and seeing what amount completed as recorded at Land registry. Despite requests from Purplebricks, they have never disclosed their conversion rate, but the failure of Emoov (1) last year does give some interesting insights into the online model. I also posted a comment some months ago that ... ' If you look very closely at this independent analysis commissioned by Purple Bricks by the data experts twentyci which cover the financial year 2017 to 2018, available online on the Purple Bricks website under investors on the title page, there seems to be some contradictory claims. In the twentyci report, and I quote 'Purple Bricks were looking for a reliable, respected and independent data source to establish answers to a set of questions about their performance in the financial year 17/18′ And Purple Bricks are … ‘No1 at selling houses: 81% of listings sold within 12 months’ Then there is a helpful graph in the same report which shows an annual picture of Purple Bricks results, it shows 64,000 new instructions, 48,000 properties sold subject to contract and it shows 38,000 properties exchanged. Now the ratio of exchanges to new instructions 64,000 to exchanges 38,000 is 59%, so Purple Bricks are not selling 81% of the instructions. But the worrying thing is, if the company gets 59% of vendors exchanged, it fails to get 41% sold or exchanged but still charges them on average £1,100 as an upfront non refundable fee, which is 41% of 64,000 vendors at £1,100 or 28.86M of fee for nothing. Readers of this are going to say the figures are wrong and skewed etc, but twentyci also did a similar report on Emoov and Tepilo, post the recent failure of these two online companies. And the WHICH organization recently had sight of this twentyci report and said that the conversion rate of the online pay upfront company was 53% of instructions to sold subject to contract, if you then discount the 53% by 30% the usual industry fall off for cancelled sales you get to an exchange rate of around 37%. This is available on the WHICH site online. In this piece by WHICH, it is stated that the ‘Major online estate agent Emoov, which also owns Tepilo, has gone into administration, potentially leaving thousands of home-sellers out of pocket by as much as £2,995. James Cowper Kreston, the firm appointed to act as administrators for Emoov, says the company currently has 5,000 properties listed for sale or sold subject to contract. Of this total, around 80% have paid upfront for the service and are at risk'. The big story is that instead of focusing on the financial sector and banking and PPI, maybe Trading standards Powys, should be looking at PBI - and looking to refund the 50% of clients who paid fees upfront in good faith and got a cake in the face. By my reckoning their are tens of millions of pounds paid by vendors in good faith that has been squandered on 20M plus a year media advertising on the brand alone, which should have been used to 'market' and successfully allow vendors to complete. This money should go back to all clients who received no sale. I think Chris Watkin is a top boy - and he injects debate into the property arena, what beguiles me is that the property bodies, and regulators sit on their hands whilst misery is being dealt out to vendor victims. I make my living out of analysing all aspects of the property world, but in a former role I personally oversaw the marketing of over 8,000 instructions, thousands of which I personally listed, and the conversion rate was always the same, list 10, sell 7 subject to contract, of which 2 fall through prior to exchange, 5 exchange - 50% conversion. In a very hot market, you might sell 8, but 28% are always going to fall through. So, if Mr Wainwright has any figures that he wants to show me, that contradicts the industry norm, please give me a call.

From: Andrew Stanton Estate Agency Insights Strategies 25 June 2019 11:25 AM

I am a great fan of Graham, and I find all that he writes gives both sides of the story, but I am a bit baffled regarding the figures quoted by Karl Rusk. Who I have no doubt is a very hardworking estate agent. The first point is that 'turnover' was £60,000 year one, £145,000 year two, £290,000 year three, and projected £400,000 year four. Was this Karl's personal turnover, ie, in year one did he turnover personally £60,000. Being 25% commission on the instructions he personally listed, with Purplebricks obtaining the other 75% of the fee or £180,000. Or does the £60,000 turnover year one represent, 61 instructions signed up at an average fee upfront of £975. From which Karl would have received 25% , or £15,000, but as he would have a guarantee over-ride of £2,000 a month he would have earned £24,000 as his turnover. Out of which he would have to run his car, pay his taxes and pay for his holiday and sickness cover etc. In year two if £145,000 turnover is the total fee earned, 25% to Karl, 75% to Purplebricks, at an average fee of £1,200 that would represent 121 instructions from customers paying upfront. So, Karl would have received £36,250 as his turnover before car costs and tax, given that all of these were his own instructions and not fractionalised instructions from LPE's working in his territory. In year three if £290,000 turnover is the total fee earned, 25% to Karl and 75% to Purplebricks, at an average fee of £1,300 that is 223 instructions from customers paying upfront. So, if all these 223 instructions were Karl's that would give a turnover figure to Karl of £72,500. But, if you work 48 weeks a year (as you take 4 weeks holiday) and you lose two weeks in December and two weeks in January as no one lists their home then, that leaves 10 months to list, so Karl is listing 22 instructions a month, which given that the industry conversion rate of MA's to instructions is 32%, means Karl went to 69 MA's a month. In year four if £400,000 was the predicted total fee earned, 25% to Karl and 75% to Purplebricks, at an average fee of £1,4000 that is 285 instructions from customers paying upfront. So, 100k turnover for Karl, but he was visiting 838 properties to generate his 100k. So 83 MA's a month. Having followed the rise and decline of many online agents, including Purplebricks, I do think at the heart of the business is the same muddled pattern when it comes to figures and profit and loss. Each unit that Purplebricks markets (and do not get me started on that) or lists costs Purplebricks the fee they receive upfront and an extra 12 to 18% more than the fee they charge, so although they have great cashflow, as no sale does not mean no fee, they can never make profit. And profit pays the bills, pays dividend's to the shareholders and keeps the share price buoyant. All I know is that from speaking to many ex-LPE's they annually turned over on average £24,000 to £28,000, out of which they had to pay for their own holidays and run a car, and they would go to around 100 MA's a year, not 838.

From: Andrew Stanton Estate Agency Insights Strategies 24 June 2019 23:15 PM

Algarve Investor - you are so right. Brand awareness PR and perception. I deal with clients who make 400k profits out of a single branch - but they do zero active marketing of their success, imagine - if they actually had a 'brand awareness' like PB, together with a business model that works - well that 400k could be a million, but the need for deep pockets - or in the case of PB other people's pockets - often stifles the ability of a company to launch itself. A real irony, estate agents are great at marketing property, poor at marketing themselves.

From: Andrew Stanton Estate Agency Insights Strategies 20 June 2019 13:25 PM

Truth hurts - hyperbole = are exaggerated statements, my statements are based on facts. So, statement one - market capitalisation was at its highest 1000m today it is 303M, statement two - share price today dipped to 96p at 11.48 am, its highest share value was 523p, statement three - all of the shares that the Bruce's held have been exchanged for money - so cashed in, statement four Michael Bruce has left the company as it has a new CEO, statement four on 3rd of June 2019 Woodford's investment vehicle was suspended for 28-days, and on 25th of June he is up to see the regulator to explain amongst other things his operations in Guernsey, and why he circumvented the usual financial norms risking heavily other peoples money, Statement five - closures - according to the FT PB ' in Australia, which last year the group predicted would be the first of its international markets to turn a profit, Purplebricks is leaving entirely. The US operations meanwhile face a strategic review and material cuts to investment in marketing and other overheads. The board will “more closely [consider] the opportunities and risks associated with a materially scaled back business” there. That leaves just the UK and Canada.' Statement six - Purplebricks complete on only 48% of the properties they list - this is perhaps the biggest statement of fact that everyone should get their head around, meaning that 52% of revenue is generated from clients who get nothing in return - not even a cake. Statement seven - well hopefully Truth Hurts you are getting the picture - the truth does hurt and that is why Purplebricks will soon have burnt through its cash mountain, with an annual 26M spend on brand awareness advertising alone - those cake adverts do not come cheaply.

From: Andrew Stanton Estate Agency Insights Strategies 20 June 2019 12:43 PM

I think that the ratio of hours worked to profit made is not a simple one, and that a key point is that being open, is not the same as having the ‘brain’ of the company engaged. What I mean is this, if an experienced team work from 8 am until 8 pm and open 7 days a week, they will create marginally more profit than an agent working 9 am until 6pm six days a week. But, if the business owner or ‘brain’ of the branch, be it the new corporate manager wanting to show his or her prowess, or the journeyman who wants to become market leader, puts in substantial extra hours for say a 10 week period, driving new strategies and pushing the team forward, then this boost will pay dividends. Back in the day I massively improved the bottom line of over ten different branches in different geographic areas and marketplaces, by putting in the hours. So, long or short hours, yes with automated systems here is less of a need to have the front line office open all hours, but for top line management or business owners, Reid spells of long days will help you become market leaders, because success is linked to effort put in.

From: Andrew Stanton Estate Agency Insights Strategies 20 June 2019 07:17 AM

I am amazed that purplebricks will be looking to put any money into an Olympic vanity project when its market capitalisation is down by over 60%, its share price is only 20% of what it was at its height, all the Bruce clan have divested themselves of their shares, Michael Bruce has exited the company, Neil woodford’s equity company has been suspended and he is up before the regulators later this month. Add to this the closure of most of the overseas operation of the company and the fact that despite taking millions in upfront fees from vendors who failed to get a sale the company has yet to make a penny profit or return a dividend. So, the Olympic tie up is being funded not from profits, but by the 50% of vendors who continue to pay upfront for a service ... the successful sale of their property, which they will never actually see. At some point trading standards will scrutinise the business model and realise this is not an equitable situation. Maybe if axel springer take the company private, and change the model, maybe actually employing the poor long suffering local property experts, and maybe adding some sales people to actually *sell’ the property that is listed then purplebricks might survive. If the share price goes below 96p the original opening price which seems likely, I think that the falling share price will underpin the recent d decline of this dot com business. Which may well go the route of tepilo, emoov, (version-one) hatched, etc, all of whom ceased trading less than 12 months ago, and did nothing but burned cash and lined the pockets of the advertising and marketing industry, and created losses for many unlucky shareholders, and created hardship for those who were not paid salaries when some companies closed overnight, unlike the orderly exit of hatched, which had an enlightened management team who decided to cut their losses and focus on traditional agency, which they do so well.

From: Andrew Stanton Estate Agency Insights Strategies 20 June 2019 06:49 AM

1000m market capitalisation that should have read, not enough zeros, which is often the case for online agents.

From: Andrew Stanton Estate Agency Insights Strategies 19 June 2019 16:03 PM

I would suggest that the Motley Fool analyst needs to remember that Purplebricks market capitalisation was 100m not so long ago and is now a third of this at around 325m, the share price is around 99p, down from a high of over 500p, Neil Woodford's Equity investment fund was suspended a fortnight ago and he is now being formally investigated by the regulators. PB has never made a profit and has closed much of its overseas operations, and it is possible that Axel Springer may take the company private. The reason Woodford is important, is that Purplebricks has been burning through its cash … and normally would look to inject more money by going to fresh investors, but given the shakey position of Woodford, the leaving of Michael Bruce, and the sale of the Bruce clan of all of their shares - as well as Woodford divesting himself as of the same, I do not see anyone wanting to buy shares unless they want to take a controlling interest of the company. I think the chap from Motley Fool could do worse than look at the ADVFN share chat, and get a real insight into what dealers and investors think about the financial health of Purplebricks, instead of making up some 'analysis' that says PB is in better health than some agencies who themselves are strapped for cash and could do with a large cash injection to keep them safe from the current difficulties that the property market is facing.

From: Andrew Stanton Estate Agency Insights Strategies 19 June 2019 16:01 PM

Pricing and price falls is often a minefield of mis-information, are asking prices falling or selling prices falling? My own take on where prices are in the south east, is they will sell for about the value they did in mid 2017. At the point the government manipulated the stamp duty bands once again, which saw a spike in transactions and sales prices achieved, and brexit had yet to take a hold. Based on this I recently took advice from an excellent local agent derrick bell, from giggs and bell in Luton who dealt with the probate sale of a family member, and instead of listing at 2019 asking prices, we listed just above 2017 selling prices, the result a sale agreed in 12 days from being listed on the major portals. Yes, the final selling price was lower than the listing price, but a sale was agreed. The point is - statistics, and I spend my life as an property analyst, can be used to prove most things, and zoopla supporting a softening of prices is a general truth, but in a brexit housing market, which itself is based upon a market that has been rising since 2013, it is not unlikely that a boom bust price adjustment is likely, as house inflation tends to go in 8 to 10 year cycles. And I like many have sold in the 1988 broken market onwards, know that what goes up will come down ... a bit but over two decades property usually increases by two and bit times it’s original value, which even allowing for inflation is the best financial return out there, and a better return than renting.

From: Andrew Stanton Estate Agency Insights Strategies 18 June 2019 07:50 AM

Though many agents are 'residential property experts' I think that having extra qualifications such as the Sava Diploma in residential surveying and valuation, definitely does help. One of my best friends did the course a few years ago, and when he worked with me his additional 'credentials' were definitely an asset, especially as we were dealing with high end clientele and property in excess of 1M. I know from running my own business for many years that deciding to invest over 10k in a course or similar seems a big ask, but it is not only about the qualification, staff retention and development of good people always pays off, especially with the current churn of property staff. When I started in agency in the mid 1980's I was a graduate and at that time only about 5% of the UK had degrees, and very few were agents. Now 41% of the new generation are set to have at least a first degree, that is brilliant as it means a better educated nation which can only be a good thing. Especially with the technological revolution that is currently sweeping the world. As a point of balance, many very successful property people, sales and lettings have very few formal qualifications, but are great communicators and extremely talented, so just as with other things in life, formal academic qualifications are not for all, but certainly within each 'team' to have at least one accredited person does help businesses stand out. Thoughts?

From: Andrew Stanton Estate Agency Insights Strategies 14 June 2019 07:41 AM

First a wave of IT personnel redundancies, then branch closures, now sales progression personnel, very soon even the top executives in their ivory tower will feel the reality that making multi million pound losses is a really stupid idea and decide to exit or be helped on their way. If you look at the composition of the board and their lack of industry knowledge, or the sound bites that have been coming out since the departure of Platt from supposedly experienced directors - it is clear that this slow motion car crash could have been minimised 6-months ago. A one off - closure of non-profit making offices (a big list) the sale of some of the assets (a smaller list) a one off programme of redundancies - with perhaps franchises being offered to the brave who could make marginal offices profitable if not constrained by ingrained and out dated practices. Countrywide - the clue is in the name - maybe it should be less of huge flabby loss making empire sprawling across the country - and cut itself down to size - and become a lean keen selling machine. Another major problem it has, is that CW t is top heavy with many middle aged and older personnel - I am not being ageist I am 56, but young blood often helps, because in 10 years - the usual cycle of a successful business these people become the mature advocates whose core values carry companies into profitable times. In the mid 1980's when agency exploded in the UK with banks and building societies buying up small independent agents to sell their financial wares, lots of 20 something estate agents joined the industry, and their work, motivation etc powered the movement. Many of these people are now in high places, but estate agency has changed and CW is a classic example of a business being run as though we were back 35 years ago.

From: Andrew Stanton Estate Agency Insights Strategies 12 June 2019 11:25 AM

Countrywide failed because less than 4 years ago - the top directors of CW most of whom had never run an estate agency - decided to get fresh blood into the company - then installed a person with zero industry knowledge who was chosen as they happened to be in the right place at the right time in their previous job. Then all the talented team who opposed the new CEO were fired/resigned - same thing - leaving CW to lurch from disaster to disaster. If CW had followed my model, high fees, high levels of service, high rewards for top performing staff - then they would not have failed. In a way that is the beauty of new start company's they do the right thing intuitively, they are so driven and focused on surviving that they push forward and adapt, most large company's have a life cycle of 10 years, they then adapt and morph into something new or die, it is the first 36 months that establishes the brand.

From: Andrew Stanton Estate Agency Insights Strategies 10 June 2019 20:36 PM

The most common gripe that agents have - 'I have an online agent in my chain and they do zero sales control/progression' and I personally know of a situation where it took 8 days for an online agent to verify the position of their buyer, even though their vendor had been sstc for 2-weeks before they made an offer through a traditional agent. Qualifying buyers and keeping the sale together, is about 80% of the work of a good agent, cash flow depends on completions - unless of course you get paid at point of listing - in which case - cash flow depends on listing - the defining difference between online upfront fees and no-sale, no-fee.

From: Andrew Stanton Estate Agency Insights Strategies 10 June 2019 20:26 PM

Axel Springer - that is the interesting factor - they paid for shares a year ago at three times the level they are now able to buy shares at - so on the one hand - a great time to gain control of the business - but on the flip side - having a controlling interest of a business that does not make profit - is that a logical step? Well done to the Bruce's - Purplebricks has been Goldenbricks for them, and even Mr Woodford is ahead of the game (in terms of getting money out of Purplebricks), though it is questionable that his daytime job - running an investment portfolio of only a limited amount of companies - which has dropped by over 60% in value in recent times - will be scoring points with those investors who invested with him). Purplebricks if it survives in its present form might limp along hoovering up those vendors who want to play Russian roulette with an upfront model, which pays off 50% of the time, if the property listed is 260k in value or less - but a pure online agency - is not going to be the system of the future for a 'contact sport' like estate agency - the human factor is still an extremely important part of the mix. Countrywide - less than 4p a share - when it was over 530p a share in the last 5 years, this leviathan is already dead, it may make it to September - but I think a fire sale of any assets will come well before this, together with a mass of closures. A real shame - but out of this will come the new wave of agency - many capable survivors will set up and provide excellent service and be rewarded with financial rewards many times greater than they now earn, as they will follow their own path, utilising the skills they have and the training that corporate agency gave them.

From: Andrew Stanton Estate Agency Insights Strategies 10 June 2019 20:17 PM

With a media frenzy around Neil Woodford - apparently even Radio 2 Jeremy Vine is commenting on NW's fall from grace - the only question is - will a new investor jump in? Will Axel Springer buy more shares, or will the 'online disruptor' become another dot com dream and be allowed to rest in peace. As stated previously with a traditional agent, 160K of seed capital utilised to start and fund a cold start estate agency branch will in 36 months be paid back in full plus a profit of 5%, in 48 months profit will be 20% plus. Given the tens of millions that 'online disruptors' have squandered, with 5 large online concerns closing or failing in less than a year, I could have used all the lost money and have built a traditional 1,000 branch agency in the UK, and would actually be paying a dividend to shareholders. Until people realise that tech is moving forward in every industry, and just to say we have an online model that is better than a traditional model - does not cut the mustard, especially when online estate agency is actually more expensive to run than traditional estate agency. After nearly 5 years, PB has never made a profit, still charges all vendors an upfront fee, and still only completes on 50% of the properties it lists, and the need for more funds to prop it up as it burns through millions on advertising to keep the brand name alive is one of the reasons that it has failed. If the public thought PB was a good thing - it would not need to rely on running adverts telling everyone how brilliant it is because it does not charge commission.

From: Andrew Stanton Estate Agency Insights Strategies 06 June 2019 07:23 AM

The online sector is in fact most agents as all agents list online. Pure online agents with no 'real office' will probably as a sector grow to 12%. This is because only 12% of vendors are fee sensitive when it comes to choosing an agent. So, if an agent allows a vendor to list on all the major and many minor portals, then they will hunt out the online option. The thing to watch is, will the big boys and they are an endangered species continue to put millions and millions into advertising the brand and utilising google? If the stop the brand stops, if they continue they may well be the last large company in the arena, but if their spend has been £50M to get and the annual profit moving forward is zero or a few million, then what is the point? As they disappear, the smaller online agents will fill the space, catering for the cheap fee crowd, who if they own property at 250K and under will probably get sold. But, another question is would a traditional agent sell them for bigger money, less hassle and spend 60% of their time helping the sale progress post the point the sale being agreed. Thoughts?

From: Andrew Stanton Estate Agency Insights Strategies 15 May 2019 10:03 AM

Has 99Home changed their model to a no sale no fee model, for some customers, I thought they always offered this option? For sure 99Home raised hundreds of thousands of pounds through crowdfunding only 7-months ago, so if they are now emphasising a reliance on a no sale no fee model I wonder where this is all leading? Is it a case that the general public as a whole have fallen out of love with the online, pay upfront and pray for a sale model, and 99Home have realised this? On a positive is you want to cheer yourself up, I suggest you log onto the 99Home website - and look at Dave's explanation of their business model, it contains lots of wigs and a confusing amount of Dave's … but it certainly is entertaining. It is always good to be different - well done.

From: Andrew Stanton Estate Agency Insights Strategies 13 May 2019 07:46 AM

So Countrywide's strategy - 'we have no strategy' - continues; let the whole property industry watch as we unravel. Time for vision and action, but with the share price likely to be 100th of what it was 5-years ago, there is likely to be a major fire sale of any 'profit making' components of the brand. In some ways Countrywide echoes Woolworths and other companies that woke up to find that the world had moved on and they had become a relic of the past. Just because the way business is conducted is ever changing, this should be seen as an opportunity, rather than an annoyance. Burying ones corporate head collectively in the sand, rather than confronting change and planning future growth is the top sin of many companies. Many will be watching Countrywide's demise with shock, but, the real shock may be that their own businesses are also more like Woolworths than businesses ready for trading in 2020, where clear vision - no pun intended - will separate profit and loss making concerns.

From: Andrew Stanton Estate Agency Insights Strategies 13 May 2019 07:22 AM

Paul, I totally agree that business or how business is done is changing, not just in the property sector, but the point is that CW had a mountain of cash and so were 5 years ago ahead of the game and they fumbled the ball. They did not future proof, they walked like zombies into the future, for sure Alison Platt did not help, but maybe they should have asked then listened to the front line team in the branches and adapted to the new 'needs' of vendors and buyers, landlords and tenants, all the raw data is and was there, instead middle aged men and one woman made decisions from a huge ivory tower a million miles away from the changed reality at the sharp end of the business. Being a middle aged man myself - you realise - you can either do things the same way you did in 1985, for the next 45 years - the Countrywide model, or observe, absorb and adapt as the climate changes and be king of the jungle, or at least be nearer the top of the food chain. Capitalism is very fickle as you say Paul, but it also has many rewards for those who seize the opportunities.

From: Andrew Stanton Estate Agency Insights Strategies 11 May 2019 11:38 AM

I think this is a brilliant idea, I know that it goes against 33 years of agency experience to suggest that the process can be boiled down to the click of a button, but as all the pre-purchase process remains the same, the need for a property to be listed and shown, the speed of transaction for at auction some is great. I personally am looking to buy at auction, and at least you know you have 'bought' a property, rather than waiting 16 weeks, with fingers crossed that the sale will happen. Auction is not for everyone, typically as most sales are by private treaty and so buyers in a chain, who are not exchanged and are going to stump up 10% and complete in 4 to 6 weeks, as unlikely their chain will accommodate / auctioneer would accept them as being in a go position.

From: Andrew Stanton Estate Agency Insights Strategies 11 May 2019 08:13 AM

A swathe of closures imminent, what a sad thing to see, five years ago this company was awash with money and the top management team squandered the opportunity. I really feel for those about to lose their positions, good luck, and maybe now is the time to go it alone, as agency really is a profession where you get out what you put in. With Proptech, less of a need for a high street office, starting up has never been so cheap, so maybe a silver lining here for some. Countrywide's decline is a symptom of the changes to all industries, crazy moves like making 150 IT staff redundant to cut costs? rather showed the company was out of touch with the needs of any modern company. On the positive it will embolden other companies to offload non profit making offices. Maybe they might sell some offices off, rather than closing them - opportunities here to generate income - Hamptons? Thoughts.

From: Andrew Stanton Estate Agency Insights Strategies 11 May 2019 08:03 AM

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.

From: Andrew Stanton Estate Agency Insights Strategies 09 May 2019 10:40 AM

Hi Ashley I totally agree that all vendors should pay for the service sale or no sale, but all agents would need to adhere to this for it to work. In that utopia - fees would actually come down, as each fee on completion covers the cost of sale of that property plus the profit on top, plus all the costs of the 48% of listings that do not get sold that the agent has to carry the cost of. A bit complicated but you list 10, sell 7 sstc, and complete on 5 as 2 fall through. So you get paid on the 5 you complete on but that fee has to cover the cost of sale, plus profit, plus the cost of marketing the other 5 you fail to sell.

From: Andrew Stanton Estate Agency Insights Strategies 08 May 2019 21:54 PM

Hi James, some very valid points, but I am amongst other things an analyst and I look at lots of new starts, particularly Proptech companies, but also any new businesses that show up on the block. Many have new ways of doing business, and often they are in their second or third round or funding, but what 95% of them have in common I find is that when you look at their annual accounts or annual reports, they make zero profit at best or a massive loss which grows year on year. From beer brewing companies - yes lots of revenue - but tiny tiny profit margins, to well online only estate agents. I think in a decade people will look back on the present and see that just because someone has an 'idea' it should also pass the bank manager test, ie, would your local bank give you money to help fund this idea (I know these days you would never see a bank manager - but you get my drift). I am all for pushing the envelope, but more and more angels or shareholders are being encouraged to part with cash with no chance of a return, because there is a whole industry making folk feel that the next big thing is around the corner. If a business idea is a good one, does it need a 500K initial investment to get it up and running?, and if it does would the local bank have said yes to lending their funds?

From: Andrew Stanton Estate Agency Insights Strategies 08 May 2019 09:29 AM

Justin as you say - Paul Pindar - ex Capita - ringing bells for anyone?, I think he parachuted out in 2014 … and 18 months later … mayhem- well as they say history often repeats itself. And how many directorships has Mr Bruce now had? And where are the companies he left behind now? On the flip side he is probably in a personal capacity the richest and largest 'disruptor' in the estate agency realm. He certainly has disrupted lots of investors, and the German communications giant Axel Springer, who has has lost 69% of their 120M plus investment - by buying shares at the wrong time. Also of course there are hundreds of LPE's whose lives have become disrupted, and finally I think 48% of all vendors who paid Purplebricks money upfront, they have definitely felt the disruptive force of Michael, as they did not even get a cake, let alone a successful sale. Maybe they should start a PPI style mis-selling campaign and ask trading standards if they can claw back their money plus interest. Personally I think Michael with all the millions he got from selling his shares, will be extremely glad to be out of the firing line, a bit like Cameron post the Brexit vote. Though I am not sure the PB board members will be as resilient as Mrs May though, more likely to see some industrial throwing of people under buses in the coming weeks - metatheoretically.

From: Andrew Stanton Estate Agency Insights Strategies 08 May 2019 08:50 AM

Hi James - regarding a change of strategy, PB should first employ a sales team to market the property they list, second instead of apologising to shareholders for mounting losses - PB should refund the 50% of vendors who paid upfront and only got to eat cake (hang on didn't some French lady come up with this idea - just before 'the great terror' caught up with her). My thoughts are that PB's cash burn is so rapid they will soon be looking for yet more cash from a new round of investors/victims. That will be the real tragedy.

From: Andrew Stanton Estate Agency Insights Strategies 07 May 2019 23:06 PM

No online agent will make a penny profit in 2019, and with 5 large online agents closing or being forced to close since last September, it is likely that those brave online agencies still burning sometimes as much as £1m a month, may well decide enough is enough. The fundamental flaw is that estate agency like all business is certainly becoming high tech, but the cost base of a sale is still on average £2,500 to break even, and listing property on portals is not the same as having a sales team selling them. So, under-charging clients, relying heavily on tech, and deciding not to have a sales force to ‘sell’ property is always going to result in loss, lack of engagement with the clients and buyers, and an unsustainable business model, always looking for another round of cash from shareholders. It costs only 160k to cold start a single traditional estate agent, typically producing 95K revenue in year one, breaking even at the end of year two, (so all seed capital returned) and then making profit year three, and 20 to 28% profit by year 4 onwards. Just think of the tens of millions pumped into Purplebricks, and others, it could have set up a national chain of 120 branches, with the money it has used as cashflow. Many of them would have paid their investment back and actually be paying dividends to shareholders. Maybe that is why 96% of estate agents are not purely online. Thoughts?

From: Andrew Stanton Estate Agency Insights Strategies 07 May 2019 10:11 AM

Purplebrick's epitaph will be: - we took millions of pounds from vendors and never sold their property, and we ran a massive TV advertising campaign involving cakes in the face. More of a cheap circus act, than a sustainable, profit making enterprise.

From: Andrew Stanton Estate Agency Insights Strategies 07 May 2019 09:43 AM

So, share price 685p, at its height, now share price 7p down from 10p in recent weeks. Tell me again why after a multi- bailout less than 12 months ago anyone would buy shares in Countrywide? The remaining shareholders will sell their stock, and with no buyer wanting this huge,flabby company, the best pieces will be sold off, the remainder closed, leaving a very depleted rump of an agency which will trade on, losing money hand over fist until it closes, or the thinking at the top changes. Very sad, maybe top management might stop trying to convince everything is fine, get a plan, make the necessary cuts and sell off what is required to recapitalize, take a look around at retail, here company's are either adapting their business model or calling in the liquidators, sure things are tough, but that is when really good executives shine. That after all is their job, rain or shine - return a profit, safeguard jobs and plan for the future. I would start with high fees, high levels of customer service and high levels of successful sales. The rest will sort itself out, if you have a product or service the public want it will not be google ads that make them seek you out, it will be your market share. Unfortunately, time has now run out for Countrywide and this Easter bunny is looking more and more like a steaming Turkey long before Christmas. The more the company says, we will not be selling off the profitable parts of the company, the more it sounds as if that is exactly what they must do to try to survive. Note also Purplebricks share price has in recent days crashed also, to sub 118p from a near 145p plus position only a few days ago, it seems the cruel crosswinds of reality are starting to blow in the face of lots of non-profit making property sector companies, whilst some companies in the sector will produce healthy profits by the close of 2019, as they have different marketing models that actually work.

From: Andrew Stanton Estate Agency Insights Strategies 25 April 2019 05:53 AM

A month ago I foretold that the 120m cash injection that was pumped into countrywide, post platt’s departure was now all but eaten up. Now the day of reckoning is very close, the share price will probably collapse in very short order. If only the company had looked to the future 5 years ago, when it was cash rich and moved forward, instead of relying on too many board members who had zero property knowledge.

From: Andrew Stanton Estate Agency Insights Strategies 24 April 2019 23:22 PM

Purplebricks share price is dropping like a stone, and there has never been a dividend payment. The American and Australian business is never going to make profit, and it is debatable if the UK division will make more than 4% gross profit on a turnover in excess of 100M +. Delprete has long been an advocate of Purplebricks, but he is backing the wrong horse. With increased transparency from Trading Standards based in Powys, and the fact that 50% of Purplebricks vendors pay upfront for a service they do not actually get - the completion of their property. There will either be a call for refunds (so a PPI scenario) or a public warning at point of instruction 'only one in two of Purplebricks vendors get their home sold by Purplebricks, the other vendor gets 'a cake in the face.'

From: Andrew Stanton Estate Agency Insights Strategies 23 April 2019 06:15 AM

I agree that new home builders can sell at a higher value due to help to buy, but on the flip side I have met many vendors selling their new home who enjoyed a large equity slice from buying a more expensive home, then sold and used the 75% slice of the equity to buy another home. Also, if a brand new home sells at an inflated value as it can sell to a help to buy buyer, does this value not help the second hand market as older property will also benefit from an uplift. Eg, if a new semi retails at 300k, then a 20 year old semi 500 metres away is not going to sell for 200K,

From: Andrew Stanton Estate Agency Insights Strategies 11 April 2019 09:16 AM

I am not sure why levels of transactions should fall, if agents educate vendors, for some it is a great time to move, sell for a little less and buy a larger property for a little less, and in fact the cost of move is less than it would have been in autumn 2017 the peak of house prices. Agents are in the market for the long haul, outside factors, interest rate rises, wars, change of governments, stamp duty etc all play a part, but the population is growing and people need to buy homes, so there is always a market. Typically for the past several years there are between 1 to 1.2M completions a year, that is a big cake of sales for everyone,

From: Andrew Stanton Estate Agency Insights Strategies 11 April 2019 09:08 AM

With the present shortage of property coming to the market, and given that repossessions are chain free, and often in the lower price bracket, it is of no surprise that they are selling marginally above suggested selling prices. Also, as the marketing prices are set after the lenders have very detailed and accurate information on likely sale prices, these properties tend to get more attention from buyers as they are more realistically priced at point of sale.

From: Andrew Stanton Estate Agency Insights Strategies 11 April 2019 08:53 AM

The housing market is just that, a market. So, any intervention regarding restricting house price inflation or otherwise would to me seem to be a utopian concept. The reality is that with over 20 housing ministers in less than 15 years, and the lack of a cohesive housing/property policy, the government already regulates housing prices, often by imposing regulations and laws that are ill thought out and definitely lack input from those in the know. Case in point the Lettings ban, brought in to defend tenants, likely outcome, letting agents will charge landlords higher fees to absorb costs, and landlords will raise rents to cover this cost, who pays more - the tenant, maybe someone in Whitehall should talk to our industry before they do anything. So the thought of a government department being responsible to keep house inflation under wraps is just plain scary, let the market be, otherwise it ceases to be a market.

From: Andrew Stanton Estate Agency Insights Strategies 11 April 2019 08:47 AM

With an uncertain market, and still months of uncertainty ahead, the auction route is a very positive solution for problematic housing stock, and an extra option that intelligent listers can add to their presentation when looking to gain new business. I have found that the prices achieved at auction are comporable to selling by private treaty, and of course the speed of transaction - the fall of the hammer, instead of a protracted 14 to 16 week sale process is also extremely favourable. Many agents would do well to educate their vendors about the benefits of going to auction, motivated buyers with finance in place, versus buyers in some cases in long chains with all the inherent problems that involves.

From: Andrew Stanton Estate Agency Insights Strategies 11 April 2019 08:35 AM

It is good to see Ewe Move in the black, just. But out of all the franchises of Ewe Move how many actually made a profit themselves? All of them, 50%? And the 500k turnover figure sounds great, but what level of profit did it make, remember turnover vanity, profit sanity.

From: Andrew Stanton Estate Agency Insights Strategies 10 April 2019 18:04 PM

So Purplebricks thinks traditional agents dupe the general public? When I read the article in the Times, I thought the article was going to be about online agents who take a fee regardless of whether they sell or not. As I see it PB generated over 90M last year, mostly from upfront fees, if they only completed on 50% of sales that means around 40M of the general public's money went into the coffers of PB but with nothing to show but a cake in the face. Maybe Mr Bruce could furnish us all with proof that he provides a transparent service, starting with whether or not the 'self-employed' LPE's tell the vendor in front of them that they are getting an instant referral fee the second the vendor signs on the line that is dotted. If no disclosure Trading Standards in Wales will be very happy to investigate.

From: Andrew Stanton Estate Agency Insights Strategies 10 April 2019 17:59 PM

It will be interesting to see what route the government takes regarding regulations, will it be another way to introduce even more red tape into the industry? Or will it help estate agents? Personally I think education and industry experience is as important as any new qualification. We all know that many of the branch administrators who have been in situ for years have probably more 'knowledge' than most of us.

From: Andrew Stanton Estate Agency Insights Strategies 10 April 2019 17:49 PM

I think Professor Andrew Baum, would do well to actually spend some time in the industry he talks so condemningly about. A couple of years ago I remember him stating from his ivory tower that “The process (buying and selling property) is not satisfactory from anyone’s point of view. Estate agents aren’t aligned with the vendor, they aren’t motivated to get the best price or best execution, [they just want] a fast sale,” he says. “There’s a lot of money to be saved and therefore a lot of money to be made from tech platforms that can make that process more efficient.” Andrew then went on about Purplebricks and other online agencies being the start of a Proptech revolution. Well my thoughts are that agency is a contact sport, and that is why some agents, the ones who have spent years in the same community and have worked countless hours, are making very large profits. Why? Because they do look after buyers and vendors and they do take a professional pride in what they do. In contrast the new boys (onliners) are raising tens of millions, spending far more than they raise and offering the clients - buyers and sellers a bargain discount level of service. Years ago in the mid 1990's I was using an automated system alongside a really good team of sale people, so Proptech is great, but like having a bespoke suit made by a tailor I am sure a robot can be programmed to make a suit, but the personal dynamic would be missing. I like and embrace technology, but I think that just because billions of dollars is being put into start up Protech in America does not mean that any definitive solution will be found anytime soon.

From: Andrew Stanton Estate Agency Insights Strategies 10 April 2019 17:36 PM

Many agents and new hone companies do recommend inhouse solutions regarding finance, but the alternative is often waiting a fortnight to get in to see your existing lender who will of course only advise on their own product. It is of course not permissible that an agent makes a buyer use a certain mortgage solution recommended by them, as a condition of buying a property through them, and buyers must have the freedom to use who they want to. But, on the flip side the vendor or housebuilder does want a transaction to go through, and if the selling agent has control over the finance, a key element in getting to exchange, is this such a bad thing? If there is transparency regarding any referral fees I think that inhouse advice should be seen as a service, rather than a way to get the buyer to use them. Yes property finance is a multi million pound industry and financial services makes up a large amount of some estate agency companies income, but if agents and housebuilders did no 'inhouse' advice where would the buyers go to get their mortgages? and would these providers be the ones making profit out of this service? For me it is like buying a car on finance, if I wanted to go down that route, every large dealership has an inhouse 'finance' person ready to quote, I can choose not to use them, but it acts as a starting point in my exploration of finance options, and if I use them, well probably someone gets a fee for getting me to speak to them, but is that not commerce?

From: Andrew Stanton Estate Agency Insights Strategies 02 April 2019 08:49 AM

Having raised 300k 3-months ago on Crowdcube - stating that the company was worth 9.8M (where do people get these capitalisation figures from) and now looking to change their business model, ie, get self employed local property experts to expand their empire, I think they just need to concentrate on getting more people to invest in them and forget the agency bit. Endless rounds of raising capital for a failed business model seems to be working, not so much for vendors who want to sell, but for the people who put themselves out their. How about some hard facts, how many properties listed at £99 has the company completed on, or properties rented out at £49? A quick look on 99Home's webpage shows that the investors money is in safe hands. I am not against a new business model in estate agency, maybe even the one where experienced agents are replaced by the internet, but until someone shows me a profit making model, year after year, I think that 95% of the general public are going to stay with the 'traditional agent.' Being an online agent does not give a company a commercial edge, as All agents are online. It just so happens that many also have offices in prime locations with experienced teams, who come rain or shine create great profits, by just doing their job, which they take a pride in.

From: Andrew Stanton Estate Agency Insights Strategies 02 April 2019 08:27 AM

Sadly, I think Countrywide will soon run out of money, people forget that in the last 12 months they had a 120M cash fillet from new shareholders just to keep the company going, and in 5-months they will be through this, and the company will then need to asset strip, close offices and pray that the market improves. Instead of a 3 year back to basics plan, the COO needs a 6 week call to arms, as that is the timeframe for the 'best market' of 2019, before we hit June and holiday season. I used to work within this company, what went wrong?, when was the strategy and vision lost, five years ago the company had the finance to push forward into the future head on, instead it is defeated, deflated, and undercapitalised, cutting back on IT and Proptech at the critical point winning companies are utilising these tools to takeover huge swathes of the day to day business, freeing up salespeople to engage in what they do best sell. Madness, and I don't mean the band with Suggs as the lead singer.

From: Andrew Stanton Estate Agency Insights Strategies 28 March 2019 12:19 PM

Obviously, I am biased but Chris & Co are bang on the money, in that agents should be using a large budget to market themselves, just as they would if they were a cold start office. By putting extra cash into evolving the frontline business, a company can ensure a profitable future. I often ask my clients what is their annual budget for getting new landlords, vendors, and aligned business revenue streams on board? and often it is a tiny fraction of turnover. Agency is based upon instructions, lettings is based upon landlords, so what strategy is in place to generate these? Before I became a consultant and analyst helping companies to see the wood for the trees, I was an agent for 30 years. And I know that to take time out to plan, to look at the shape of your business and evolve, is a rare occurrence as their seems to be no spare time. But, by working 'smarter' I have helped many business owners to work less hours, make more profit and enjoy the challenges of the differing markets. Many agents are now in the Brexit bunker, going through 'groundhog' day and as my mentor once said, and I think he attributed it to Einstein, 'insanity is doing the same thing and expecting a different outcome.'

From: Andrew Stanton Estate Agency Insights Strategies 27 March 2019 06:54 AM

I have not checked recently, but it used to be the case that Purplebrick's had either a 5 star review or a 1 star review, on Trustpilot. But, never a two, three or four star review. So, does a 5 star mean my home got sold and 1 star mean I paid over a thousand pounds but only got a cake in my face? And with thousands of reviews surely someone would give a 2, 3 or 4 start review. On a personal level having suffered from a negative fake review on Trustpilot in my agency selling days, from a 'reviewer' who had not used my services, and it took me 6 weeks to get the review sorted, I do wonder if large company's are doctoring negative reviews as logistically it would be a huge undertaking on the part of Trust Pilot and the company concerned. Maybe the jury is still out on this?

From: Andrew Stanton Estate Agency Insights Strategies 25 March 2019 10:32 AM

Whilst I am all for clarity for the general public, is trading standards going to ensure that all service industries that estate agents use, tell estate agents about referral fee agreements? As in the world of commerce there are to my knowledge hundreds of financial referral systems in place, and the poor downtrodden estate agents should be protected from these 'money grabbers', feeding off of them. I really do not understand why estate agency is viewed with such contempt, we work extremely long hours, have a smile, and have to deal with lots of red tape, ineffectual government and housing policies dreamed up housing ministers who hold their position for about five minutes. I think there have been 15 housing ministers in the past 20 years. End of rant, taking Zara the dog for a walk, quietly hoping that no-one takes advantage of me by gaining a undisclosed referral fee out of my shopping habits over the next week or so.

From: Andrew Stanton Estate Agency Insights Strategies 20 March 2019 12:11 PM

Good for the MP and good for the young entrepreneur. But, which year will Doorsteps make a profit? Will the MP be asking this?

From: Andrew Stanton Estate Agency Insights Strategies 19 March 2019 10:05 AM

Anything that reduces fall throughs is great. But, sales fall through due to; - death of vendor or buyer, lack of ability to raise finance vendor/buyer, chain breaking above or below, vendor deciding not to move, vendor deciding not to move, the list goes on. So, tying parties to exchange will never overcome quite a large list of reasons why sales go South. In my books the average time that a sale takes is a big factor, 18 weeks - from sold subject to contract to moving in, that is also a massive stumbling block. Thoughts anyone?

From: Andrew Stanton Estate Agency Insights Strategies 19 March 2019 10:02 AM

Brexit may be a factor - but the usual boom bust cycle of the UK property market should also be taken into account.

From: Andrew Stanton Estate Agency Insights Strategies 16 March 2019 19:01 PM

First time buyers are the main buyers at present in many areas as they are seeing prices dropping in real terms.

From: Andrew Stanton Estate Agency Insights Strategies 16 March 2019 18:59 PM

Having adopted Proptech in 1996, not a typo - in my own agency, the leverage it gave us was that each sales person was in fact creating the business of two. We were quicker and more responsive and the general public loved our innovative style blended with traditional service levels. But, the cost of the bespoke software, ongoing service/maintenance/updating systems and time given to all of this, including headspace time given by the company owner has to be factored in. If you have multiple branches Proptech is a good solution, but even now I find there is very much a one size fits all approach, ie, I have a solution Mr Estate agent to all of your woes, without spending a day with Mr Estate agent and finding out how his or her empire actually works. Bespoke solutions for bespoke businesses will be the way forward.

From: Andrew Stanton Estate Agency Insights Strategies 15 March 2019 09:30 AM

This article re-enforces what everyone in the industry knows, roughly one in three sales fall through. I know it will be a small study group, but if 16.66% of buyers pull out and 11.11% of vendors do the same then that is a cancellation rate of 28%. In a more buoyant market that rate fluctuates to 30-35%. I am not sure regulation by the government or any organisation will change that situation, buyers circumstances change, so too does the vendors. Chaining down either party pre-exchange with reservation agreements is just another level of red tape. Also, given Brexit, I think that MP's are the last people I would want to be tinkering about with the house selling process in the UK, some of whom are talking strongly about resurrecting the HIP's system. I am all for keeping sales together and making agencies profitable, but a think tank of estate agents who do the job day in day out - would be where I would start for good pointers - rather than persons who have never sold property, or used to but are now living in ivory towers, oblivious to the needs and wants of vendors, buyers and estate agents in 2019.

From: Andrew Stanton Estate Agency Insights Strategies 15 March 2019 09:09 AM

Has anyone got an up to date set of accounts for YOPA? As I am not sure what the profit and loss situation is? On company's house it appears no accounts for 2 years, or maybe my eyesight is failing me. It would be nice to think they were turning a profit, but without figures who can tell? You know what they say, turnover vanity, profit sanity. For me being a big agency, really means nothing if it is by volume of listings rather than the bricks and mortar offices you have, as we saw with Emoov 1, once the computer is unplugged the agency fails to exist and residual assets are minimal.

From: Andrew Stanton Estate Agency Insights Strategies 14 March 2019 08:55 AM

So, share price 685p, at its height, now share price 8.5p down from 10p in recent weeks. Tell me again why after a multi- bailout less than 12 months ago anyone would buy shares in Countrywide? The remaining shareholders will sell their stock, and with no buyer wanting this huge,flabby company, the best pieces will be sold off, the remainder closed, leaving a very depleted rump of an agency which will trade on, losing money hand over fist until it closes, or the thinking at the top changes. Very sad, maybe top management might stop trying to convince everything is fine, get a plan, make the necessary cuts and sell off what is required to recapitalize, take a look around at retail, here company's are either adapting their business model or calling in the liquidators, sure things are tough, but that is when really good executives shine. That after all is their job, rain or shine - return a profit, safeguard jobs and plan for the future. Get a piece of A4, list what is going wrong, list what is going right and list what is about to go wrong, then do a second list with a solution to things that are going wrong, and execute the plan. No deviation, keep the message simple. You would be amazed. I would start with high fees, high levels of customer service and high levels of successful sales. The rest will sort itself out, if you have a product or service the public want it will not be google ads that make them seek you out, it will be your market share.

From: Andrew Stanton Estate Agency Insights Strategies 09 March 2019 09:04 AM

With the sales pipeline down by 20%, Countrywide's first quarter revenue will also be down by a fifth, add the loss of revenue due to the lettings ban which will start soon, and then transparency on referrals, I think that unless 30% of branches close, by this time next year there may be no Countrywide. Also, this nonsense about a 3 year plan and back to basics, this sounds very confusing. A three-year plan sounds like a communism and back to basics sounds like the conservatives. I turn clients businesses around in 6 to 8 weeks, if I said I have a 3 year plan to cut your debt and increase your profit, most of my clients would rightly tell me where to go. I like Countrywide, because in 1986 one of their brands made me a manager after only 14 months in the business, but back then they had a structure, and a strategy and an identity, that made them unique. Also, most importantly, they sold huge amounts of property and their fees were sometimes twice that of the competition and they loved the fact that they were the agent of choice. Last month I personally called over 150 agents as an exercise for a client, in those calls I spoke with a number of Countrywide offices, and they seemed to have two voices, either condescending and in your face or disinterested and beaten, there were plenty of other agents who had the same voice also. In contrast, the agents who were market leaders in their areas, either corporate agents or independents, had the same voice on the end of the telephone, professional polite, non-pushy, and interested in what I had to say. Many of those were mature agents who clearly were loving their job, or young men and women who reveled in customer care. Maybe, the COO's of this corporate should ring their branches, not to spy on their front-line team, but to understand that if prospective clients call and are greeted by negativity or a sales team who do not listen, then the business will not make profit. Sure, Proptech means only 7% of business comes directly from a telephone call, but if a branch has never made profit in the last 5 years, and by profit I am saying 28% gross profit on turnover in all disciplines, then maybe the front line troops are confused, badly trained and possibly in the wrong profession and the buck for that stops right at the top. Worringly, when top management say we are not going to sell off part of the company, that is very similar to the PM saying I have every faith in a certain MP, which often as not is followed by the said MP resigning. My diary is a little busy at present and I am away in sunny Barcelona on holiday until next week, but if Countrywide would like some sound advice, I can certainly impart it, and they would not need to wait another 24 months to start turning around those loss making offices. And those vulnerable offices about to go the same way with sales revenue and other revenue streams about to be cut. As a point of balance though I was an independent agent for half of my 30 year sales career, I also did time for another corporate who recently posted profits, more than twice those of Countrywide. It comes as no surprise that all the managers and teams I was privileged to work with, were always on it, and the management teams through to the COO's had a strong, strategy based on customer service. Also, though it was a corporate, each branch felt like a premier league independent agent, and had enough autonomy at branch level to make the customer feel the same way. And that is a very hard thing to accomplish.

From: Andrew Stanton Estate Agency Insights Strategies 07 March 2019 18:53 PM

I think Savills always saw YOPA as a punt, rather than the future of agency, otherwise Savills would have tried the Countrywide conversion scheme mooted by Alison Platt, wisely it has stuck to high value for money service. But clearly, if they write down the value of YOPA or not, the value of online only agents is falling in more ways than one, both share price - see Purplebricks, and confidence in the model. In a tight market vendors like the comfort of a proven marketing model, and traditional agents are just that. Agency, sales and lettings is changing, following Fintech, multi-millions are now being poured into Proptech, and possibly in the next five years the new model of agency will come into being. But, the online model of a Local Property Expert covering multiple roles, lister, negotiator, etc just does not work.

From: Andrew Stanton Estate Agency Insights Strategies 07 March 2019 07:09 AM

Hi Graham, thanks for that advice, I am fully aware of who can complain, but as I am not likely to be a customer of PB, I will not be triggering that issue.

From: Andrew Stanton Estate Agency Insights Strategies 06 March 2019 09:17 AM

Why has the ASA not looked into the fact that my favourite online brand Purplebricks advertise on TV no commission, yet the self employed Local Property Experts, earn commission from each property they are instructed upon, with a further commission for accompanied viewings. So, they get a fixed commission on every listing. Or should ASA be looking at all the LPA's who trade mostly as sole traders or the instructing estate agent, and make sure the LPA's tell the client that there is a 75% commission being paid to Purplebricks for listing, not selling the property. The big thing the ASA should look at is if PB UK list property by taking a fee upfront and that revenue in 2019 is 120M to 130M but only half of the clients get a service, eg get sold, then PB are getting 60M plus upfront for doing nothing, with no refund policy. NOW THAT IS CAKE IN THE FACE.

From: Andrew Stanton Estate Agency Insights Strategies 06 March 2019 08:15 AM

smile please - I think that will be the final pb model - self listing. the other thing to look out for is this - with referral fees about to be the hot topic - will pb have to become transparent? In that will the self employed lpe have to say to each new prospective vendor 'mr vendor I get an immediate 250 pound fee when i sign you up as an instruction' 'I was referred your information from a multi million pound intial tv and online spend by a separate company pb' 'I also give pb a 750 pound plus portion of your fee as a referral fee for their service to me' - anyone at trading standards in Powys like to comment?

From: Andrew Stanton Estate Agency Insights Strategies 04 March 2019 15:43 PM

I do not understand why people are investing in online agents? I did an article in 2017, showing the business model is flawed. Emoov ceased trading, leaving 5,000 vendors stranded, and LPE's without pay, and now son of Emoov has been resurrected a bit like the son of Frankenstein, a badly put together monster but on a smaller scale.

From: Andrew Stanton Estate Agency Insights Strategies 04 March 2019 08:00 AM

A great piece Graham, perhaps now trading standards who appear to be on steroids will at last look at the claims of Purplebricks that they complete on 80% of the properties they list. Your story underpins the fact that 50% of vendors pay money to have a cake pushed in their face, ie, they pay a fee upfront, and get nothing but to dive head first into a cake. 'Cakemissery' In October 2017 I wrote a full article about online agents, in it I discussed Easy Property, Tepilo, Emoov, Housesimple, Hatched, Yopa and Purplebricks, I showed statistically that all of them completed on 50% of their listed sales or less, and that their cost base would kill them off. Easy property never got started and morphed into something else, Tepilo closed, Emoov closed (son of Emoov now opened) Housesimple appear to be on the brink and Hatched closed. This leaves Yopa and Purplebricks, well both of these are not making any money. The bottom line is always the bottom line, list two properties, complete on only one. Any agent who says they can complete on 8 of the ten houses they originally list is misguided. And with the new wave of Trading standard protocol upon the industry, all agents traditional and online will need to be declaring their referral fees - which will for online agents prove very interesting. I attach the first three pages of an article I wrote in October 2017, so the data is from that period - but my hypothesis about onliner's still holds true, over 40% of vendors pay for a service they never receive, and you can not run an estate agency with only 'Listers' doing the job of a manager a lister a negotiator, an administrator and a sales Progressor. By 2020, traditional estate agents will be dead, and online estate agents will sell half of all property in the UK. Written by Andrew Stanton - (Estate Agency Insights & Strategies) Oct 2017 This is a common enough headline and I thought so too, until I looked at the facts and realised; no online agent is making a profit, many online agents are propped up by large, regular injections of fresh capital, and the mature online estate agency model has no asset base and so no brand value. Let me explain my hypothesis, the business model behind traditional bricks and mortar estate agency is that they get revenue from, fees on completed house sales, usually on a no-sale, no fee basis. They also get further revenue from arranging mortgages and life cover and other insurances, or receiving fees for passing clients to providers of mortgages, revenues from solicitors for referring clients, and other add on services like the provision of EPC’s, etc. Now suppose you want to start a brand new traditional estate agency, how much profit will it make and when? and how much does it cost to set up and run? Here are the figures; it costs 30k to acquire premises and kit the office out and have all the IT hardware, systems, and office furniture in place. Then it costs 18K a month to cover the overheads, for a team of four-sales people and their salaries, cars, website costs, and all other costs to run the office and sell properties. A traditional agency trading 50-miles from the capital will then market and sell property in all price ranges, mostly from £200,000 to £600,000, and as the brand matures they may specialise in both the mid-range and the top end range £800,000 to £1.5M. On average they sell property at an average price of £360,000 and they charge 1.1% plus VAT, or around £4,000 plus VAT, £4,800 in total on a no-sale, no fee basis. In the first 12-months of trading – Year One - if they sell a property day one, the cheque for the completed sale arrives five-months later, and as they spend the first month getting property stock on the market, it is in their second month real sales begin. So, after six-months of trading they have spent 30k on setting the office up and 108k on running costs, that’s 138k, and probably they have received only 5k in on commission from completed sales. Over the next six-months their outgoings are another 108k, and the commission from completed sales dribbles in, plus VAT, at a rate of, 5k month six, 7k month seven, 10k month eight, 12k month nine, 14k month ten, 18k month 11, and 20k month 12, total 86k. So, 236k spent out, and 86k cash flow in. Profit; what profit? there is no profit, they are now minus 160k for the first year. Over the next 12 months – Year Two - office costs are 19.5k a month, and income from completed sales is 26k a month. So 234k spent out, and 312k cash flow in. Profit; 78k for the second year. In the next 12 months – Year Three – office costs are 20k a month, and income from completed sales is 28k a month. So 240k spent out, and 336k cash flow in. Profit ; 96k for the third year. And more importantly at the end of year three, true break-even is achieved, all the start-up capital, that £160,000 pumped in and ‘lost’ in year one, has been repaid and from here on in they have a profitable business standing on its own two feet, with no need for further injections of capital to keep it trading. So, 160k ‘loss’ (start-up costs) in year one, plus the 78k profit year two, plus the 96k profit year three, means a 14k surplus on the venture after 36-months. In next 12-months - Year Four – office costs are 20.8k a month, and income from completed sales is 30.8k a month. So, 250k spent out, and 370k cash flow in. Profit; 120k. So on a turnover of 370k generated solely from commission in from completed sales, a gross profit of 120k, or a 23% profit margin. By year ten gross profit could be 400k. Now on this example I have purposely, not fed in the other revenue income streams, revenue from mortgages, life cover etc, because in the start-up phase, a lot of these income streams are neutralised by the start-up costs of an extra member of staff and new equipment, IT etc. For instance, a mortgage advisor costs 40k to sit in an office, and will take a year to cover his basic cost, earning no profit, but in year three of doing business they might generate 80k of profit, similarly an estate agency might set up lettings, again it will not become profitable until it has 40-properties let and managed, and so it will produce a negative cash flow for its first period of trading, but in year ten could generate 250k of profit. In a mature 10-year model, financial services can add up to 40% gross profit to the business annually and lettings can add 30%. So, if in year ten, selling property generated 400k gross profit from commission from completed property sales, moving on from the 120k of year four, then financial services would add 160k gross profit and lettings another 250k gross profit, plus solicitor introductions, re-mortgage business, new homes, so a total gross profit for the one office 800k plus. Now, if you opened 10-cold start offices, two would not make great profit, two would make super profit and the rest would be a mixed bag, due to local competition, lack of a good sales team etc. But, in the real world, statistically a 10-office cluster of agents will constantly generate at least a collective 2.4M gross profit, which ties in with the notion that a single office in year seven of its development should produce a 234K profit. Having looked at the traditional estate agency model for generating wealth, there are three other important factors at play; most ‘traditional’ estate agents only charge a fee on exchange of contracts, so on a no-sale no fee basis; nationally, 50% of all the property that an estate agent lists (takes to the market) in a year they fail to sell; estate agents get paid huge commissions which is unfair. The no payment until the job is done means that the agent is highly motivated to find a buyer; otherwise all the marketing costs are lost. Also, as their agency agreements are time specific as time passes, estate agents are more and more pressured to find a buyer before the vendor goes to a second agent. The fact that half the property stock does not sell means that the fee charged by the agent actually covers, all the cost of the sales of the property that have exchanged, and all the cost of the properties they listed and failed to sell. So, list two properties, sell and exchange on one, lose the other, and the fee from the sold one covers the marketing costs of both, plus profit margin. Interestingly, of the 50% of properties that are not sold by the first agent, over 60% of these are sold by the next or third agent instructed, so over 80% of property does get sold if it stays marketed. So, as an example if an estate agent generates 320k of revenue excluding VAT in a year, just from completed sales, that is, 80-completed sales at an average fee of £4,000 plus VAT, which is around 1.1% plus VAT of a 360k property sale price. This £4,000 plus VAT fee is in fact covering the cost of selling the property and the cost of marketing another property that was never sold, (one of the dead loss 50% which they lose to the second or third agent). The old chestnut that the agent gets paid a huge commission is debatable. Individual sales people may get a 5% or 10% commission of the fee, which is a huge incentive to sell the property, but their basic salary will be at a low level, and they will usually work at least a 50 to 60-hour week, and they will in the main be extremely skilled in their profession. So, if you start to work out their hourly rate, factor in their low basic salary and then factor in they earn commission at a rate before tax of either 5% gross of the £4,000 fee, so that’s £200, or 10% gives them £400, they are not going to be buying a yacht anytime soon. Also, I have illustrated that the onerous office costs month in month out, also mean that many managers or owners earn a reasonable amount, but again there is little fat in the business. The vagaries of the market, government intervention on stamp duty, general elections, etc, can often skew trading patterns, so with a good team a mature estate agency might trade on a gross profit of 30% plus. But, many agents trade on a margin of less than 10%, despite being number one in their areas, which is not indicative of inflated commissions being charged. Now, suppose you want to set up an online estate agency, how much profit will it make and when? And how much does it cost to set up and run? To my knowledge no online estate agency has yet made a penny profit as of October 2017, and some have been trading over eight-years. So, I am going to look at Purplebricks (UK), to illustrate the online business model and give an insight into how they trade, as from what I can see all online models are a variant on this company. Purplebricks (UK) or (PB) is less than three years old, and follows in the footsteps of Hatched and Tepilo some of the original trailblazers which were created five-years or more earlier. (PB) ‘the property market disrupter’ are by far the biggest online estate agency, claiming they will make a profit of around 6M in 2019. At present according to Rightmove, they nationally have over 28,000 properties listed online, over 16,000 for sale, and 12,000 under offer, an impressive tally. Though not profit making, they dwarf the online opposition in the number of properties they have online. Their share price is through the roof, as they generate a huge amount of cash through put, but no profit has ever been made. (PB) charges £849 including VAT, to list your home, and £1,199 including VAT in London, and their intention is to sell the property, but the fee is fully payable should the property fail to sell, unlike the traditional estate agents no sale, no fee proposal. On the surface the business model is low cost with many traditional estate agency elements stripped out, such as no bricks and mortar premises, and it is front end cash generative. There are no dedicated employed sales teams, as per the traditional estate agents, instead they have instruction getters or listers, termed Local Property Experts, (LPE’s) who are self-employed, and receive a commission per instruction listed. They then earn additional commissions from selling add on products and services such as; accompanied viewings, conveyancing leads and financial services etc. A big part of their business model apart from the ‘low fee’ is that they advertise they do not charge a commission, just a fixed low fee. Well given that the LPE’s get an instant commission somewhere in the region of £400, per property listed, a fixed percentage of the overall fixed fee charged to the vendor. This model strikes a strong chord with the traditional employed sales person sitting in a cosy office being paid £400 commission for a successfully sold and completed sales transaction. I wonder if vendors are aware that the nice young lady or gentleman sitting in front of them stands to personally earn an instant - £400 of the £900 plus VAT fee they are charging each time they get them to sign to sell, (even if the property fails to sell). I also wonder, and I know there is a Gig economy vibe out there, but will the tax man soon think these 450-people are really employed, rather than self-employed?

From: Andrew Stanton Estate Agency Insights Strategies 04 March 2019 07:46 AM

Quote from Gosling CEO of House Network - in 2017 “As more people feel comfortable with the online model, we expect online agents to grab a bigger slice of the UK estate agency market. Currently, online estate agents have around 5% market share. We believe this will increase to 15%–20% by 2020,” In 2016, the business received £13m of investment from Carphone Warehouse founder, Sir Charles Dunstone. The Reality in 2019 So far this year - online agengies are only 5.2% of all new listings, with many big online brands going South since last September, together with 10's of millions of institutional investors / private investors money. The ever growing list includes, Tepilo, Hatched, Emoov - though son of Emoov has been born and now probably House simple. Unfortunately there will be more to follow, Doorsteps at £99 an instruction are looking vulnerable- they will need to crowdfund again soon to bail them out, but this time I think that the investors at crowdcube will think 800k invested, zero profit … time to keep my money in my pocket especially with the winds of Brexit upon us. Of course there is still PB - yet to make a penny profit. But the good times - well average times, judging by share price may be at an end, especially as all agents are about to come under scrutiny due to the new Trading standards for estate agents, calling for transparency over fees. No longer will PB be able to say no commission, or commissary when they have to explain the 25% referral fee that every self employed Local Property Expert trousers per pay upfront instruction. I foresee cash flow drying up when prospective vendors are made aware, sale or no sale, the person in front of them is about to get an instant £250 just for listing their home. Now that is misery, cake in the face anybody?

From: Andrew Stanton Estate Agency Insights Strategies 02 March 2019 10:44 AM

Just a thought, but ... Under the new guidelines - when a local property expert - (who is a self-employed individual) goes and list a property for Purplebricks, will he or she have to say to the vendor, as soon as you sign this agreement I get £200 plus as a referral fee, and if you have accompanied viewings I get £X, etc. And each time Mr Vendor I sign a new listing up, I annually receive a referral fee of £40,000 (well in the good old days) from Purplebricks. Might this be the death knell of online agents? It is one thing for a traditional agent to say we get £120 as a referral fee for using our solicitor should you want to Mr Vendor. And quite another to say, I get £200 plus as a referral fee from Purplebricks the moment you sign up, sale or no sale. If the Local Property Experts were employees the fee, would not be a referral fee, it would just be a fee, but as the LPE's are outside of the company framework, this fee, or commission, I know PB do not like the word - will need to be disclosed to vendors every single time before a vendor signs on the line that is dotted. So the NTSEA transparency drive may be the start of Purplebricks hidden commissary coming out into the open. Maybe that share price is about to get hit again.

From: Andrew Stanton Estate Agency Insights Strategies 01 March 2019 01:13 AM

I am not about to become paranoid, but following on from an earlier comment I on an EAT piece about about Countrywide's woeful balance sheet, we now have as Graham puts it the National Trading Standards Estate Agency Team, confirming that in its opinion - to be tested by case law - that failure to tell prospective clients about referral arrangements could make all estate agents (including Countrywide) face criminal charges. Pandora's box is at last open, in the name of transparency, those very helpful folk at the NTSEAT feel that if estate agents for instance fail to tell a prospective vendor that the solicitor they are recommending, gives that agent a fee as a referral, then the agent could be open to a criminal court action under the CPRs and probably action by NTSEAT who could close them down. As Graham has also so aptly put, the new NTSEAT (14 page) guidelines are that estate agents must be transparent and plainly communicate to a prospective client: - '(a) The price of its services, including any “compulsory” extras; and (b) Where a referral arrangement exists, that it exists, and with whom; and (c) Where a transaction-specific referral fee is to be paid, its amount; and (d) Where a referral retainer exists, an estimate of the annual value of that retainer to the estate agent or its value per transaction.' This sounds on the face of it a really good idea, let the consumer know all. But, if you are a huge corporate like Countrywide, Connells, etc, and you do refer your solicitor business to a certain solicitor, how will it sound if the agent has to say, 'Mr vendor we feel you may want to use XYZ solicitors, you do not have to, but be aware we get a £120 referral if you do, and annually (and this is the kicker) we as a company receive 2M a year from that solicitor for recommending them.' Do you think the agent will get many takers? It is not just solicitors referrals, that the NTSEAT are talking about, it will cover everything where a referral exists, EPC's, surveys, you name, the agent will need to declare a monetary interest and an annual sum that they receive. In Countrywide's case I am informed that for every £1 of revenue generated by the sale fee, an extra 40p of revenue comes from other income streams, solicitors, mortgages etc. So, I assume that referral fees are at play in this 40p of revenue. What happens if this golden goose, stops laying? On a separate topic, what I find most fascinating in the NTSEAT guidance notes is the sentence … 'Plainly the most important information in deciding whether to accept a service is the price of that service' So trading standards want to protect the consumer, as the starting position for all consumers is knowing the price of the service? My thoughts are, consumers would actually like to know the quality of the service, relative to the cost. And what I mean is this. An agent gets £120 for referring a client to a solicitor, and the company earns 2M a year in referral fees. So, that could look to be a questionable practice. Much better that the client uses some other solicitor, and the agent earns no fee and there is tie up between the agent, the conveyancing of the sale, and the vendor. Is that a better system though? A vendor uses a solicitor who is unknown, they may be great they may be not too good, they may speak to the agent as the sale progresses, they may not. Or, an estate agent recommends a company that it has a massive connection with, yes it receives a referral fee, but due to the huge volume of business, there is also a commercial incentive to get Mr or Mrs Vendor exchanged. Not only this, - there are highly developed software and hardwired processes in place, and management teams both within the estate agency and the solicitors, all with a common aim of getting as many properties exchanged. This interdependence I think is not a bad thing; having had solicitors and conveyancers over the years who never return a call or seem to do anything at a pace (not all) I would rather place my clients sales in the hands of a fully focused large solicitor practice who has the staff and the technology to perform. Luckily, those days are behind me, but my fear is that in the pursuit of transparency, agents might find they are 'pushing' clients away from using their preferred solutions - a brilliant solicitor solution, a brilliant survey solution - and 'pushing' clients out into the unknown. I could be wrong, but if clients no longer take up the recommended suppliers of other related services, because of the money that the estate agent gets as a referral fee, then this lost revenue stream could see many agents struggling. Lastly, referral fees exist in many, many areas of commerce, so will trading standards be searching these out and making the world transparent for all folk, including the beleaguered estate agent?

From: Andrew Stanton Estate Agency Insights Strategies 01 March 2019 00:49 AM

Purplebricks are ahead of the curve, for sure, the curve being get all clients to pay upfront. When the 50% who pay upfront never get to completion and the news leaks out, and new vendors feel this is not a great idea, and cashflow dwindles, then countrywide who made a 5% profit or lsl can swoop in and buy them? That sounds very likely, after all there must be many traditional agencies out there itching to buy a company that has never made a profit, and if anyone quotes to me the fact that the uk part of PB is making a profit, if you add the non uk losses, which are mounting daily it will be interesting to see where the share price of PB is by June. My advice, have a good look at the final balance sheet of Emoov and the monthly spend these onliners seem to need, bearing in mind they have no branches, very little staff, and yet they rack up huge debts, each sale unit actually making a loss. The only disruptor online agents seem to be, is to shareholders bank balances. Maybe Axel Springer will buy more shares, their original investment has dropped by nearly 40%, maybe they have more money to burn. After all with a slowing market, less property coming to the market and a business model which relies upon new vendors paying cash directly day one into PB, it is might be a great idea to be the biggest owner of shares just at the point the share price drops below 100p a share, five times lower than a share was worth 36 months ago. To mis-quote the Prime Minister, when a company has a share price going through the floor, and although the revenue keeps increasing year on year, if each year your losses also get bigger and bigger, then the business model is flawed and does not work - simples.

From: Andrew Stanton Estate Agency Insights Strategies 27 February 2019 07:15 AM

Well, I am surprised that it has taken this long for the poor investors in PB to realise that despite increasing revenue every year, a company that does not make profit, can never generate a dividend. The true cost of a sale for any estate agent, be it a corporate, a person trading out of their bedroom, or an online agent is the same - over £2,000. So if you let vendors have the service for less than this, you never make profit. After years of being in the wilderness, explaining to everyone that PB do not 'sell' 81% of the stock they take on - and only convert about 48%, maybe someone will ask the company to publish their true instructions to completions ratio, and maybe refund the poor vendors who paid up front and got nothing extra. Thoughts?

From: Andrew Stanton Estate Agency Insights Strategies 21 February 2019 17:30 PM

Stephen, I am sure it was a typo but it is only £7,500 annual gross profit per branch I am afraid - 850 branches x £7,500 gross profit a branch =6.375M gross profit. So that is £625 gross profit a month per branch, time to sell coffee and sandwiches perhaps? Or maybe not with Patisserie Valerie having a bad time … is nothing sacred?

From: Andrew Stanton Estate Agency Insights Strategies 13 February 2019 10:38 AM

A 5.26% gross profit is not a sign of success, most successful one branch agencies trade on a gross profit margin of 28%. A national company should be aiming for 12% to 14%. If sold prices reduce nationally by 5% in 2019, then Countrywide fees will reduce in line, which is very likely. Also, if the government bans referral fees from mortgage finance, solicitors and survey business, this lost revenue will also impact on Countrywides bottom line, as I think solicitor referrals alone is worth a large sum each year. I hope that Countrywide do weather the storm, but I would advise closing branches that have never made profit or marginal profit, and put resources into the profit making offices, and perhaps, develop staff and employ great mangers at branch level. Put it this way, if you went to a crowdfunding site and said I have great idea, we are going to generate 627M of revenue in 2018, but only see a 5.26% gross profit, you probably would not have any takers especially if you said the brand was a mature one dating back decades. Thoughts?

From: Andrew Stanton Estate Agency Insights Strategies 13 February 2019 10:31 AM

Whilst I do not think online agents can be seen as a Ponzi scheme, in that some vendors have seen a return on their investment, eg they got sold and completed having paid into the scheme, for many though that is not the case, and increasingly some people are feeling that paying upfront may be the next PPI scandal in the sense that vendors are paying upfront for no return. So I think Purple Bricks and other pay upfront online agencies are going to come under increasing scrutiny as many vendors appear to be paying upfront and receiving nothing in return, and the figures appear to be very large. If you look very closely at this independent analysis commissioned by Purple Bricks by the data experts twentyci which cover the financial year 2017 to 2018, there seems to be some contradictory claims. In the twentyci report, and I quote ... Purple Bricks were looking for a reliable, respected and independent data source to establish answers to a set of questions about their performance in the financial year 17/18′ And Purple Bricks are … ‘No1 at selling houses: 81% of listings sold within 12 months’ Then there is a helpful graph in the same report which shows an annual picture of Purple Bricks results, it shows 64,000 new instructions, 48,000 properties sold subject to contract and it shows 38,000 properties exchanged. Now the ratio of exchanges to new instructions 64,000 to exchanges 38,000 is 59%, so Purple Bricks are not selling 81% of the instructions. But the worrying thing is, if the company gets 59% of vendors exchanged, it fails to get 41% sold or exchanged but still charges them on average £1,100 as an upfront non refundable fee, which is 41% of 64,000 vendors at £1,100 or 28.86M of fee for nothing. Readers of this are going to say the figures are wrong and skewed etc, but twentyci also did a similar report on Emoov and Tepilo, post the recent failure of these two online companies. And the WHICH organization recently had sight of this twentyci report and said that the conversion rate of the online pay upfront company was 53% of instructions to sold subject to contract, if you then discount the 53% by 30% the usual industry fall off for cancelled sales you get to an exchange rate of around 37%. WHICH states that … ‘Major online estate agent Emoov, which also owns Tepilo, has gone into administration, potentially leaving thousands of home-sellers out of pocket by as much as £2,995. James Cowper Kreston, the firm appointed to act as administrators for Emoov, says the company currently has 5,000 properties listed for sale or sold subject to contract. Of this total, around 80% have paid upfront for the service and are at risk of losing money from the collapse.’ Also, WHICH states, ‘Exclusive data provided to us by TwentyCi shows that over the past 365 days, Emoov had approximately 8,000 new instructions. The firm accounted for approximately 0.5% of the estate agency market in 2018. Around 53% of new instructions received by Emoov typically went on to be ‘sold subject to contract’ and the average price of a property listing was £375,000. Tepilo’s figures are rolled into this data as its activity is merged with Emoov. Now for a very long time I have been saying that online pay upfront agents should be telling potential clients the true conversion rate of their service, and I wrote a recent article using data from Rightmove on – Tuesday November 13 – (prior to the collapse of Emoov and Tepilo). It is roughly gives a market snapshot of the then six major online brands (two under the ownership of Emoov). These were the figures from Rightmove. Doorsteps – 2,054 properties listed, 1,321 for sale, 733 under offer not exchanged, 28% conversion of listed to sold subject to contract.(Minus 30% cancellation rate gives exchange rate.) Yopa – 5,501 properties listed, 3,539 for sale, 1,962 under offer not exchanged, 35% conversion rate. Purplebricks – 37,531 properties listed, 21,142 for sale, 16,389 under offer, 43% conversion rate. Emoov – 2,504 properties listed, 1,696 for sale, 808 under offer, 32% conversion rate. Tepilo (owned by Emoov) – 1,740 properties listed, 1,162 for sale, 587 under offer, 33% conversion rate. HouseSimple – 1,140 properties listed, 763 for sale, 341 under offer, 30% conversion rate. You will notice that Emoov and Tepilo, had a conversion rate around 32%, which if you take the 53% figure being instructions converted to sold subject to contract as in the twentyci report, and then say the normal fall through rate for the property industry of 30% between sold subject to contract and exchanged was slightly higher for these two brands, say a 35% fall through rate you get to the 32% exchange rate, reflected in the Rightmove figures which would mean 68% of vendors mostly paid upfront for nothing. Also the auction/estate agent who 'bought' the Emoov/tepilo listings has said that many vendors actually paid nearly £1,500 upfront, rather than less than a £1,000 as was the low headline figure being offered by the onliners. The added upfront fees were for viewings and other services.

From: Andrew Stanton Estate Agency Insights Strategies 18 December 2018 10:28 AM

I think that is a brilliant idea … surely there must be plenty?

From: Andrew Stanton Estate Agency Insights Strategies 14 December 2018 18:52 PM

The Purple Bricks data is on their website, scroll down to investor on the bottom of the front page and find the twentyci report it shows their conversion rate. It talks about 81% conversion but then you look at the graphs a few pages on and you see that exchanges are not 81% or anywhere near. Hope that helps.

From: Andrew Stanton Estate Agency Insights Strategies 14 December 2018 18:51 PM

I think Purple Bricks and other pay upfront online agencies are going to come under increasing scrutiny as many vendors appear to be paying upfront and receiving nothing in return, and the figures appear to be very large. If you look very closely at this independent analysis commissioned by Purple Bricks by the data experts twentyci which cover the financial year 2017 to 2018, available online on the Purple Bricks website under investors on the title page, there seems to be some contradictory claims. In the twentyci report, and I quote 'Purple Bricks were looking for a reliable, respected and independent data source to establish answers to a set of questions about their performance in the financial year 17/18′ And Purple Bricks are … ‘No1 at selling houses: 81% of listings sold within 12 months’ Then there is a helpful graph in the same report which shows an annual picture of Purple Bricks results, it shows 64,000 new instructions, 48,000 properties sold subject to contract and it shows 38,000 properties exchanged. Now the ratio of exchanges to new instructions 64,000 to exchanges 38,000 is 59%, so Purple Bricks are not selling 81% of the instructions. But the worrying thing is, if the company gets 59% of vendors exchanged, it fails to get 41% sold or exchanged but still charges them on average £1,100 as an upfront non refundable fee, which is 41% of 64,000 vendors at £1,100 or 28.86M of fee for nothing. Readers of this are going to say the figures are wrong and skewed etc, but twentyci also did a similar report on Emoov and Tepilo, post the recent failure of these two online companies. And the WHICH organization recently had sight of this twentyci report and said that the conversion rate of the online pay upfront company was 53% of instructions to sold subject to contract, if you then discount the 53% by 30% the usual industry fall off for cancelled sales you get to an exchange rate of around 37%. This is available on the WHICH site online. In this piece by WHICH, it is stated that the ‘Major online estate agent Emoov, which also owns Tepilo, has gone into administration, potentially leaving thousands of home-sellers out of pocket by as much as £2,995. James Cowper Kreston, the firm appointed to act as administrators for Emoov, says the company currently has 5,000 properties listed for sale or sold subject to contract. Of this total, around 80% have paid upfront for the service and are at risk of losing money from the collapse.’ Also, WHICH states, ‘Exclusive data provided to us by TwentyCi shows that over the past 365 days, Emoov had approximately 8,000 new instructions. The firm accounted for approximately 0.5% of the estate agency market in 2018. Around 53% of new instructions received by Emoov typically went on to be ‘sold subject to contract’ and the average price of a property listing was £375,000. Tepilo’s figures are rolled into this data as its activity is merged with Emoov. Now for a very long time I have been saying that online pay upfront agents should be telling potential clients the true conversion rate of their service, and I wrote a recent article using data from Rightmove on – Tuesday November 13 – (prior to the collapse of Emoov and Tepilo). As it roughly gives a market snapshot of the then six major online brands (two under the ownership of Emoov). These were the figures from Rightmove. Doorsteps – 2,054 properties listed, 1,321 for sale, 733 under offer not exchanged, 28% conversion of listed to sold subject to contract. Yopa – 5,501 properties listed, 3,539 for sale, 1,962 under offer not exchanged, 35% conversion rate. Purplebricks – 37,531 properties listed, 21,142 for sale, 16,389 under offer, 43% conversion rate. Emoov – 2,504 properties listed, 1,696 for sale, 808 under offer, 32% conversion rate. Tepilo (owned by Emoov) – 1,740 properties listed, 1,162 for sale, 587 under offer, 33% conversion rate. HouseSimple – 1,140 properties listed, 763 for sale, 341 under offer, 30% conversion rate. You will notice that Emoov and Tepilo, had a conversion rate around 32%, which if you take the 53% figure being instructions converted to sold subject to contract as in the twentyci report, and then say the normal fall through rate for the property industry of 30% between sold subject to contract and exchanged was slightly higher for these two brands, say a 35% fall through rate you get to the 32% exchange rate, reflected in the Rightmove figures which would mean 68% of Emoov/Tepilo vendors mostly paid upfront for nothing.

From: Andrew Stanton Estate Agency Insights Strategies 14 December 2018 18:46 PM

For a kick off the share price of of PB has fallen from 320p in Jan 2018 to 154p in recent days, so that speaks volumes about the value of the company. And Neil Woodford's fortunes with his other top companies he has invested in such as a major housebuilder Keir have seen the share price drop by over 25% in the last week. Also Axel Springer paid 125M for 37,722,221 PB shares at a cost of 125M, so £3.07p a share – now 8 months later they are getting £1.50p a share – they are going to be very upset, as that is only 63M. Also, at start of year when share price was £3.22p a share Michael Bruce’s shares were worth 33.218,147 x £3.22p = £106M – now same shares worth £49M so he is not poor on paper but the second he or Neil Woodford tries to sell the price will get hit further. Neil Woodford whose investors holds 88,446,245 shares had in Jan £265M – now worth £132M. If Woodford sells more than 0.75% of a share this triggers an automatic red flag at the Alternative Investment market AIM, so he is unlikely to do this. In terms of inward funding, there was an initial investment of £7M, then through share raising they raised 25M and then another 75M when they decided upon the idea of going into other markets in the world. On top of this they have had positive cash flow (pay upfront model) in 2016, 2017 and 2018 of 18.6M, 46.7M and 93.7M last accounting year (ending in April 2018). Plus the 125M earlier this year from Axel Springer for 12.5% of the company, which after tax and other costs nets down to 100m THE 100m THEY ARE NOW TALKING ABOUT. So scores on the doors, 7M, 25M, 75M, 125M = 132M money invested in, plus 18.6M, 46.7M, 93.7M, positive cash upfront = 159M Grand total of money = 291M – and still they made 26M loss last financial year (off of 93.7M cash flow in) And they had a few months ago about 150M cash in the company, which sounds a lot, but a year ago they had 70M cash in the company, and if Axel Springer had not injected 125M, they might be sitting on 25M. 70M to 25M shows they are burning through capital very quickly, yes they have bought other online brands in other parts of the world – but they are generating zero profit, so on a spread sheet they are liabilities rather than assets. If the pay upfront/online model becomes a NO GO as trading standards think Emoov and Tepilo clients were stung, in the sense that according to WHICH they only converted 35% of instructions to completed sales, but had a fee upfront on most instructions anyway, then PB might have to go no sale no fee which would make their cash flow go from 100% positive to 50% in 18 weeks, ie half stock sells and it takes 18 weeks to get the completion money in - if you are lucky. Now it may not be smoke and mirrors but saying you have 100M to spend so that makes you untouchable is a dangerous gambit, especially if you have never made profit and your model is based upon cash upfront and in 2019 there will be less instructions for all so declining market, and less upfront fees. Remember also that other financial burden of the online model, you have to pay millions and millions on tv and other media because the second you stop your marketing spend your brand is forgotten and you do not have a single office in the high street. I think that costs and lowering revenues, and the reversals that PB are getting world wide may make them more vulnerable, and if that share price continues to drop - it was once in excess of 500p a share to the original 93p level then things are going to get interesting.

From: Andrew Stanton Estate Agency Insights Strategies 13 December 2018 09:39 AM

Hi 43% of the online estate agents sector has ceased trading since September 2018. As the latest headcount on online agents listing more than 1,000 properties in 2018 is now just four companies, instead of seven. So the magnificent 7 is now in just 15 weeks reduced to the fantastic four, Doorsteps, Yopa, Housesimple, Purple Bricks. If 163 agencies have failed, that is a tiny percentage of the 17,000 estate agents now trading in the country. Also, there have been hundreds of new start ups, mostly from home, many so sole traders. The real contraction has been in the online sector, as 43% of the online estate agents sector has ceased trading since September 2018. As the latest headcount of heaveyweight online agents listing more than 1,000 properties in 2018, is now just four companies, instead of seven. So the magnificent 7 is now in just 15 weeks reduced to the fantastic four, Doorsteps, Yopa, Housesimple, Purple Bricks. Hatched, Emoov and Tepilo are no more- and although there are new online creations popping up, their lack of critical mass - or new properties to sell means they have hundreds rather than thousands of clients on their books. So without fresh capital injections they are going to be financially strapped very soon.

From: Andrew Stanton Estate Agency Insights Strategies 11 December 2018 10:34 AM

With Pre-Tax (£ m) profit last year of minus 212.75M and a share price bobbling around 8.6p, I think a lot of deckchairs are going to be moving around the deck of HMS Titanic very soon, sad as I have fond memories of working at Countrywide in the mid 1980's. They should have stuck to high fees, high service, market dominance, and high paid staff which encouraged 'big sales hitters' to want to work for the brand, instead they have retained loss making offices for years, and played at being PB and offer loss making fee deals. They can change the top management but they should go and see the junior management in the branches - they are key, they are on the front line.

From: Andrew Stanton Estate Agency Insights Strategies 06 December 2018 09:36 AM

Estate agency is a cottage industry, and will continue to be, good estate agents are divesting themselves from offices, and making good profit, and also there are many established bricks and mortar agents in towns villages and cities that have a great team who make massive profits year on year. The biggest revolution though is the agent working from home - and Rob Bryer's approach is brilliant - it is just what a confident sales person needs, freedom to list and sell with support on a daily basis. But, the estate agent working from home is really no surprise as many industries, surveyors etc have been doing this for a long time. Giving a choice if I started again would I have an office and sit in it on a Saturday or a Sunday, no I would rather be networking whilst having a coffee at the local, in between appointments a much better life balance which is why staff retention is such a problem in the industry at present. And working from home should mean bespoke service should mean the highest level of service and highest level of fees as Simon says. And the term Hybrid? all agents are hybrid, changing daily, all are online, all have to conform to new red tape, all have to adapt to the new property tech and communication channels that the public chose to use. Rant over where is my coffee? And then meeting with Zara (my dog) and some blue sky thinking whilst we trail over the countryside. Yes agency is changing - but it is still a service industry, customer is king and you can not get around those trading overheads, so which ever model you are working, build in at least 28% gross profit or probably you are doing a lot of hours for a small return.

From: Andrew Stanton Estate Agency Insights Strategies 06 December 2018 09:05 AM

If there is enough pressure from the 2,000 plus vendors who have jointly lost over £200,000 of upfront fee, plus any upfront Tepilo lost fee, and Purple Bricks had to move to a no sale no fee model that would be game over. As PB get 100% of fee on every instruction at present and their average fee is now around £1,300. If they moved to no sale no fee they would only get paid on 50%, as they list 10, sell 7, cancel 30% and exchange on around 50%. And they would have the 16 week wait from point of sale to money in on completion that most agents suffer. The only reason PB keeps rolling on is that it has zero liabilities, LPE's who are 'sel employed' and lots of cash rolling in, the fact they never make profit seems to be a non factor, but in time investors will want a dividend on their shares. Given that market analysts including Motley fool who comment on the Purple Bricks 58% share price drop this year since Jan, things are not rosy at all. As Roland Heald from The Motley Fool put it today in his article ' The Purplebricks Group (LSE: PURP) share price has fallen by 58% so far this year. Should we ignore mounting losses? My colleague Graham Chester reviewed Purplebricks’ half-year trading update recently. I agree with his view that we don’t yet have enough information to know whether the firm will hit its growth targets this year. What I do know is that the near-term outlook for the firm seems to be worsening. One year ago, analysts expected the firm to report earnings of 2.3p per share on sales of £169m in 2018/19. Today, forecasts indicate a loss of 10.8p per share on sales of £173m. It’s a similar story in 2019/20. Forecasts for earnings of 10.4p per share have been replaced with an expected loss of 4.6p per share. One reason for these downgrades is that the group’s international expansion has been ramped up. In the short term, this means that profits from the UK business are being swallowed up by operations overseas. Is PURP a genuine disrupter? If the group’s global expansion is successful, this business could become a genuine disrupter, like Amazon. Personally, I don’t think this is likely. Purplebricks’ business model seems more like evolution than revolution to me. Its sales and property listings still depend on a small army of estate agents (630 in the UK). The only difference I can see is that they don’t have offices. Although the firm’s fixed-fee model is different to a traditional commission rate, I believe mainstream agents will be able to adapt their pricing to become more competitive if they need to. Purplebricks may well cause estate agents’ profit margins to fall. But I don’t think it’s a truly disruptive business. For this reason, I view the shares as expensive and risky.'

From: Andrew Stanton Estate Agency Insights Strategies 06 December 2018 08:42 AM

Countrywide’s share price is not the only concern, last year it made losses of over 220M, having made a marginal profit the year before of over 15M. It has raised 120M a few months ago by offering shares at an all time low, but this recapitalisation exercise will only sustain them for 8 months. I started with Countrywide in 1985, and so have fond memories, but the basic principle of the company then was: – high fees, high level of service and dominant market share, which attracted top flight well paid staff. We are now in 2019, well almost and Countrywide should have pruned back all offices that have never made profit, and of course not tried to re-invent itself as a low upfront model. They failed to do this over the last 3 years. The basic cost of selling a property and getting it exchanged is about £2,300, if you factor in marketing costs and sales progression. If you charge less than this your business will make a loss, obviously there are bolt on’s, financial services, solicitors introductions. But you can only charge a higher fee if your offices perform, and the public wants to use your brand, the recent woes of John Lewis illustrate that just because you have always done well historically, in 12 months that can all be wiped out. I wonder two things, has the present CFO ever been an estate agent? Has Himanshu Raja spent anytime in any of the 'back to basic branches' to see how despondent and beaten the sales teams are? I ask this question as not so long ago, most people on the Countrywide board including Aliso Platt had never done agency, and actually looked down on those who had.

From: Andrew Stanton Estate Agency Insights Strategies 05 December 2018 06:17 AM

Simon I agree, Back in the day it always was the case that about 12% of potential vendors were fee sensitive, as to which estate agent they would choose. So probably 1 out of 10 vendors will go the cheap route, especially as PB for instance have average sale price of around 300k and in large towns and cities their model may work. Though in the last 15 weeks, 47% of the big or Magnificent Seven online agents have closed, (listing more than 1,000 properties apiece) Hatched, Tepilo and Emoov. Leaving only the Fabulous four Doorsteps, a newbie, Housesimple, YOPA and Purplebricks. Trouble is without the TV and other media spend which is massive cost, the onliners do not really exist.

From: Andrew Stanton Estate Agency Insights Strategies 04 December 2018 09:39 AM

For clarity, in Tepilo's 2016 annual accounts they had a loss of 3.2M in their profit and loss column, and in 2017 they had a loss of 7.5M in their profit and loss column. In Emoov's 2016 annual accounts they had a 6.9M loss in their profit and loss column, and in 2017 they had a loss of 10M in their profit and loss column. So, why would a collective loss of 27.7M in 24 months mean that in 2018 a three way merger with Tepilo, Emoov and Urban make that collective business worth 100M. Especially as Urban was bought for 3M and only generates 40K a month? Probably time to get on Crowdcube - they love investing in 'new generation estate agency disruptor models'.

From: Andrew Stanton Estate Agency Insights Strategies 29 November 2018 06:43 AM

I am a little lost why the Tepilo Emoov Urban merger would have cost 100M? The best I can come up with is that think a newspaper speculated some months ago that a tie up of Tepilo and Emoov would create an agency 'valued at 100K', (but not sure who would put that value on it.) I do know at the time of the tie up of the the two Tepilo and Emoov from the accounts last filed for Tepilo, no profit had been made. Emoov appear not to have made any real profit if you take out crowdfunding and other funding, and Urban well no profit there either. So a tie up of three concerns who do not make profit, but by getting larger they will now start to have critical mass and turn things around? Well Purplebricks certainly have a lot of critical mass, and have a huge amount of throughput of capital, mainly as all clients have to pay and many upfront and those who do not pay in 10 months or less. But still after year four, it has a collective loss of 47M. Maybe 2019 will be their year, but, their losses this year are far larger than last year, and their turnover has grown by the biggest margin so far. So cash into the company hugely increased, with also an injection of 125M for a 12.5% stake of the company, but the largest losses so far? Maybe it is me, but should the figures not be going the other way? I will be told that Purplebricks are acquiring other businesses, and when the model matures, all will be ok, but the present share price, at around 178p, well down from the heady 500p plus a share, tells me that the city is not so convinced. Thoughts? So, a bit like Doorsteps which valued itself at nearly 10M when it started trading, and is now offering it's services for a £1, having never made a profit. Yes it has raised over 1.2M in private fundraising, thanks to crowdcube, but you soon burn through that if the true cost of sale is around 2.5K, and you are charging a fraction of that. For me there seem to be two models, online agents who charge low fees, (but the cost of sale is identical to the traditional agents with offices) who keep on getting capital injections to subsidise the sums they do not charge the client. And traditional agents who charge on average in the UK around 1% or 3.5K, so a nominal 1K of profit per sale which allows businesses to cover their costs and grow.

From: Andrew Stanton Estate Agency Insights Strategies 19 November 2018 17:55 PM

Hi John You are right … No online agent has made any money - they generate cash, but not profit, in last 4 years Purplebricks has announced collective loses of 47M. Despite selling 12.%% of itself for 125M this year. Their balance sheet though is awash with money. Unlike the final accounts of Tepilo which were a horror show, and that company has been trading many years so is a mature business. Now merged with E-moov it will be interesting to see what happens next. Then there is Yopa, which has a strong cashflow, but if you deducted the tens of millions that has been poured into it, like Housesimple, you would say that the future is not one dominated by online only agents. I think online agents will populate about 10% of the housing market, that is because about 10% of vendors are looking for a cheap fee, so there will always be a market for this type of agency. Regarding investors looking at figures, I do not think they ever do, for example Doorsteps, valued itself at nearly 10M before it ever traded a penny, and when it looked to sell less than a 5% share of itself on Crowdcube, it raised just under 400K in a few weeks, and then a year later it raised another 800K plus in a second round of crowdfunding. So over 1M of investment capital. But if you look at the annual accounts on companies house how much profit have they made and how much of the money they have been handed is still left? This means that the shareholders will not get a dividend so no return on their capital. Identical to Purplebricks - no dividend over the past 4 years. Hope that helps - Andrew

From: Andrew Stanton Estate Agency Insights Strategies 15 November 2018 16:11 PM

Hi Property Road Everything is a bit shoddy, but I do not feel that this data is misleading, as 95%of estate agents list on RM, any skew will be very small, as most agents leave their 'sold' stock on the site for as long as possible. On the conversion rate of sold to for sale, I suggest if you have access to figures for a traditional agent you look at: - number of properties listed in last 12 months from today, number of agreed sales in that period, number of properties actually exchanged in that period. The ratio will be 100 listed, 72 had agreed sales, 30% fell through giving just under 50 sales exchanging. So list 10, and sell 7 subject to contract, and exchange on roughly 5. So conversion rate 48%. Have a look and tell me what you find (not the actual figures) - but the conversion rate, then look at your own listings on rightmove do they mirror your own conversion rate of listed to exchanged in last 12-months? I think they will. And I think that is why the online conversions are a true reflection of what they actually sell, which given they get fees upfront regardless might not be fair to vendors who could be using a no sale no fee model. Thoughts? So I fully embrace that traditional agents only sell about 50% of their stock, but they only charge the owners who get to complete. Thank you for taking the time to make a comment and read the piece. Andrew EAIS

From: Andrew Stanton Estate Agency Insights Strategies 15 November 2018 15:42 PM

Hi Ben Data is data, and I do not feel that this data is misleading. Yes some agents do delist properties on exchange or on completion and many wait for Rightmove to take them off the site. But with such a huge amount of data - 95% of estate agents list on RM, any skew will be very small, as most agents leave their 'sold' stock on the site for as long as possible. On the conversion rate of sold to for sale, I suggest if you have access to figures for a traditional agent you look at: - number of properties listed in last 12 months from today, number of agreed sales in that period, number of properties actually exchanged in that period. The ratio will be 100 listed, 72 had agreed sales, 30% fell through giving just under 50 sales exchanging. So list 10, sell stc 7, exchange on roughly 5. So conversion rate 48%. Have a look and tell me what you find (not the actual figures - but the conversion rate, then look at your own listings on rightmove do they mirror your own conversion rate of listed to exchanged in last 12-months? I think they will. And I think that is why the online conversions are a true reflection of what they actually sell, which given they get fees upfront regardless might not be fair to vendors who could be using a no sale no fee model. Thoughts? Thank you for taking the time to make a comment and read the piece. Andrew Stanton I have Now I think that

From: Andrew Stanton Estate Agency Insights Strategies 15 November 2018 15:36 PM

Hi Tom The 100,000 is the amount of properties listed by online agents in a year, not sold. So as Rightmove is snapshot of typically 6 months, if you add up the big six (those who list more than 1,000 a year) and double it to give a 12 month total, then add all the minor players who are online agents - that gets you to 100,000 instructions collectively. Hope that helps and thank you for reading the piece. Kind Regards Andrew

From: Andrew Stanton Estate Agency Insights Strategies 15 November 2018 15:21 PM

I admire Sajid for the iniative, like many politicians he will put together views and proposals and nothing will change. Moreover, politicians always look for new models, basing them on some other country - usually America or Norway, which is not useful. Quickest sale to completion, I dealt with was in 2002, only taking three-days. Cash buyer, buying freehold detached residence. This taught me if two motivated solicitors and two sets of clients are willing, then speed of transaction is not an issue. I know there was a hand search, rather than the normal local search, but in 2017, even that could be speeded up. Perhaps a 10% deposit on acceptance of offer, non refundable from the buyer - with vendor paying 10% to buyers solicitor, also non refundable should they not sell, would definitely focus both parties, with a twist that the agent having introduced a ready, able and willing buyer gets their full fee out of the deposit, as does the solicitor. depending . Thoughts.

From: Andrew Stanton Estate Agency Insights Strategies 22 October 2017 13:45 PM

I think that all online agents use Rightmove, that seems to be a main driver for vendors to use their services. Certainly all of those listed in my article are on Rightmove. And I can see no logic for a client to have their property hidden from the mighty eye of Rightmove - as with no premises and really no sales people promoting the property - it is only Rightmove and Zoopla interaction that generates sales. For sure if there was a marketing model where property was listed and did not appear on the web - that would be a return to the 1990's - maybe I can get some crowd funding for that business model.

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