Carpe diem, seize the day – whatever you call it, it’s something all of us in the property industry should be looking to do, at all times.
If you want to come away from the ban on tenant fees with higher commissions, lower costs and more business, please read on. This is where we turn a crisis into an opportunity.
As I write this virtual blog using a touch screen virtual keyboard on my virtual notebook, I can’t help reflecting how everything is virtually the same as it always was, just a lot more competitive. As a result of the increase in competition, we have had to get better at what we do, ensuring that we are still providing a market leading service to our clients.
What we have also had to do, though, is accept that in order to survive, grow and prosper we need to become more efficient and effective at delivering our core proposals, as well as adding additional income streams where we can.
This is similar, in many ways, to the world of lettings. We all know lettings can be hard work, but the upside is steady income. Some letting agents will now be worrying about this income being affected by the impending ban on charging fees to tenants.
Undoubtedly, this is one of the most important issues in the industry as we speak – with anyone who is anyone talking about it and its possible implications. The property reaction to the Autumn Statement was almost entirely based around this one topic, with some taking the glass half-empty approach and others taking a glass half-full one. What everyone agrees upon, however, is the pressing need to replace the lost revenue that this move will unquestionably cause.
For some, this will come in the form of increased rents, with tenants bearing the brunt of the costs as agency fees are shifted from the tenant to the landlord and back to the tenant (multiplied by five). This might happen, it might not, but if it does it is unlikely to be immediate. So, if you’re a letting agent who relies on 10% of your revenue coming from tenants and that revenue disappears overnight, how do you cope in the meantime?
For larger, profit-heavy letting agents, this hit will probably be absorbed. For others, it could prove the final straw.
If you are one of these agents facing an existential threat, what can you do? Well, the first thing is to make efficiencies – in other words, cutting costs.
To do this, you might consider cutting down on print advertising. Many local free papers have gone out of circulation or are desperately clinging on for dear life, so you may have to ask yourself whether it’s necessary to advertise here. Does print advertising have as much relevance in a switched-on, online, heavily digital world? It may be time to move on. To say “thanks, it was great while it lasted”, but to appreciate the way the world is changing and adapt accordingly.
Assuming you’ve made certain efficiencies and cost-cutting measures, what next? Well, one other way of replacing lost income without increasing commissions is to do more deals. This means taking on more property and letting and selling a higher proportion than you do at present.
That’s what I want to help agents to do. We’re all in this together, after all, and we’re eager to create a network of agents – working in tandem – to help the industry as a whole. We are behind agents, championing their cause, looking to aid them.
Thinking along these lines, we’ve tried to come up with solutions to help the industry. One of the biggest problems that we’ve come across from speaking to thousands of agents is the struggle to gain more instructions.
We know that attracting – and then converting – traffic from your own website is the modern-day equivalent of alchemy.
Before entering into the world of marketing and PropTech, I earnt my living generating leads in the mortgage market, fintech if you will. Using this knowledge and experience, I decided a few years ago to come up with something to help the very agents who read our publications, to turn my hand to a bit of estate agent lead alchemy (if that doesn’t sound too pretentious!)
What we were eager to tap into was people’s innate need for instant gratification. As a result, we created an instant online valuation tool for sales and lettings that agents could use on their own websites.
The results, if I can do away with modesty for a minute, have been stunning. From a standing start around 15 months ago, we now have over 2,509 offices using our ValPal tool - currently generating over 1,000 valuation leads a day for our members, already more than Zoopla and OTM.
Talking of instant gratification, did you know that most people do an online valuation of their property at around midday? According to our stats, the hours of 12–1pm every day in November were the busiest, generating 1,967 seller and landlord leads for our agents.
So, if you haven't got ValPal on your website, what are you waiting for? We can have you up and running immediately and we’re currently offering some great deals to anyone signing up before Christmas. You can have those leads coming in from as little as £5 a month with no setup fees, less than the cost of a packet of mince pies (and a lot sweeter into the bargain).
Pitch Alert 2!
On a serious note, ValPal is only the start of what we are trying to achieve. We want to provide agents with buyer and tenant leads generated at low cost from your own website and databases.
This new project - which we’re calling Project X - will be rolled out in the new year to ValPal subscribers, forming the basis of a next generation network of agents who we will equip to not just survive the loss of tenant fees but to actually prosper from the changes that are coming. We are working on a series of initiatives in our secret lab, to help all our agents win.
In the past, we have had to evolve, change, adapt and look at ways of turning a crisis into an opportunity. The result has led us to embark on an exciting journey to a big destination. We want you with us and we want to be with you every step of the way!
*Nat Daniels is the Chief Executive Officer of Angels Media, publishers of Estate Agent Today and Letting Agent Today