Is estate agency broken?

That’s what we’re told. We’re also told we must ‘adapt or die’. Helpful rhetoric for all of us doing our best every day. Anyway, flippancy aside, I decided to ask myself why this utter waffle is being shot across our bows as regularly as clockwork.

The digital revolution is the main culprit apparently. Digital disruption has changed the business ‘existentially’. Our industry’s challenges have been likened to the struggles camera and print firm Kodak had in the late nineties/early noughties where they forgot to innovate, hung onto to film too long, and ultimately failed before finding a niche.

The new boys, the onlines, keep telling traditional agents that their model is broken, that margins are going to continue to be squeezed and that they’re THE answer in a digital future.

They also say that the public, i.e. sellers, have ‘voted with their feet’, the inference being that the majority of sellers are now turning to these types of businesses to help them sell, so, if you’re a traditional high street agent, you’d better either sign up with us, or risk going under.

Why then are the traditional agents in such trouble? Well, we’ve been in it for ourselves for too long.

Oh, and we couldn’t give a hoot about our customers and clients. We break promises, tell untruths and provide a poor service while overcharging every client. It’s amazing any of us are able to keep the lights and heating on really on the back of that kind of business practice!

I’m not naive, and I completely understand why these newer model agencies peddle this nonsense. They have to, to create their own niche, to establish their own point of difference. To them, it’s about volume. The success of their model is based on a higher turnover of sales. But here’s the irony. If their business model is based on generating the highest turnover of sales as possible and they’re successful at doing so because the fees charged are so low, how can they then provide better service and customer care, maintain an attention to detail and ensure they don’t let their customers down by over promising and under delivering?

It’s false economy disguised as a sellers only real viable alternative. Discredit the established agencies by using very real, generic, cross-industry wide challenges (digitisation), add into the mix a load of waffle and generalisation about service, customer care etc and then stack ’em high and sell ’em cheap by the bucket load. Because if they don’t, they don’t make any money – themselves risking going under. So what can the sellers do?

Choose the ‘pay upfront model’, and in our local market, ultimately end up taking less in a shorter space of time. But that’s OK isn’t it?You’ve saved money on your fee while your pals have paid 1% or more and ‘struggled’ to sell in three to four months.

On the island, you can’t list with an online agent like Purple Bricks or Tepilo. Firstly, they’re not registered to practise here – the Isle of Man Estate Agents Act sets out the rules. Also, few buyers use the websites to search for property here because there is no presence.

Most people I speak to want the highest sale price accompanied by superb marketing material, high resolution images and an agent that pays attention to them – all for a reasonable fee. I couldn’t agree more. So, given where we live and how estate agency works here, we’re all left with the traditional model which sells your property for as high a price as the market will dictate, in a reasonable period of time, all for a sensible fee. Doesn’t sound broken to me…

If you’d like to find out more about how Black Grace Cowley can help you move, please give us a call on 645555 or email us: hello@blackgracecowley.com – we’d love to hear from you.

Tim Groves
Black Grace Cowley
(01624) 645552

 


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