Sam's Word 9 - OTM and the Estate Agents Markets

Sam's Word

I feel compelled to write in direct response to an article published by Anna White of The Telegraph 
yesterday. A number of points riled me, but compelled because having read her articles previously, it would appear she is anti-Estate Agency in her writing. I'm not sure if this was to fire up house sellers given the headline in an attempt to batter estate agents, but I stopped short of writing to her directly and decided instead to pen this.

We got involved with Agents Mutual at the very outset 18 months ago in a meeting at Savills head office in the West End of London. Undoubtedly the time had arrived to restrict the two mainline portals from their charging policy, to protect us 'a consumer' in this context from exorbitant pricing. I am pleased Ian Springett, Savills, Douglas Gordon et al conjured up such a plan and proud to be a part of it. Zoopla to be fair were not primarily at fault. Rightmove's charges  however were increased annually and unfairly in my opinion. After the first meeting we held our own discussions and decided to join up with Agents Mutual. We also did some research choosing not to delay and banish one of the portals. Our research found we got more traffic and better quality leads from Zoopla, so we allowed the contract to expire. This has made no difference to our customers in achieving the best possible price, in the quickest possible time frame. We have been running with Rightmove as main portal now for about 12 months. Only one customer over this period has demanded we use Zoopla as well. A one bed flat where the value was dictated to us. Fortunately we have a good relationship with our competitiors locally and another independent who is not involved with OTM, but cannot afford to list with Rightmove listed the property for us on Zoopla. We have not received any leads from Zoopla against four from RM. So to suggest consumers property marketing 'will be halved' is totally incorrect. If you consider also consumers will look at both Rightmove and Zoopla and most of the time the listing is just duplicated. In fact buyers will go to any lengths to find the property that suits them. It therefore is not 'a rotten deal for consumers. In response to Angela Kerr's comments of the Homeowners Alliance it is not 'about protecting estate agents' market share and profits.' As high street Estate Agents we are already subject to ridiculous costs. How about the portals that are allowed to charge in effect what they like unfettered? It's about gaining control, which is what consumers want isn't it? No one body should be allowed to gain a monopoly and in this case a duopoly had to be stopped.

The reporter writes that the largest property and lettings agency Countrywide, including Connells and LSL has rejected OTM. Actually these large groups have links with RM and therefore are not allowed to join as there will be a conflict of interests. Actually from my experience and in my opinion these are the agencies who have a drive to fleece consumers unfairly. Fees at 1.25%+. Employing aggressive tactics to win instructions and to win mortgage business. The latter which is vital for their model. These offices in the area I have worked for 17 years have a high staff churn rate and they're only interested one thing. Profits for their share holders. This leads me to the consumer and online agencies. A good few years back we positioned ourselves as a cross between the traditional high street estate agent and an online estate agency. Recognising the charges consumers faced by Estate Agents as unfair, particularly at the high end, we introduced a modern pricing strategy, which was very well received by the consumer. Only now however are we beginning to establish ourselves amongst the sea of traditional High Street estate agents, who have enjoyed years of high fees from the days of print advertising. The introduction of the internet 15 years ago was the embryonic change to our industry, but for some reason it's taken a while to fully evolve.

Simon Hughes of Conran Estate Agents has done a seemingly admirable thing in allowing his advertising space of a page in a highly regarded local magazine to be used for OTM. Albeit at a small cost. Usually agents who compete with each other, will come together planting their brand logos on a back drop of OTM branding demonstrating their support for OTM. Simon's passionate support of OTM comes from his fear of online estate agencies, who have been barred from joining OTM. Whether we like it or not online agencies are here to stay. I do not believe barring them is of any benefit at all to OTM. In fact it could be detrimental. I do believe, from experience they are not able to deliver the same high quality services a High Street Estate Agency can. We've competed with these online agents before. It really is down to how you can demonstrate how you will achieve the best possible price for a consumer and most importantly what the consumer wants. If they choose to use an online agent purely based on low cost and suffer the low quality service then that's fine. Some consumers are robust characters and able to deal with the house selling process. I would say that most aren't and want the guarantee of a start to finish service, with a person they can connect with and are comfortable paying a fair price for that service. Property like most industries is about people and there is enough of the pie to go around for everyone.

Ultimately our industry is changing and it has been a long time coming. I've always said it will sort out the men from the boys and put us on a level playing field. The consumer remains protected and will get a better deal as a result. A property being listed on one portal a couple of days before going on a main portal is unlikely to be detrimental to the consumer. OTM has to employ some sort of strategy to help their portal catch up to the years Z and RM have got away with fleecing agents. If you cannot adjust to the revolution then this industry is not for you.

Now that's off my chest I wish you all a good day and best wishes for 2015. It's going to be interesting!

Sam Samuel, MNAEA CRLM,  January 2015


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