Selling Houses – Advantages of the High Street Approach


So this article was supposed to be about our new office on Bellevue Rd.

“New office!?!” We hear you cry.

“Are you mad?!? You’re expanding as the dark storm clouds of internet agency inexorably roll in from the East? Haven’t you seen the tv ads, they’re taking over the (property) world?” (Well, 3-5% of the property world – current estimates of UK market share)

A big hedge fund published a report last week that was widely quoted in the industry and national media saying that the future of the high street agent looked perilous in the light of the growing emergence of online agency. They were saying that it was the natural destination of all consumer market places…….you name it, from books to clothes to cars, so much of our shopping is now done on the web.

But are they right, could this happen for the house market too? Sarah Beeney, Stelios et al certainly seem to think so…

However we believe that there is a significant and fundamental flaw in this business model; it’s too cheap.

The service they offer to the consumer is charged at too low a cost.

The web agents can charge so little because they spend so little on their staff.

And I’m afraid that I believe that this is bad news for the consumer.

Let us elucidate with an example.

Last year we went to value a house on one of the best roads in the area. We put a value on it of £2.25m, as did most of our competitors.

However, the owner, an older lady (let’s call her Gladys) was downsizing to pass cash over to her children. She wanted to save a few quid, and so instructed a certain “colourful” online agent.

Gladys was of the opinion that it didn’t really matter who was selling it, because as long as it was on one of the major portals (in this case Rightmove) and correctly priced it would sell well and quickly.

We have to say that we thought she had a point.

Because, although the market was quite flat generally, this house was a total box-ticker – a big, quality, family house; un-extended and unmodernised, on the South side of one of the best roads in the area. (One of those houses that a family will move into from a standard terraced house between the commons, and stay in until the kids go to Uni).

And it was priced correctly too.

So we watched the house on the internet.

But it sat. And it sat, and it sat.

I’d kept in touch with Gladys, and when I returned to see her at the end of the contract, she was “purple” with frustration. She’d had to watch a couple of similar houses come and go from the market whilst hers had languished, and she told me that in the weeks since she’d been listed online, she’d had a “handful” of viewings and no meaningful offers.

It’s not like they had overpriced it and scared off the buyers. It just seemed that they didn’t have the buyers to begin with, and couldn’t suck in any more despite being on the UK’s biggest property portal.

Long story short; we were instructed and in 12 days had it under offer to a cash buyer at asking price. We exchanged and completed to Gladys’ timeframe allowing her to buy a smaller house down South near her kids AND bung them each a wodge of cash – all-round happy punters.

So how come the big difference.

Because, even with a sensibly priced, quality product being sold in a good market place, you still have to actually SELL it.

And how do you do that?

With high quality, experienced staff.

And how do you get them?

By spending a lot of money.

They have to find the right buyer, and explain to them why it is precisely right for them, and exactly why they should buy it. And then get the best price out of them.

You see, a book on Amazon is worth £9.99; and that’s really that. Done deal. And a five bedroom house on Thurleigh Road is worth £2.25m.

“Really”, asks the buyer “who says so?”

“I do” Says your member of staff.

They have to negotiate with the buyer, using all the experience, skill and local knowledge that they’ve picked up over the years. And these guys they’re negotiating with are not numpties. They are generally highly paid, well-informed city people (who, incidentally, are often professional negotiators themselves).

Aye, and there’s the rub of it……

If you don’t spend on your staff, you won’t do very well for your clients.

Your home is normally your most financially and emotionally valuable possession. Do you really want to entrust its sale to an outfit with an East Midlands call centre, a website and a few boots on the ground? But beware, they may well not sell it for the best price, or even at all?

So in conclusion yes, internet agency will grow – but not by much I reckon.