It isn't rocket science
I cannot believe what I am hearing.
We recently had to look for a property for a poorly relative. Where he was situated there was no family support and in the village there were no buses, no shops and he didn’t drive.
So we were trying to move him nearly a hundred miles to be nearer most of our family and provide some sort of support network.
Have you tried to buy property recently?
It is so difficult.
It’s as if they actually don’t want to sell, or at least offer too many buyers the opportunity to buy.
This may not be true of other areas but in the South of England (Gosport/Fareham), they put so much friction in the process, that you just end up getting frustrated and walking away; or at least I would if I could.
I have always been of the mind that to succeed and grow, I will do whatever it takes; whenever it needs it. That’s why when on holiday, I typically work for 30-60 mins each day.
According to Zoopla (www.zoopla.co.uk on 25th February 2022) Estate agents in the UK usually charge a commission of 1% to 3.5% for a successful sale. Accoring to The Advisory (https://www.theadvisory.co.uk) in their 2022 Update, the average works out to 1.18%+VAT (1.42% inc.VAT) = The current average estate agency fee for a sole agency agreement on a no sale no fee basis (see research below).
The bad news for estate agencies, is that the average fee has fallen from 1.8% in 2011, to 1.5% in 2014, 1.3% in s015 to 1.18% in 2018 and around 1.14% in 2022. Internet based agents are charging as low as 0.36% with hybrid agents (Hybrid estate agents attempt to offer the benefits of an internet-based business with local knowledge, a single point of contact and sometimes, fixed fees) around 0.95%. The average agent is losing over £1,700 based on a median England & Wales house value of £259,000 in August 2022.
Interestingly enough, the Estate Agents industry in the UK has low market share concentration and there are no companies with more than 5% market share.
And they are moaning about low income!
So, taking all this into account, how much do these guys get paid? According to Indeed (https://uk.indeed.com) 30th November 2021, the average real estate agent salary in the United Kingdom is £40,000 per year or £20.51 per hour. The national average salary for an estate agent is £24,685 per year while most experienced workers make up to £75,000 per year.
Anyway, back to our story.
We found a great and helpful Estate Agent to sell the property in the M4 Corridor and they offered fees of 1% and absorbed the Energy Performance Certificates (EPC) cost, a value of around £80-£100 saved. That was without me pushing and negotiating further.
We researched the local Estate Agents and selected five who were well known. I approached them with the criteria and waited for the deluge of properties to hit my inbox or doormat. After ten days, I contacted the first two (I staggered the invites) and asked if they were going to send us any properties. Neither had sent even confirmation of our requirements!
Eventually we sourced some likely prospects and on Saturday lunchtime called to arrange a viewing, preferably over the weekend, as both my wife and I work. Although I can be flexible, the NHS are less accommodating. The response? We can’t do viewings today and we don’t work Sundays. Don’t work Sundays?
They suggested a weekday and my wife said, “OK, I get home around 5.15pm and we could view around 6.00pm onwards”. The reply from both agencies was similar with “Our last viewing is 5.30/6.00.” Really? How do these guys expect to sell anything? With a few tweaks and a planned marketing approach, they could have the pick of the crop and clients queuing up outside their offices, but the traditional estate agent is just that, traditional and broke.
Final Thoughts
Estate agents are decreasing in number due to the issues and challenges that they are facing today. They are earning reduced commissions due to the perceived value they are (not) providing, whereas online agencies can offer only a limited range of benefits, increasing their costs to around 0.6% sale price with assisted viewings. What is the solution? The pandemic has pushed the Estate Agents into the 21st Century, but, the technology changes and a new marketing system needs to encapsulate their professional standing as well as greater value and leveraged in a Sales Marketing Success (SMS) package. We can do that for firms.