Back in 2015, newspapers covered the story of easyProperty’s launch with headlines claiming the company would ‘wipe out’ high street estate agents.
Now, with easyProperty’s merger with the Guild of Property Professionals and Fine & Country, it seems their investors have finally decided to pull the plug on founder Rob Ellice’s failed strategy.
I thought it an opportune moment to look at the wider trend of poorly managed estate agents panicking their way into a low, fixed fee offering – one that the public still hasn’t embraced beyond the 5% of sales that online agency in the UK has struggled to breach.
Can you imagine how the Guild’s members feel on being told that their membership organisation will help them earn less?
Let me repeat: help them earn less.
Estate agency is a crowded market, with often little to differentiate one agency from another. So the notion that going low fee will grow volume is beyond delusional.
However, a number of software providers are cropping up to offer agents the ability to earn less.
Proptoria is one such provider whose stated place in the world is as “Guardians of the High Street”: https://www.linkedin.com/company-beta/16275364/
Another, cleverly named Hystreet, advertises on Google that its white labelled service allows you to “fight back against online agents”:
We’ve already written about Countrywide’s efforts to ‘go hybrid’ – going as far as raising capital from the public markets with that specific intention.
The notion that agents are losing instructions to online or hybrid agents is interesting.
But is offering a clone of Purplebricks really going to help you beat Purplebricks? Common sense suggests not.
So what can agents do to compete when they think they are losing instructions to online or hybrid agents?
- Advertise – like RedDoor Homes. Purplebricks’s adverts are funny and memorable. RedDoor’s are even funnier: https://vimeo.com/219101577 and if you liked that, there’s more on their twitter: https://twitter.com/reddoor_homes
- Charge more – like Red Bull. Selling for double the price of Coca Cola in a can half the size makes people feel like they must be buying something better. Nested.com are persuading people to not only pay 2% commission, but 20% of anything Nested achieve over the asking price. They earn 50 to 100 times more per vendor than the typical online fixed fee offering. And several times what their typical high street competitor earns. Because their customers feel they are getting a better service.
- Offer a better service – use simple technology like Property Technology (I’m an investor) and Viewber to give people the sense that you’re a modern agency. Just like Fixflo, these offerings work alongside your existing software so there’s no need for painful switching.
Why does a modern approach to viewings matter?
I called to view a property yesterday. The agent on the phone actually said they couldn’t accommodate a viewing because they didn’t have enough staff. I’m still waiting for a call back from them to confirm my viewing for NEXT Saturday.
If I were ever selling my home, I wouldn’t use this agency. Ever.
Hystreet’s website says using them helps you “never lose to an online agent again”. I’d counter and say by using services like Proptoria or Hystreet, you’ll never earn a high street fee ever again. Let alone a fee as high as Nested’s.
For Guild members in their brave new world, the ‘easy’ brand carries the weight of expectation. It represents no frills and low cost. Everything you tell a prospective customer that you’re not.
Hopefully the new easyProperty management will take a different strategy, one that creates value by advertising, charging more or helping their membership offer a better service.