Debate House Prices


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The end of High Street Estate Agents?

Quite rightly Estate Agents have appalling reputations and I was wondering what the future holds for one of the most despised industries in the world.


Does anyone agree with me that the high street agency will be a thing of the past within 10 years? and will they be missed by anyone? Think we can all agree that Rightmove/Zoopla are the most powerful players in the property industry in 2016 so what of the traditional estate agent?


Where I live in Hertfordshire the prices have grown considerably however what we are seeing is real slow down in the volume of sales. All of the EA's who trade in the area (around 8) will all quite easily be negotiated down to a 1% fee. Last month only 30 sales went through for the whole of a very large town. Divi this up between the 8 EA's and that's only around 4 sales each. The average price in the area is around £450,000 so that only an income of £13,500 a month. After paying your talentless sales staff, business rates etc. I just cant see how they are making any money on the sales side at a time where house prices are at an all time high.


For me EA's add very little value and the likes of Emoov and Purple Bricks are the future. In fact if Rightmove or Zoopla allowed individuals to use their site to market their property I don't know many people who wouldn't choose to do this themselves and save a few thousand pounds.


I cant see any long term future for the industry. Times have changes and people are much more clued up than what they were.


Maybe I am missing something, but just cannot see what value they add in 2016.
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Comments

  • Generali
    Generali Posts: 36,411 Forumite
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    edited 29 January 2016 at 12:42PM
    HENRY78 wrote: »
    Quite rightly Estate Agents have appalling reputations and I was wondering what the future holds for one of the most despised industries in the world.


    Does anyone agree with me that the high street agency will be a thing of the past within 10 years? and will they be missed by anyone? Think we can all agree that Rightmove/Zoopla are the most powerful players in the property industry in 2016 so what of the traditional estate agent?


    Where I live in Hertfordshire the prices have grown considerably however what we are seeing is real slow down in the volume of sales. All of the EA's who trade in the area (around 8) will all quite easily be negotiated down to a 1% fee. Last month only 30 sales went through for the whole of a very large town. Divi this up between the 8 EA's and that's only around 4 sales each. The average price in the area is around £450,000 so that only an income of £13,500 a month. After paying your talentless sales staff, business rates etc. I just cant see how they are making any money on the sales side at a time where house prices are at an all time high.


    For me EA's add very little value and the likes of Emoov and Purple Bricks are the future. In fact if Rightmove or Zoopla allowed individuals to use their site to market their property I don't know many people who wouldn't choose to do this themselves and save a few thousand pounds.


    I cant see any long term future for the industry. Times have changes and people are much more clued up than what they were.


    Maybe I am missing something, but just cannot see what value they add in 2016.

    I completely agree and FWIW I don't really understand why they've lasted this long.

    £10,000 to sell a 2 bed flat in 'ackney? You're 'avin' a laugh, innit.
  • michaels
    michaels Posts: 29,133 Forumite
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    edited 29 January 2016 at 12:49PM
    They do a bit of legwork putting together and holding together chains but I would have thought purple bricks style model way you have a 'consultant' who makes say 1k makes more sense than paying 7 or 8 k to a local agent.

    There is value in a third party in suggesting how to best present a property and some people are just not naturally good at sales especially of their own house (I had to do a viewing last time I sold and probably didn't help by expressing surprise to the local teacher who was viewing that a teacher would look at what was clearly a commuter property and thus more than a teacher would look to pay...)
    I think....
  • ukcarper
    ukcarper Posts: 17,337 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    There were a few property shops which charged a upfront fee which is how I believe purple bricks work, they didn't catch on people seemed to prefer not to pay upfront.

    I suppose a lot depends where you are in London estate agents fees will be considerably more than the upfront fees but in the cheaper parts of country the difference wil not be so great. Perhaps estate agents will alter their terms.
  • lush_walrus
    lush_walrus Posts: 1,975 Forumite
    Personally I think EAs will be around for a while longer than that, I've just added a new branch in the last year, we've brought the building so I've been confident enough in the future to do that.

    We haven't seen a reduction in numbers using us in the past 20 years so not concerned for the next ten, like any business you need to continually evolve what you offer to stay up there. But that's the fun isn't it. We combine a few different building related services in our offices and no one of those is not financial.
  • kabayiri
    kabayiri Posts: 22,740 Forumite
    Part of the Furniture 10,000 Posts
    michaels wrote: »
    ...
    There is value in a third party in suggesting how to best present a property and some people are just not naturally good at sales especially of their own house (I had to do a viewing last time I sold and probably didn't help by expressing surprise to the local teacher who was viewing that a teacher would look at what was clearly a commuter property and thus more than a teacher would look to pay...)

    Really?

    I think you could channel skip all day and all evening and watch wall to wall telly about houses : auctions of houses ; doing up houses ; nasty landlords and slum houses ; selling houses ; dream houses ; SOS housing stories.

    If you don't fancy telly, the Daily Mail and Express will oblige with a few dozen house articles a week.

    We are much more house savvy these days.
  • kabayiri
    kabayiri Posts: 22,740 Forumite
    Part of the Furniture 10,000 Posts
    These new firebrand virtual EAs like the ones mentioned here will work out how to be registered in Ireland; thus making very little profit. An army of tax lawyers will show them the way.

    The independent EA will not be able to compete.
  • Personally I think EAs will be around for a while longer than that, I've just added a new branch in the last year, we've brought the building so I've been confident enough in the future to do that.

    From where?
  • There's already a few 'office-less' Estate agents in Hertfordshire e.g. http://www.onepercentorless.co.uk/ and https://twitter.com/danielscottea

    We tried to sell through one of these, but they didn't do the job well enough and ended up using one of the high street agents. They sold quite quickly.

    I don't think the high street agent's time is up yet
  • PasturesNew
    PasturesNew Posts: 70,698 Forumite
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    edited 29 January 2016 at 2:12PM
    There is a place for them.... but they have to adapt or die.

    Firstly, they take a %age of the sale. While house prices have outstripped all other incomes etc this has simply not made mathematical sense.

    They, too, could work for a "fixed fee". This would work by reducing the number of agents out there on the High Street - and each of them being more concentrated on the local area. So you'd end up with local agents, working on more houses in a smaller area. They'd be travelling less, so could cover more properties with their time. Plus, they'd be more "area-centric" and really be able to price houses at the right price for their area.

    Too many agents have a huge area to cover and probably spend most of their day travelling around.

    Maybe there's a new niche business to be found .... "conducting the viewings for the householders who are selling their own houses, as they find that awkward (with working) and intimidating". e.g. £50/viewing should cover it! They could take the calls/set up the viewings etc.... but just the physical viewing part is done on an "accompanied by ..." basis. With offers then being called through by the buyer directly to the seller.
  • lush_walrus
    lush_walrus Posts: 1,975 Forumite
    From where?

    From the seller. I assume your point is who through? If so a commercial agent. Not sure what your point there is.
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