Scarcity mindset fails in any market.
Scarcity mindset is rife in the property industry at the moment. And not just because Theresa May has resided over the biggest area of low pressure in London property since the filming of Dead Calm (1989, in case your interested).
UK property is spooked by the emergence of online brands and the doomsday prophecies that accompany them in the media. Headlines recently have proclaimed the end of local agents before we are half way through the next decade.
But it’s important to maintain perspective in such times.
Black cabs have not, as many forecasted a few years back, faded away in the face of Uber’s meteoric emergence. Contrastingly, while Uber has been mired in scandal and regulatory uncertainty, London taxis have improved their customer experience. Card payments are now standard across the board, and taxis have got bigger, cleaner and some say the drivers are more polite and appreciative of their clients.
In much the same way, bookshops upped their game after Amazon threatened to crowd them out. They introduced in-store coffee, better spaces to hang out and read, and as a result brands like Foyles and Waterstones have had their best years.
It’s all about maintaining a sense of abundance as the market changes, and seeing clearly there is enough for everyone.
Uber didn’t put black cabs out of business, they just made it possible for more and more people to travel by taxi. Amazon created more interest around books and learning. Both of these things were good for their competitors, as long as they responded intelligently.
Lately I’ve been blogging and commenting on the upsurge in online agents, and how it’s impossible to know whether they are actually performing for their clients. It’s one thing paying £900 to get a listing on someone’s website, it’s quite another to sell your house for the same sum. All the signs tell me that there are deals being done by online agents, but far fewer than you might think, and the vast majority at the bottom of the market. Most online agents are simply in receipt of a high volume of subscription based fees… that shows strong commercial results in the short term, but is no indicator for real long-term value, for either customers or shareholders. What will dictate the eventual success of these online brands, is one thing and one thing only: the ability to sell their client’s property. How many times will punters shell out £900, for no return? Once, maybe twice is my guess.
I’m not suggesting that the online agents fee structure is any way nefarious or misleading. All I’m saying is there are many other areas in online markets where the initial fees paid by customers do not show real ROI. Did you know that online education and webinars see 80% + dropping out and losing their fees before the end of their course?
And agents are always here to sell the properties that others cannot. I’ve heard of three separate instances in recent weeks where local agents have been called in to clear up after online brands have failed to shift stock. And all have done so successfully, because they know how to sell houses.
If it was as simple as biking someone a set of keys to the front door of a property so they can let themselves in and decide ‘Yes!’, believe me we would have developed such practices a long time ago. But it isn’t. And especially the higher up the ladder you go, every decision and every piece of advice you’re given about buying and selling your property, can equate to five and six figure swings in either direction – that’s in your favour, or against.
The doomsday prophecies will only come true for poor performers. Those who know how to do their jobs well, and sell houses, will continue to do so. In fact there will be increasingly better times as the market comes back, Brexit gets sorted, and the geo-political situation evens out.
There may even be room for the online agents – especially those who can actually sell property.