Spring newsletter: the truth about online agents!
It’s our busiest time of the year here at Homes One, and as ever the London property market is full of surprises.
This time last year we had a small number of deals on at the top end of the market, and this year we have more deals on at a lower price point.
And as far as I can tell, we haven’t done anything differently!
We focus on being industrious, calling the right shots and being in the know. We recognise that above all else our clients want guidance, and we take pride in this role as we accompany them through a highly changeable marketplace.
London property is like life – in its purest form it is unpredictable, exciting and rewarding, providing you can handle the raw emotions involved in such a challenging environment.
You can’t call it either way, you can only observe things as they are, and roll with the ebb and flow.
The truth about online agents
Recently I blogged about online agents and received great feedback from friends across the industry, many of whom share similar views.
Open the property sections of the newspapers and all you find is headlines proclaiming ‘the end of the middle man’ and ‘the death of the property agent’. Yet I am always curious about the bluster behind any ‘runaway success story’.
And what do share prices really tell us? Perennial UK player Countrywide has dipped by 70% and Purple Bricks, the leading online property start-up, has risen by 350%... but just look at Twitter – a few years ago it was one of the most valuable tech companies ever, now it’s a relative minnow after increasingly disappointing commercial results. How much do market conditions influence Countrywide’s valuation, and how much does start-up fever influence Purple Bricks? For share prices, read Bitcoin. We just don’t know yet.
Added to which, online brands are open about the number of instructions they have, and they are open about the amount of properties they list – but they are cagey about the number of deals that are actually being done.
What’s not in dispute is industry-wide metrics. Online agents still account for only 5% of total property deals done in the UK. Granted these brands have come out of nowhere from five years ago, however several of these new players have been accused of dishonesty and exaggeration recently, which tells me that perhaps venture capital may be running out, and reality might be setting in.
I would love to know, for prime London in particular, how many online deals are actually being done. For country cottages and small homes in the provinces it’s obvious why someone might choose an online agent, and there is data to support that this is happening.
But for premium purchases in prime central areas it doesn’t add up. Buyers and sellers need stellar advice or they can end up seriously out of pocket – to the tune of an entire rural house in many cases.
Navigating the highly nuanced process between buyers and sellers at the top end of the market cannot be done by computers. Transactions are constantly evolving and need to be managed with care and experience.
At Homes One, in 95% of instructions we save our clients more than their fee, based on experience and local knowledge that online agents simply do not have. In direct contrast to this, many online brands take their fee regardless of whether the home actually sells! And the client pays upfront.
The good news is there is room for everyone...
In the wake of Facebook, Cambridge Analytica, and the election results for both Trump and Brexit, I am sure the online space will be further regulated on all fronts. The wild-west game of smoke and mirrors is over, and everyone will have to be transparent and accountable.
Reality is the real frontier we are all facing.
So any whistleblowers out there who know the true state of the online agent game – not the turnover, not the growth, not the market share, but the number of properties that are actually being sold - call me – or drop me a line. Because I would love to know!
For the summer months:
Due to recent results we are more confi dent than ever of being able to fulfill your brief and find your dream home. As such we are waiving our retainer from May-August.
Catch up soon?
Life in prime central London is good. Drop in and see us at The Pavilion anytime.
Especially if you have some online trade secrets for me!
T: 07958 485 611