The Alex Goldstein Property Show (Part 6)
Join property expert Alex Goldstein this month when we meet Harrogate’s equivalent of Phil Spencer, insurance broker expert Mark Robinson, plus top tips when buying a property and lots more!
The Alex Goldstein Property Show(Part 6)
Full transcript below:
Alex: Welcome again to the Alex Goldstein Property Show. The only fast-paced property radio show on Stray FM, which aims to give you up to the minute expert property advice from a wide range of related businesses, insider knowledge and know-how, all packed in, so you can make the best-informed decision when it comes to buying or selling your home. We’re available for pod cast download on the first day of every month so make sure you sign up to the Alex Goldstein social media accounts to get an early reminder of this and to get expert property advice whenever you need. In this months show we will be getting the inside track from Harrogate’s very own answer to Phil Spencer, specialist insurance broker Mark Robinson and discuss the merits of open viewings, of course also have the Alex Goldstein top tips so much to cram in so let’s get straight on with it.
This month we’re discussing the property portals or the property search engines I’m sure you will have all heard of, Rightmove and Zoopla which are the UK’s most well-known, high-profile property search portals. However, there is a relatively new contender in town and it’s called On The Market. Now On The Market, this was launched in January 2015 by a consortium of estate agents and they have the sole aim to wrestle control from the two market leaders, Rightmove and Zoopla, by only allowing estate agents who wish to use their site to list their properties on only one other major competitor’s portal. So, in other words for an agent to advertise on On The Market, they could only then advertise on either Rightmove or Zoopla and at the time many agents gave up Zoopla. The other significant difference about On The Market is that it’s only full-time office-based estate agents that are allowed to list their properties. So, no online agents and no private listings so that’s a bit more unusual and being owned and run by estate agents their aim is to be in control of their website presence and to do this at a more modest cost then Rightmove, which is quite honestly viewed by many agents as having them over a barrel due to the very high monthly costs and arguably in turn this is passed on to you the consumer. Now, as this is an agency owned website, the On The Market logo appears across the agents marketing materials and the offices, which is probably why you’ve seen it. Now, together with a lot of their TV advertising campaigns the site has speed and simplicity on its side. Of course, no adverts to confuse you and it’s a lot clearer on the eye. The other significant factor is that some agents who subscribe release their properties first onto On The Market and that is before the likes of Rightmove. So therefore, if you’re looking to stay ahead of the competition, which we all are when we’re buying this is a very lucrative option. Greater competition within this marketplace an only mean better news for you the consumer or homeowner as lower costs will hopefully in due course be passed on to you. The greater the online exposure when selling the better off you’re going to be. Time will tell of course if On The Market proves to be the significant challenger to Rightmove and Zoopla but so far, it’s arguably made solid ground in one of the most competitive estate agency related sectors.
This month I thought I’d turn everything on its head and I thought I’d give you an insight into my world, so I’ve invited in guest host for the time-being, Michael P Cotler who is Harrogate’s equivalent of Jeremy Paxman. Michael it’s over to you.
Michael: So, this opportunity is for everyone to understand what Alex is all about and really how he got to do what he does so well, so first question for you Alex I suppose is, what’s your background? How did you get into this sector?
Alex: I suppose it was just by sheer chance many years ago when I was at university I got some great work experience and from there, doors start to open, you get an insight into the estate agency world, got a great job with Cluttons who are a big name in the South East and London and sort of worked up the rankings and quite a lot of experience over 13/14 years.
Michael: A really big company, you must have gotten a huge amount of experience looking at it from both sides of the fence I suppose?
Alex: Yeah, very much, I mean you really have seen sort of all sorts of properties ranging up to stuff you see in the press on a national scale so some stuff that you’ll remember for the rest of your life dare I say on some of them.
Michael: So, what made you start up on your own then? I mean you’ve got a pretty good job, you’re working in some pretty big organisations, you’ve got some real kudos there. What’s the reason you decided to pack it all in and start your own business?
Alex: Yes, great question. I suppose I became disillusioned with the way that estate agency was being run, it was very different to when I first started. A lot of businesses nowadays and especially estate agents, it’s all run on targets, it’s key performance indicators, its daily targets and it’s all about how many calls you’re doing, how many deals you’ve got and it’s almost that you’ve got this big stick mentality from head office and I just felt that your almost incentivised I suppose not to look in client best interest at time and it didn’t quite fit true with who I am, and I suppose morally didn’t quite feel right.
Michael: Ok, I suppose, when you say from a moral perspective, what do you mean?
Alex: Well as an estate agent nowadays, and a lot of these guys it’s all about I suppose the short-term. It’s all about short-term targets, get it in and bill it. So, I remember very well that you went to see, say you’re selling your property, I’d go to see you and before I’d even stepped through the door in the back of my mind I’ve just got to think I’ve got to get Michael to sign that terms of business, I’ve got to get his instruction. It may be conversely that the best advice to you to maximise the value of a property could be, Michael you know what, let’s go and get outline planning permission for that big extension, let’s add value by doing that, then let’s put it on the market. You’ve got to look in client best interests and now I don’t have targets, or KPI’s or anything like that, its genuinely looking in your best interests as a homeowner to get the best buyer.
Michael: It’s almost like one of those programmes that you see on television isn’t it, where you have an expert, people often call you the Phil Spencer of Harrogate. It’s a bit like that sort of situation where you have somebody like Phil Spencer who’s an expert in property, comes in, looks at the property and gives them an objective perspective. From that objective perspective people then start to build trust and understand where you’re coming from. From your point of view, why do you think that’s going to be beneficial for the client?
Alex: A lot of it nowadays is the fact that you’ve got an expert like myself, who’s got a lot of years under his belt and experience I think is absolutely key, critical on dealing with let’s face it your most important asset on this planet.
Michael: People say that it’s also the most stressful thing to purchase as well, a house.
Alex: I think divorce is just behind it and I think death probably just behind that, it is still one of the most stressful things in your life and actually the biggest key to it is actually predicting problems before they’ve happened and to nip them in the bud so again you can keep the process very smooth.
Michael: Proactivity I suppose as opposed to reactivity.
Alex: It is that but also it comes down to experience and for me it’s one of the biggest frustrations out there at the end of the day. Estate agency isn’t licensed anyone can start up, you could start up tomorrow your own estate agency and just start going and as long as you tick the right boxes legally you’re absolutely fine. The biggest problem I have to say is a lot of these online guys that sort of buy franchise opportunities. Yes, they are amazing sales people, they’re from car sales or I used to be insurance sort of thing, dealing with property is something very specialist and shouldn’t just be sort of glibly sort of thrown away and very often they get caught out because they haven’t got that foresight and knowledge and experience to see through a problem and it’s very often where I have to get involved because a sales gone completely off kilter and it’s down to someone like me to come in objectively and just get it back on track.
Michael: And the other thing of course which must be a huge issue is that it affects the confidence in the individual and in the world of estate agents selling property that they think that everybody’s tarred with the same brush.
Alex: Unfortunately, yes, I mean it doesn’t matter whether you’re an estate agent, a politician or dare I say a traffic warden, I think every sort of sector in this world you’ve got a tarnishing of sorts. Estate agents used to be I think the most hated role out in the UK, I think that is topped by the bankers and the politicians at the moment, but it is a great pity because there really are some superb estate agents and negotiators and actual team setups and it’s just knowing what to look for, with experience behind the scenes to guide a client through those sort of fairly tough times.
Michael: Ok, so let’s look at it from a slightly different perspective now, let’s look at it from the consumers perspective. What is the advantage and what do you do for me having decided that I want to sell my property, what exactly is the process that you follow and what would you do for me?
Alex: So, if you’re looking to sell your property and I go as you know I cover Yorkshire and London, as I’ve intimated already it’s about where you can maximise value. Now this could be going through planning, it’s sorting the cosmetics out, it could be the finer details but also as with a lot of these it’s planning behind the scenes and actually getting the agent out is one of the last things you actually do. So, it’s sort of making sure you’ve got the solicitors lined up, it may be that we call on a surveyor to check for the roof, so we’ve got that absolutely nailed down.
Michael: So how do you get paid from the selling perspective, how does that work?
Alex: Well once I’ve sort of bought in and advised on independently the most appropriate agent, I sort of, I link in with the agents on a weekly basis, I remain proactive. So, I would ring said agent once a week on behalf of Michael who’s selling the property, get the latest from them, it takes me sort of 30 seconds to a minute to understand where they’re going because I’ve been there and done it myself and then I can report back to Michael. Twenty minutes / half an hour, Michael this is what’s going on, this is what it all means, proactively with my experience we need to, I don’t know change the online advert, agreed, great, agent please can you get on with it. So, all of a sudden, you’re now speaking weekly with the estate agent, you’re being proactive because you’ve got me on board. The key to it is the appointed agent, who’s been instructed independently of me, charges you their standard commission rate in the market, the agent pays me a cut of their commission. So, if you are selling a property you have absolutely nothing to pay me at any point to have me on board, so I suppose it’s into a no-brainer type category.
Michael: So literally the agent will pay you so the house owner, the homeowner who’s selling has got no cost for all that objective perspective?
Alex: No, the cost remains exactly the same, it just means that you’ve got extra expertise and knowledge and guidance. The agents like it because in effect I have, forgive the analogy, packaged up you and the property. We’ve got the planning, we’ve got the solicitor, we’ve got the right marketing strategy lined up, you’re ready to go. It’s win-win situation, the agent still retains a good proportion of the fee, I get paid a percentage of that, it’s win-win, and that’s where I can link in with a lot of the solicitors, the private banks, I’ve done stuff with Google in London as well because again it’s a very unusual service.
Michael: Ok, fantastic. The other week I was out and about speaking to a solicitor and the solicitor was raving about you and saying how you actually helped one of their clients. How does that one work?
Alex: That’s very kind you know thanks for mentioning it and this was actually on the buying side of things and this was actually for a client of theirs who was getting very frustrated. They were in a good position to proceed but they weren’t getting any traction with the agent, they weren’t getting tipped off early and they were very fortunate, they were all cash, there was no mortgage, they were in rented but they just weren’t being taken seriously.
Michael: Ok, so just one thing I just want to make clear here, so this is the other side of the business, where you’re actually going into the market and purchasing properties for clients. So just rewind a tad and just explain how that part of the business works. So, you’ve got the selling side that you’ve just talked about and this is the other side of the business.
Alex: It is, and again very often people get frustrated or they don’t have the time or very often they don’t know what they’re doing. It’s all well and good you hear on the TV and in the media, this is how to buy a property, this is what you do but actually putting that through into real terms. If you’ve ever done it before it’s actually incredibly daunting. So again, adding value through there and I do a lot of relocations as I said I cover Yorkshire and London so people moving between the two, I can effectively hold their hand and guide it through. But, again it’s with experience I am an ex estate agent at the end of the day and you know how the system works, you know how to get your client to the very front of the queue and sometimes and again it’s a big trend at the moment, what’s called the off-market sector. And this isn’t necessarily with estate agents and if it is it’s not on the open market, it’s not online, very often you’re going direct to the developers that have just finished a new project or because I’ve been in the business a long time I know the homeowner so if you give me your criteria, we’ll go out and search for whatever specification you’re after, we negotiate and we secure on the right terms and see it all the way through and I act on behalf of you, the purchaser, in that instance and you just pay me a fee for that service.
Michael: So, this is a service where you’re paid a fee but again you give a completely objective perspective and from what you say to me then you actually have access to properties that are probably not on Rightmove or not on other websites that most people would look at when they’re trying to buy property.
Alex: Probably just over half the purchases I have done have been completely off markets, no one really knows about it, and you are just placing the buyer, my client with a specific type of property and it’s guiding them through that. It’s also then bolting on a lot of connections that I’ve got. Again, I don’t get anything for it and I always say to everyone up front, if someone moves into a property, they buy a property and I don’t know they want to do the extension, they need the roof sorting, or they want some really nice carpeting to go through, who do you know, who do you go to, who is trustworthy?
Michael: Well that’s a whole ballpark on its own, getting tradesmen in and knowing who you can trust and getting the best price and all that.
Alex: Absolutely and again just I’ve been round the block as they say, a lot of years, I know a lot of these guys, they are completely trustworthy, and I don’t charge for it, they don’t charge any more. Again, it’s looking at the bigger picture which I wasn’t always allowed to do in the corporate world is that if I can help you, as a buyer and indeed as a seller, if I help you and the general cause, again it helps you, it helps me, everyone wins as I see it. It’s not about getting a lot of businesses to do sort of backhanders in brown envelopes and all that, I’m not into that at all and keep it very simple.
Michael: So, it’s all about really adding value to the client in every respect whether it’s from a purchasing perspective or from the selling perspective, it’s all about adding value.
Alex: Yeah very much so that’s exactly what it’s about.
Michael: So, the other night reading through the Yorkshire Post and you’ve got a column.
Alex: Yeah, I do, Yorkshire Post Property Column, I think the next ones out in about two weeks’ time, and again that’s giving you an insight into my world. It’s not selling anything as you may sometimes feel, it’s just giving really good advice and expert opinion and experience that’s what it’s about.
Michael: Well fantastic. So, in summary your buying properties, your selling properties, you’ve got 14 years’ experience, you basically have the majority of your stuff is not the kind of stuff that you would see on Rightmove, it’s something that’s offline so if people are interested in properties that they probably don’t even know that are for sale, you’re the man to speak to.
Alex: Yeah, I very much put it like that.
Michael: Fantastic, thanks very much for your time Alex.
Alex: My absolute pleasure, thanks very much Michael.
The property hospital is all about me answering your questions, queries and quibbles when it comes to your experiences in the property sector and this month I’m answering a question from Sam who’s got this to say.
Sam: Yeah so, I hear a lot about viewing days and how they’re quite beneficial because obviously you just have to have your house clean for one day, a lot of people come in at once. I just want to know what your take on it is really because I wanted to know what the best thing to do is with regards to making sure the house sells.
Alex: Sam, interesting question here. As I see it open viewing days can be very useful if you’ve got an unusual property in the market and one that’s likely to create a lot of instant interest in it. It’s a very fair way to get a large number of people through the door in the most time-efficient manner. This situation often applies to properties that need extensive refurbishment because they don’t often crop up in the market. Now, open viewing days are a useful option if your property falls into this category or as part of a overall marketing strategy. However, don’t think for a minute that you’re going to get a barrage of viewings with 30 odd people storming through your home in an afternoon. This really very rarely nowadays happens, more often than not you just get a small handful of people all coming to view. The key with open viewings is to keep the timeframe for people to view quite tight, such as a couple of hours and not a whole day or afternoon, as this will now focus their efforts. Ensure that the agent can ideally accompany the viewers around and that all viewers are signed into the property, so they can be followed up down the line for feedback. Personally, it’s usually best to have viewers shown around individually as you often get more out of them in terms of what they like or dislike about the property. Always try this route first then revert to an open viewing opportunity if the need arises. I hope that helps.
Voiceover: The Property Hot Seat
Mark: Mark Robinson.
Mark: Henderson Insurance Brokers Limited.
Alex: Mark thanks so much for coming in.
Mark: No problem.
Alex: I suppose it’s a phrase often thrown around, an insurance broker. I mean what do you guys actually do at the end of the day? What does an insurance broker actually entail?
Mark: Very very good question. One of the big things people tend to forget about insurance brokers are that we are actually a professional advisory service, we are advisors. So, it’s best to think of us as a lawyer, or an estate agent. We’re here to act for the client. The common myth is that we’re there to act for the insurance company, in fact we’re not it’s the other way round entirely. So, it’s our job as a broker to advise you, A – what cover you need, B – why you need that cover and C – make sure that you get the right price for that cover, to make sure that you get the best deal in the market, and that you’re speaking with the correct insurers for that.
Alex: The obvious question which I’m sure will come as a result of this is how are you paid? How does that side of things actually work and come together?
Mark: Again, very simply, two methods really, depending on what type of insurance policy it is. So, if we’re looking at household insurance, private car insurance, the personal lines type insurance, brokers will 9 times out of 10 be paid via a commission, so that’s where the insurance will pay us as the broker for arranging that insurance.
Alex: So, sort of an introductory fee or procurement fee as the finance authorities refer it to. So as a client Alex, buying said premium from Mark, I’m not paying anything extra on the bottom line, it’s the fact that you’ve advised me and said you need to go with ABC insurance ltd, and ABC turn around to you Mark and say thanks so much here’s a fee towards bringing Alex on board. Is that effectively how it works?
Mark: Exactly. Now if we were looking at the corporate side of insurances, the commercial business type of insurance, again we can either take a commission as payment from the insurer or for large premiums we would look to net that down, go commission free and charge an agreed fee dependant on the service.
Alex: So what sort of lines of insurance do you cover? Obviously, you’ve got the obvious ones such as homes and insurance, you can then think of all sorts of quirky things. I know there’s sort of the, sort of the salary side of things, you can get insurance against that, there’s all sorts of weird and wonderful bolt ons. What do Henderson’s really specialise in, what’s your forte?
Mark: Well we are a general insurance broker so it’s a tough question to nail down to any one particular thing we specialise in because we do everything as a general broker. However, as a group we do have various divisions, so we have a large credit insurance division, we have a large high net worth division, we have a large bonding division for contract construction bonds and what have you, so yeah difficult one to nail down so we will look at the general business insurance and the household insurance.
Alex: So basically, if I can think of it, Henderson insurance, have probably got someone within their office team hat can actually sort of point me in the right direction and help me out.
Mark: That’s it exactly. I mean we’re a Lloyd’s broker, so we place business into Lloyds of London so as you say anything that you can think of that can be insured, we will find a way to insure.
Alex: That’s all you need to know. I suppose everyone always says why don’t I go to one of these comparison websites, so Money Meerkat so to speak. What are the issues of doing that, why would I not go to one of the online providers and why would I want to go to a general insurance broker like you?
Mark: Well the first thing to remember is online insurance providers aren’t authorised to provide advice. They are basically there to provide a service of I want to buy X product, this is X product for you to buy. Therefore, if you use an online provider, you’re basically paying your money and taking a chance that you’ve decided that the product that you’re buying is correct. The providers aren’t likely to give you any huge support in the event of a claim and where they do give advice, 9 times out of 10, this is going to be call centre type advice, which isn’t specifically tailored to the requirement of that particular question.
Alex: So you’re taking effectively more of a punt, bit more of a gamble as you said, you’re running through a huge list of possible options but as with all of these things and I know insurers are well known for it, its all in the small print isn’t it, and there’s sort things that are omitted sometimes, whether accidentally or not but you guys are well versed and can see through all that.
Mark: Certainly and on the subject of claims, if you go to a online provider, a direct writer and you have an issue with a claim, when you go into challenge that, you are one person challenging a claim, whereas if you go via an insurance broker, its likely that that broker has millions of pounds with that particular insurer of placed business, therefore we’re not then just approaching that insurer to resolve an issue as an individual, we’re going in as a buying group so to speak. And also, on top of that we’ve dealt with pretty much every claim, every type of claim there is going so we have the precedent to say ok well, this is how you resolved this type of claim last time around and this is the way we want to go with this claim again. So, it’s entirely down to the service and the advice and that’s harking back to what I mentioned earlier, we are a professional, brokers are a professional service.
Alex: As a generalisation with your experience, what are the pitfalls that say the buying public need to be aware of when getting involved into the insurance world, whether it’s for cars or houses. What are the pitfalls you need to be really careful of?
Mark: The biggest one really is under insurance, so this is obviously not valuing your possessions correctly, or buying a poor policy that has abnormal exclusions in just because it was the cheapest one available. Also, paying for cover that’s not required is another big one we see, especially when we look at direct policies. Again, it tends to be a one size fits all type arrangement. We look at, on the subject of properties, we look at rental insurance and a lot of people that rent don’t tend to buy insurance because they think well I’ve only really got contents cover and the landlord will look at the rest of it. What they don’t realise is that a policy gives them more than just contents cover and one of the big issues for them is liability or negligence that would damage other people’s property. So, for example you, your renting a property, an apartment and you flood your flat then great you’d be covered but what about the people in the flat below.
Alex: Isn’t that covered by landlord insurance?
Mark: If it’s you that’s done it as the tenant, then it’s your liability so it would come against your liability.
Alex: Well I tell you, you learn all sorts on this show, I had assumed that the landlord cover may have sort of covered that under the landlord cover.
Mark: It would cover the damage to their property but not necessarily damage to other people’s property.
Alex: Great top tip there. Some great insight there into the insurance and brokerage world and some real great insider tips. I suppose just as a parting thing I always like to ask something a bit more amusing. What’s the most expensive possession you’ve ever had the pleasure of insuring?
Mark: As a group we routinely insure extremely high value items and I think that the most expensive and exciting item I’ve ever seen insured was a vintage Patek Philippe watch and we insured recently for just over a million pounds. That stands out in my mind.
Alex: I think it would in most peoples.
Mark: Yeah as a group we insure several classic cars, we insure a few racing teams who have some fairly sizeable vehicles and again recently we’ve insured an engagement ring for about 2.2 million so cross the group there will be more stories to tell that I’m not aware of, but we certainly have some fairly sizeable toys.
Alex: No kidding, very nice to hear and I suppose if anyone wants to talk through their £2.2 million engagement ring or any other insurance matters, how can people reach you and chat it all through?
Mark: Well we’ve recently opened a new office in Harrogate so the best number for us is the office line which is 01423 200000.
Alex: Fantastic Mark, thanks so much for coming on and talking it all through.
Mark: Thank you.
Alex: When you’re looking to buy there are three key top tips to get right every time. Firstly, you need to get yourself into the best possible position. I know people often think they know what this means but ideally this actually means you’re in rented accommodation. Being under offer is still considered relatively risky by the estate agents as there’s an additional chain involved which they don’t have much control over. Going into rented when you sell means you are chain free for this part of the transaction. When you go on to buy it means that you are purchasing from a position of strength and this is seen as very low risk. Overall, it also takes the stress completely out of your sale and purchase. Appreciate look, I know it’s two moves but honestly it really is well worth it. The other point when buying is to have your mortgage lined up. Due to the current financial regulations getting mortgages through takes so much longer and to prove that your part way down the line and more reliable than most, go through your lender and get what’s called an agreement in principal or a decision in principal lined up. This is effectively just a signed paper saying that your lender is going to give you a mortgage for such and such amount subject to a couple of conditions. To get this will mean a bit of work for you and your lender but it really does show good intent from your part when you’re buying. The third and final point is to have your solicitor instructed and ready to go, and this means getting them to open a file for you, sign off client identification checks and possibly have some minor funds on account to get the searches undertaken ASAP. You really would be amazed how long these couple of points can take, so it’s best as I see it to get underway when you’ve got time on your side and you’re not under intense pressure from the seller, estate agents and their solicitor pushing you for answers on other matters. If you need to talk these points through further, you only need drop me a line.
That’s all for this month from the Alex Goldstein Property Show, and what a programme it’s been. If you really want some top expert advice, come to my educational talk at Leeds Business Week in October where I will be speaking alongside no other than Price Waterhouse Cooper. It’s free and full details can be found on my website alexgoldstein.co.uk There is also my new Saturday Yorkshire Post property column, which is out in the next couple of weeks. The next episode is out on 1 October so make sure you tune in for that. Until next time.