The Alex Goldstein Property Show (Part 7 )
Tune in to property expert Alex Goldstein who this month gets expert insight into the world of estate agency, when he interviews on of the leading trainers of negotiators in the sector! We get the low down on what to pay estate agents, mortgage broker vs banks and lots more!
The Alex Goldstein Property Show (Part 7)
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 property expert advice from a wide range of related businesses, insider knowledge and know-how, all jam packed in, so you can make the best-informed decision when it comes to buying or selling your home. We’re available for podcast 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 get expert property advice whenever you need. Now, in this month’s show, we’re going to be having one of the most interesting conversations to date where we’re getting inside track information from Boyd Mayover, now this chap is a specialist trainer who actually teaches estate agents. We also put Mark Edwards from House of Harrogate in the hot seat to better understand the kitchen and interiors business. We also discuss mortgage brokers versus banks when getting mortgages and of course we have the Alex Goldstein top tips. So much to cram in, so let’s get straight on with it.
This month we discuss the property market post-Brexit. As we saw and as I predicted there was a dip in property transactions and general activity just after the Brexit result. What I also predicted was that the market would bounce back. Now, I never like to use the phrase I told you so, but it’s always good to know that my forecast about the property market has proven to be correct. Now, only today according to Rightmove, within the last month the average asking price of new listings has rebounded and increased by 0.7% and that’s a inquivalent to £3,000. Visits to the Rightmove site were also significantly up by almost 8% when compared with the same period last year. So, what we know is that activity is back up, viewings are getting right up to speed and there’s more traction in the market. However, in this flurry of activity prices of homes for first-time buyers have all greatly increased and this proves the continual difficultly they face when trying to get on the housing ladder. On this point I spoke a few months back about government intervention in the marketplace with the introduction of the new 3% stamp duty levy, curtailing of mortgage interest relief and toughened up buy-to-let criteria and that was with the aim to put brakes on property investment and wealthier individuals. Well what its really done and what I actually forecast is it’s pushed those looking at more valuable properties, whether it’s for personal or buy-to-let purposes now they’re looking to buy property at lower price points in the market because it makes more financial sense for them and what this has done is it’s pushed up prices for first-time buyers and it’s flooded the market with a new type of buyer. So, what do my predictions and forecasts really show? What it means is that whether you’re a first-time buyer, up-sizer, down-sizer or buy-to-let investor, now it’s never been more important to get advice from a experienced property professional. There are gaps in the market and it’s really how you play the game. Play your cards right and not only will you get the property you want but one which will be a great investment as at the end of the day, that’s why the bulk of people buy into property as it remains one of the safest investments you can make over the medium to long-term.
Very excited indeed to be interviewing a chap called Boyd Mayover. Now he has a company called Sale Doctors and what’s so incredibly interesting is he actually teaches estate agents behind the scenes. So, Boyd, fantastic to have you on the phone this morning, thank you very much indeed for spending the time with us.
Boyd: That’s great, thanks for asking me.
Alex: Not at all. Now just sort of getting straight into it, just talk me through how from your perspective from the effectively the sales teaching point of view how you feel estate agency as a business sector has actually changed over I suppose the last 10 years or so.
Boyd: Well I think there’s a few things that have changed. I think some of the estate agents have started to realise that they’ve got to be far more consultative, the hard sells gone unfortunately, I’m sure there’s a few oddballs out there but by and large the hard sells gone. The estate agents are realising they have to offer a world class service now, otherwise they are not going to keep and retain business and when I say that I mean to everyone to the tenant, to the landlord, to the vendor and to the person buying, and that service has to be from the moment somebody calls them, to the moment that they’ve moved in.
Alex: And you feel this is one of the key areas that estate agents really need to get better at, if not the only reason that they need to get better at in terms of keeping their clients?
Boyd: Absolutely, I think they forget sometimes, and what happens is, you know Alex, there’s times where estate agents are very busy and life for them is pretty easy and what I find happens then, they get lazy. And if they have a lot of enquiries they don’t treat each enquiry with the respect it deserves.
Alex: Why is that Boyd? Why do you feel agents don’t, I suppose that’s partly why they get a bit of a bad reputation is the handling of calls and returning of calls? Do you feel that’s the case?
Boyd: Yeah, I think it’s because they cherry pick and sometimes the culture within the agency. I’ve heard they can say things like they’re just tenants. Think about it, the person who’s renting today might well be renting to scope the area and then have a absolutely enormous budget to buy so it’s a very short-sighted attitude Alex, and they are changing and they are getting better but there’s still too many of them treating the customer, I call it the George Clooney effect, I say if George Clooney walked into your estate agency office tomorrow would you treat him any differently to your normal clients, and unfortunately over 80% of agents say yes they would.
Alex: Yeah, I’d probably agree with that having been that side of the fence as you know. I mean I guess a lot what’s changed over the last 10 years or so is very much we’re now of this target type culture and key performance indicators and that sort of grindstone mentality and I suppose from your perspective which is almost very much the insider with estate agency, do you feel this has changed the business sector for better, for worse, or do you feel that it’s just had no effect whatsoever?
Boyd: I think it’s changed it for worse with corporates. There are many companies I know that built up very nice businesses, they might have had seven or eight branches or maybe, got taken over by a corporate and within a year their staff turnover was almost 80%, because they changed from what made that company special and why they bought them to just a sales machine, where the only thing that was important was the number of calls you made and it just doesn’t work. Let me tell you Alex unless estate agents are careful, the likes of Purple Bricks and Easy Property are coming over the parapet with it with their bayonets fixed, unless they’re careful they’re going to lose the war and it will be their own fault.
Alex: I know it’s a valid point and I mean it’s very much sort of seen as the insurgency so to speak at the moment these sort of pure online agents like Purple Bricks, you’ve got the hybrid agents such as You Move for example. Why are they making such a hit within the estate agency sector? Why does their business seem to be growing at the moment and they’re taking more of the properties on?
Boyd: Well I think its simple, if the customers perception is that he’s not getting a good service and in fact sometimes getting a bad service, no follow up, no calls etc. he might as well pay for the cheapest service. Now my experience Purple Bricks, some of these hybrids, their service is not good, you know people that when you buy a property or you’re selling a property, you need the agent to have a great deal of expertise because it’s not the fee you pay, its what you get and in what time line Alex. It is not the fee that’s important to the customer, I urge vendors, don’t just look at the fee, look at what you’re going to get because some of the hybrids they have no sales progression whatsoever. So, what I mean by that is from the moment the customer makes the offer they’re on their own. Now how could the customer know about surveys, about conveyancing, about the fact that his buyer if he was able to get another 1% reduction on his mortgage would easily be able to buy his house rather than struggle. This is what a good, a world class estate agent knows and does and that’s the value in the fee.
Alex: It’s a very very valid point and I suppose it’s also been in the news and while we’re not saying anything untoward but as an example Purple Bricks, just talk everyone through this, because they’ve had a bit of controversy recently just in the way that they sort of get their fee.
Boyd: Yes, absolutely, they get their fee in advance. You pay them your money; therefore, what incentive is there for Purple Bricks to do a wonderful job selling the property at the right price for the vendor – zero.
Alex: Indeed, they are not motivated as soon as you instruct them you pay your money, in effect in advance and that goes straight into the Purple Bricks account and then I suppose they just leave you out there to dry. That’s one of the biggest issues out there but I suppose if you are a homeowner or a seller you don’t find out about it until it’s too late.
Boyd: Well that’s right. If I was selling my property, the agent I want to choose is an agent that can demonstrate to me that they’ve sold properties like mine at the price I want but most importantly, they will hold my hand from the moment the offers in and I want the right offer. There could be two people offering the same amount or similar amounts, one could be in a chain of ten and one could be a cash buyer. Which one would you prefer to buy your house?
Alex: Exactly it’s a cash buyer every time and it’s having the, as I always say Boyd, correct me if I’m wrong, it’s all about the agents experience i.e. the number of years they’ve actually done in specifically estate agency and obviously the front of house team as they are the guys and the girls that tend to take incoming enquiries and walk-in enquiries.
Boyd: Absolutely, it’s the hard yards they’ve done. You know the truth is anybody can go and be Purple Bricks tomorrow, there can be a franchising of Purple Bricks tomorrow and many of these hybrids. Now what experience have you had in selling houses, what experience have you had? Zero in most cases. Not sure that helps the customer.
Alex: Well what, we’ve talked about agent experience, where do you feel that agent experience comes into your own? Why is it not akin whereby someone just in insurance sales for example feels they’re in a sales role and they feel estate agency is very sales led but they don’t have any property or estate agency experience. Where do you feel that they will be let down as individuals and agents?
Boyd: Well, I think what happens is there’s a lot of chunks in the chain and in the journey of selling your house or buying your house. It takes up many different components and someone who’s running a franchise, the master book of how to run the franchise will not tell them how to deal with the mortgage advisor, how to deal with the conveyancing solicitor, how to understand what a survey means, how to ensure that he’s in control of the chain. These are things that only an experienced agent will understand and will have the experience and more important Alex, the history of success. Now, if you and I were looking for an agent tomorrow, we don’t necessarily want the most experienced or the least experienced but would want the one with a history of success who sells properties at the right price in the right time.
Alex: I was about to say, you mentioned the other week to me, you’re also going in behind the scenes to these companies who say we’ll buy your house now for cash. Just talk everyone I suppose on the inside track on those sorts of companies.
Boyd: Well yeah, I was absolutely shocked. I worked with one of these companies and my perception before I got there would be people phoning them would be people who were saying I’m in arrears, the bailiffs are due, I’m behind with my mortgage, I’m desperate to sell please help me, and you know Alex I was shocked, over 65% of their enquiries were from people who just got fed up to the back teeth with bad service from agents.
Alex: And that was their main driver, it wasn’t a fact that they were sort of being into a forced situation, it was just down to customer service at the end of the day.
Boyd: Just down to customer service, I want someone to sell my property for me.
Alex: Well there’s an extremely strong figure and as you said it’s not what you first think from first impressions. I mean how are you actually helping? What do you actually do behind the scenes with estate agents and by the sounds of it you help both the pure online agent, the hybrid and indeed the high street agents in your line of work but what is it you’re actually teaching them and giving them insight on?
Boyd: I think what we’re saying to the high street agent is this, that you have to be world class in everything you do. So, when somebody phones in, what I don’t want to hear an estate agent saying is the first question, what’s your budget and have you got anything to sell? It’s selfish, it’s stupid, it doesn’t help a customer and if I was a potential buyer, I’ve just rang up your agency and virtually the first thing you’re asking me is have I got anything to sell. Too many agents have gone through that formula for too long. What we teach them is show an interest in your customer, find out what’s important to them, why are they looking to move to Fulham, where do they live at the moment, what made them chose the house they live in at the moment, whereabouts do they live, what’s going to be important to them? I always tell a story about a lady that was looking to move and she lived in a four-bedroomed house and she approached five agents and they all asked her how many bedrooms she wanted and she said four, and most of the agents said would you accept three bedrooms, she said absolutely not, the last agent, world class, said to her can I ask you why is four bedrooms so important, she said I believe that four-bedroomed houses always have a bigger downstairs than a three-bedroom and the downstairs is the most important thing. The agent said that’s fine, if I can show you a property with a downstairs in a three-bed is as big as a four-bed would you look at it? She said of course I would and she ended up buying three.
Alex: So, it’s all about asking the right question isn’t it.
Boyd: Absolutely and don’t under promise and over deliver, if you tell someone you’ll ring them back Tuesday, ring them back Tuesday. You know I always say to people when someone walks into your office and depending on the area they could have from let’s say a quarter of a million, to well in excess of a million in their pocket, that’s what they’ve got in their pocket to spend. Now of you were selling diamonds, how well would you treat the customer who came in with a quarter of a million pound – very well. Why on earth aren’t they being treated exactly the same and it has to be from the beginning to the end. You know I always say I hear agents say thank you for looking at the property, I’ll ring you next week and I say but hang on a minute this is someone who has an enormous amount of money to spend it’s very important to them, why aren’t you making an appointment to speak to them next week. Don’t get me wrong Alex there’s some very good agents out there but too many are still trying to take what I call the easy route.
Alex: Absolutely, I think it’s down to you and I Boyd to save the estate agency sector and I have to say thank you very much indeed for coming on. Probably one of the most powerful interviews we’ve had on the show to date. Just remind everyone your contact details and the website if they want to get in touch.
Boyd: The website is www.salesdoctors.co.uk please have a look at the website, I think you’ll find it very interesting. You can always email me at firstname.lastname@example.org and we’re very happy to take enquiries from anyone and as I said our business is all built around the world class customer service should be the minimum you’re delivering. Thank you for inviting me.
Alex: Not at all Boyd, its great to have you on. Thank you so much indeed for a fantastic sort of talk through and real sort of insider tips and tricks and look forward to speaking to you soon.
Every month I’m here to answer your questions, queries and quibbles when it comes to the property market.
Cat: I’m looking at buying a larger property and I’m trying to get the right mortgage. I have been into my high street bank who have offered me something however, how can I check this is a good deal for me please and how should I go about getting a mortgage?
Alex: Great question Cat. When it come to mortgages the market is changing the whole time and most of the time its an absolute minefield when you’re trying to navigate through it all. My advice is only to ever get a mortgage via a whole of market broker, now these are individuals or companies that are independent, they search the entire market as the name suggests and they ensure that the mortgage you’re getting is right for you. Remember a bank is a business and they are there to sell you a product and one which may not necessarily always be right for you. Many also operate via computer so having a person or broker to speak to and discuss the finer detail of your application really can be worth its weight in gold. Depending on the size of your mortgage involve and the broker you go to you may not actually need to pay them anything as they get what’s called a procurement fee or an introducers fee from the eventual lender. So overall go with a mortgage broker as they will search the entire mortgage market for the right deal for you and they will look at lenders that you may not even have heard of. Mortgage lets remember is a very sizeable loan and you really must get it right and if you’re unsure who to speak with just drop me a line.
Voiceover: The Property Hot Seat
Mark: Mark Edwards
Mark: House of Harrogate
Voiceover: Years’ experience?
Mark: 35 years.
Alex: Very excited indeed to have Mark Edwards here in the studio with me. Now, he’s got a fairly impressive department store I think it has to be said, House of Harrogate right here in the centre of Harrogate. Mark thanks for popping by and I suppose a lot of people have passed by the showroom, what does House of Harrogate actually do?
Mark: We do everything to do with the house, so we do kitchens, bedrooms, bathrooms and everything associated with that. So, we do lighting, we do flooring, we’ve built an extension downstairs, so we have bi-folding doors, we’ve got a lantern roof, so what we’re trying to give customers is an experience of the whole house. So, instead of just seeing a particular product like a kitchen, like a lot of our competitors will do, is just have a kitchen showroom, what we’re trying to do is offer the full house experience.
Alex: For everything and I mean if no one’s ever been in there and I mean when I say department store I genuinely mean it and most people don’t appreciate you’ve got this huge lower ground floor and it’s almost you’ve set up a house within a house so to speak. You’ve got a actual house created downstairs virtually with all the rooms in the whole setup.
Mark: Yeah, the reason for that was so people could experience like taking walls down, so what typically might be a normal kitchen, we’re trying to show people if you take a wall out we can extend it out, so you’ve got the kitchen and the dining room experience. Take the back of the house out, put bi-folding doors on so you can see the garden, appreciate it, we also got awning down there that comes out, it’s got heaters on and lamps, we put a garden boom in down there as well for another company, a home office seems to be quite a good thing to have in these days so rather than extending you just have a little pod in the garden that’s a home office.
Alex: Sounds great and I suppose you often hear a lot of kitchen shops and the likes of say selling their wares but as a buyer you’ve always got to be a bit careful. If you were buying what would you want to say to someone to sort of watch out for? What are the sort of tips and tricks just on kitchens?
Mark: Well with kitchens it’s a really difficult thing, when you’re coming out to buy a kitchen I always use a scenario with my customers when the walk in regarding buying a car as an example. So, when you’re buying a car you know which garage to go to and you don’t have the embarrassment of walking into the wrong garage, so if you’re looking for a Mini as a example, you’ll go to the Mini garage, if you’re looking for a Bentley or a Ferrari, you go to the Bentley or Ferrari garage so when you go down there you know you can afford that particular product, whereas with kitchens there seems to be a bit of a sort of myth about it, it’s really difficult to know which kitchen showroom to walk into so what we try and do is to give people a full array of prices of different types of designs and what we do is we explain to the customers when they come in, price points, there’s the kitchen units, there’s the work tops, the appliances and then there’s the fitting, so all of those things can make a massive difference to your budget. I don’t sell to them, I’m trying to help them out on the basis that I give them the full education as to how and where and what to buy, what’s expensive, what’s not expensive, so for example if you had laminate worktops, you might be spending £300/£400 on those, if you had a top of the range dekton worktop, which is a new worktop now, you might be paying £4,000/£5,000 so your prices can change massively depending on what your priority is.
Alex: Yeah depending on what box effectively you tick so I suppose you’re offering more of a design service in that regard, you’re not sort of selling things off the back of the van you’re actually sort of leading people and actually designing for them.
Mark: Exactly, what we do, we aren’t selling boxes to people, we want to be as far away from that as possible. People appreciate the fact that you’re spending time with them because you know why would you not use somebody with the experience of 35 years, when you could go somewhere down the road say possibly you might have a young lad that’s designing kitchens that’s got 2 or 3 years’ experience. At the end of the day it’s a free service so why not use the experience of myself?
Alex: Absolutely that, and I suppose as with all these things you’ve got varying budgets and varying needs, how can you I suppose sensibly cut a corner, I mean people especially just on our kitchens, just for a moment, people sort of say well keep the shelves and you can change various aspects of it. Just sort of talk people through what you would advise if you’re trying to do things but more of a budget.
Mark: Right so, the obvious thing is like you just said, is to just put new doors on. The only trouble with that is if you just put new doors on you’re going back to a design that might have been 20 years old so chances are it’s not got drawers in it and things like that so space saving ideas, so by time you’ve just replaced the doors and you put drawers in you put in the pull out larders and you put all the gadgets in, you might as well have started from scratch. So, I always say the carcass is not the expensive part of the kitchen and I’m a big believer that if you can save money, I will you know but the way that I try and do that with my customers is like the worktops I was talking about, the type of door that they have. So, we’ve got all sorts of ways that we can keep the cost down on the doors. You can do a lot sort of joinery work and building work before we start, which can make it look really expensive but actually it’s not as expensive as having a full kitchen put in.
Alex: No, I bet it does, so some good thoughts there and I know everyone is sort of into the latest technology in the kitchen, you guys there evidently at the forefront of it but what are the things that are really striking a chord with people out there at the moment?
Mark: On the kitchens themselves as far as the appliances are concerned, AEG has just brought out their standard oven has a steam function in it which enables you to bake without burning while making bread or your cakes moist inside but not actually burning them, so it just adds another dimension to the cooking and that’s like an entry level service. There’s also when you’re watching MasterChef you’ll see they use a water bath sometimes and then they’ll use a vacuum packer, and that combination is called sous-vide cooking and that’s coming into the domestic market quite a lot now. So what you have is a steam oven, then you have a drawer below it, so the drawer below it is a vacuum packer and then you put say your piece of steak in there, a piece of fish and you put all your herbs in with it and it seal all the goodness into the actual meat or the fish and then you put it into a steam oven and it just comes out like you’ve just eaten restaurant food.
Alex: With this sort of technology Mark, am I going to see you on Bake Off with your perfectly risen, steamed sponge cake, or MasterChef, you’re going to take them all on?
Mark: I don’t think so, but I have been on enough courses trying to learn about it that I would be alright on it I think.
Alex: I’m coming round to yours for dinner. I know you do bathrooms as well, and from a buying perspective what do you need to look for when you’re looking to get the entire new bathroom or to make some changes. What would you advise?
Mark: Well you need to decide ideally before you start looking around for a bathroom whether you want a contemporary type of bathroom or traditional type of bathroom. There’s so many products out there it’s a bit of a minefield really. We’ve tended to pick sort of an entry level, which is a big book full of different products, then we have a higher end product brochure that we use. So, what we tend to tell our customers is to sort of give them an overall idea as to what we can do, put your different lighting in there, put glass shelves in there, so it’s not just about putting a toilet, a wash basin, a bath or a shower in there. Yeah, it’s just trying to make what can be quite a boring room into something a little bit more interesting. So, it’s all about the design rather than just selling a product. We put it onto cards, so people can see the different colours, what type of tiles they want to put in there and try and be a bit creative really.
Alex: So again, it’s all about as you said it’s the design element and not just selling things out of a box and just simply plumbing it in.
Alex: Just talk everyone through, I know you’ve just done this fairly big joint venture I suppose, with Express Bi-Fold Doors in Leeds and you’ve got a fairly impressive I suppose warehouse over there. Just talk everyone through what you’ve been up to.
Mark: Ok so the concept downstairs in our showroom in House of Harrogate had the express bi-folding doors, it had the lantern roof and it had the windows and we knew that concept worked. The owner of Express Bi-Folding doors is a friend of mine, we got to know each other over the last 2 or 3 years, he saw how the House of Harrogate worked and he was building a new showroom in Leeds anyway because they were relocating for Garforth and he has gone for it in a big way. He’s built three full size houses and what he’s done he’s brought myself in to do all the kitchens and the interiors, he’s got partners doing coving, he’s got people doing flooring, people doing resin driveways, doing the grass, doing the whole house experience.
Alex: So just so I’m clear, this is a giant warehouse and within that warehouse you guys have just gone and built three demonstration show homes basically within this warehouse, showing everything from the driveway through to the grass, through to the taps and the bathrooms that you’ve just discussed.
Mark: Exactly yeah.
Alex: Crikey, so yeah you better pop along to that and how did the launch go because that was only the other week wasn’t it?
Mark: Yeah really well, we had Phil Spencer down from Location, Location, Location, we had Dominic Littlewood and I invited down Lucy Parteger from Emmerdale, I did her kitchen last year for her. People were blown away by the whole kitchen showroom experience because it’s the only one in the UK, possibly Europe of this sort of size so it is a completely new concept.
Alex: Good grief, so it’s been an absolute pleasure to have Mark on the programme in that case, I’m looking forward to seeing what he’s got next for the Bake Off and MasterChef with his fancy tech behind the scenes. Now if anyone wants to pop buy sort of House of Harrogate or the new warehouse actually in Leeds, what’s the best way to get in touch with you?
Mark: I mean we’ve got both of them on the website, got all the locations there, you know exactly where, well in Harrogate we’re in the bottom end of town there and in Leeds we’re just off the ring road, just up from Elland Road down from the White Rose shopping centre. www.houseofharrogate.co.uk or www.expressinthehome.co.uk
Alex: There you go it’s been fascinating talking with you and thank you so much for coming in.
Mark: Thank you very much.
Alex: This month we’re discussing estate agent fees. Now we’d all like to think we’re getting a deal when it comes to this so when you nail an estate agent to the floor you feel great. However, is there another side to this story? By reducing the agents fee right down ask yourself is the agent is now motivated to sell your property for the most amount of money and to push that extra £5,000 or £10,000. No, of course they’re not, they just want your property straight off their books because every week your property remains unsold you are now costing the agent money and therefore they want to sell it quickly. My advice is to actually pay the agent the on the fence amount when it comes to fee, not excessively under or indeed over. In other words, something that is fair to both sides. By keeping your agent on side and motivated they will push a buy for that extra money. The alternative option is also to look at something like a staggered fee, so again you can ensure that motivation levels remain extremely high.
That’s all for this month from the Alex Goldstein Property Show. What a programme it’s been. If you really want some top expert advice, come to my educational talk at Leeds business week in mid-October were I’m speaking alongside none other than Price Waterhouse Cooper. It’s free and full details can be found on my website alexgoldstein.co.uk And don’t forget my new Saturday Yorkshire Post property column, which was out the other week and the full article is on my website too. The next episode is out on 1 November so make sure you tune in for that. Until next time.