Does Property Experience Count for Nothing?
Another day, another ‘disruptor’
Every week, there seems to be a new challenger and self proclaimed ‘disruptor’ having a pop at the estate agency sector, bringing their new sparkling product to the market, that claims to be the answer we have all been looking for. Whether it’s a new property search portal with greater in-depth analysis, digital online estate agency or some money saving offering that we apparently can’t live without. Yet these new kids on the block with questionable property experience seem to fail with alarming regularity – why?
Just trust the computer algorithm
They frequently argue that one doesn’t need property specific experience to sell a home. You just need a sales background, their computer algorithm or offer a cheap fee and the world will take care of the rest. Experience in the property sector counts for nothing in their eyes – so my last 20 years in the sector may have counted for nothing?
The value in expertise, foresight and skill
You see these types of business miss what property is about – and that is people and emotions.
To really understand all these idiosyncratic nuances, overcome highly stressful situations involving significant amounts of money, whilst getting the very best out of people all at the same time, there is no substitute for hard earnt time at the estate agency coal face. This will mean you can often resolve issues before they even become a problem, as you have the expertise, foresight and skills to do this. As I have always said, getting to Under Offer is the easy bit. Under Offer to Exchange of Contracts is the really hard part.
I feel property is one of the most bizarre and specialist business sectors the UK has to offer and I can understand why those without the industry experience, feel that they can shake things up with a new offering. However what they forget is that property doesn’t work off human or computer logic and straight line thinking – emotions and stress throw all of that out the window.
Property is all about the unaccounted for, the left-field options and the irrational choices. You can’t ask a computer to overlay some new-fangled algorithm to account for human emotion. Or if your digital estate agency offers cheap due to corner-cutting technology, it can’t be your sole differentiator in the market.
Case in point
Countrywide was one of the UK’s largest estate agency groups, which appointed Alison Platt as their CEO in 2014. What followed was a well documented disaster bringing the company to its knees. The turfing out of experienced agency board members to be replaced by those with retail backgrounds like the CEO’s. The focus changed from a people business to a retail one. The results were dramatic where the share price dropped by 90% and the company latterly was then purchased by the Connells Group.
One can then take notes from arguably the most high profile digital estate agency in the form of Purplebricks. When they launched, they got many in the industry to sit up and pay attention. As a result, established estate agents upped their game, which was no bad thing. However since then, the Purplebricks cheap fee, computer based offering hasn’t worked and they lost market share in the last few years, where traditional agencies gained ground. Their latest financial results says it all with a whopping £42m loss.
Property specific experience (like other business sectors) is evidently key to a businesses success. Some of the longest established estate agents in the country can date their roots back to the 1800’s and some back even to the 1700’s. Interestingly, they’re still in business as they get what drives the property market having evolved with the times.
Yet there is arguably a darker, ethical and legal side to all of this. You see, if you are an estate agent focussed on being cheap, having a side-line in referral fees, being a negotiator on 100% commission or led by computer algorithms, then this often means you need to get a client off your books promptly and to have mass volume transactions. My question to them – ‘is this really looking in your clients’ best interests’? I’ll let you be the judge…