With the current difficulties in the residential property sector, there will always be a knock-on effect in estate agency. In addition to lost revenue due to reduced sales volumes, they also face challenges within their ranks as entrepreneurial property professionals take advantage of market conditions. The time is right for introducing new business models to the arena. One such business is www.onelondonproperty.com
The real difficulty will come with the increasing success of the alternative property selling methods being publicised through the social network channels; with no ‘loyalty’ expected from the consumer (in fact, many will actively seek any alternative to that of an industry which is held in negative regard by the all-important customer) they will really have their work cut out in retaining and attracting prospective clients who will no doubt take to voting with their feet.
In addition many of the reasons given by estate agents justifying their existence and continued instructions are being countered, by the intelligent use of technology (and the way in which it is made easily available) and systems that negate the need for expensive overheads such as High Street offices. The new options for selling a property claiming to pass cost-savings on to sellers puts the onus really on estate agents to make their case for being in business very loud and clear .It is inevitable that further casualties within the industry will become commonplace.
Online Agents and Private Sale or For Sale by Owner (FSBO) websites are not new but they are well-placed to benefit from the cost considerations of sellers who are unable to accept the estate agent’s excessive commission as a necessary evil. If a seller is looking to purchase another similarly priced property, the average cost of moving will be in the region of £22,000 once Stamp Duty and legal expenses are included.
The combined fact that lenders have tightened requirements and falling property values means sellers must consider alternatives to conventional estate agents for selling property. There are an increasing number of players in the market offering a variety and range of services that will certainly make the less-conventional but arguably no less effective options hugely attractive.
Perhaps the most important outcome in all of this is that consumers will face a wider variety of choice which will no doubt ensure that the cost and value of the services they wish to use will decrease .The reputable, professional businesses that provide excellent service and value for money, whether conventional estate agents, online agents and/or private sales websites will continue to thrive, while those that don’t will find it increasingly difficult to survive or prosper in an increasingly competitive marketplace. They will be forced to either improve or lose their business.
In summary, there will always be a place for all of the different business models offering a variety of methods for selling a property. Whether it is because people are cash-rich and time-poor, do not have the confidence or simply feel that the conventional estate agent route provides the best option given their circumstances. The businesses that give their clients what they want and, more importantly, what they are lead to believe they are paying for, will continue to succeed.
Given all of the above, everything looks very rosy for the all-important customer and that can only be in the best long-term interest of the industry as a whole.
Having said all that people always prefer to deal with people and the services of a professional, client-focussed estate agent can be invaluable when selling a property and going through what for many will be the most stressful and emotional period of their lives.
I will shortly comment in part 5 on the on-line preoperty portals where you can sell your property yourself without the need of an agent and what you must consider in deciding to go down this route