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Paul Smith

April 2010

Why estate agents are needed – even in the online world

Every so often something new happens in the world of estate agency that sets the jungle drums beating. In our case, it is the launch of iSold.com, our new estate agency, in association with Tesco.

The consumer media have rightly understood that there needs to be far greater choice for sellers in how their property is marketed in this internet-savvy age, a point underpinned by the recent OFT report into estate agency.

At iSold.com, this is something which we have been working towards. Our properties are being advertised on all the major property portals plus we’re offering sellers a choice over whether they have a virtual tour, unlimited photos, a Rightmove Premium listing, local newspaper advertising and Open House viewings, from a menu that suits their budget and requirements.

We have no intention of replacing what is already on offer on the high street, instead providing a clear alternative to people by combining locally-based valuers on the ground with an online offering, backed up by a centralised Branch Team.

We’ve seen a number of internet agencies falling by the wayside recently because they’ve cut out the estate agent completely to reduce costs. But cheap doesn’t work in agency online or traditional; sellers want both service and the best price for their property, and know they have a much greater chance of selling if estate agents are involved.

No doubt there will be detractors who will knock us for aiming to be innovative, but we see it as a way of complementing our existing services, not replacing them.

In the words of 19th century American author Mark Twain: "Keep away from people who try to belittle your ambitions. Small people always do that, but the really great make you feel that you, too, can become great."

Don’t sell yourselves short

We seem to have entered the era of supermarket sales in estate agency as everyone vies for market share – buy one HIP, get your conveyancing free; all costs paid for up front and no charge; we’ll cover your stamp duty costs or pay your mortgage application fees.

But the truth is that someone has to pay somewhere – and it’s not only the hapless customer who hasn’t read the small print and realises the costs are buried in another aspect of the transaction but the estate agents who are undermining not only themselves but the rest of the profession.

The reality is that if you sell yourself short and offer freebies to lure in customers, your local area rivals will follow suit – and then you are in a situation where no-one has a competitive advantage – or any profitability either. And the only way to go after that is out of business.

I have long urged estate agents to charge what they are worth. If we want others to respect the professional service we provide, we need to start by respecting ourselves. That doesn’t mean that there cannot be the occasional special offer - like lower fees when starting up to get properties on your books - but really think about whether or not you can sustain this approach long term.

Agents have to be very careful not to mislead the public; after all, your fees have got to come from somewhere. It’s a false economy and unsustainable if you don’t charge what you are worth. If we’re all so good at valuing other people’s property, whey can’t we value ourselves properly first?

Why investment in new housing must continue

Spring has at last arrived, the daffodils are out – but there’s still a high level of uncertainty within the economy. Forecasters are warning we could tumble back into a recession, which could have serious ramifications for both the estate agency sector and the construction industry.

The uncertainty about the scale of public sector cutbacks required will  inevitably curb the appetite for investment in both public and private sector housing – something which will have serious long-term repercussions for the country as a whole.

According to the National Housing Federation, volumes of new homes have hit their lowest levels for 87 years in England and Wales, with just 122,000 new properties built during the past year.

The Office of National Statistics has also revealed that private housing orders fell by 27% in 2009. 

However, there was some light in the gloom, with orders up 41 per cent in the three months to December 2009, compared with the previous three months, and up 20 per cent compared with the same period a year ago.

House builders have been propped up by housing associations, building over 45,000 homes in England during the past year – a welcome respite as they wait for private sector confidence to continue its shaky steps to recovery.

But if builders think the public purse will keep them afloat during the coming months, they should think again. The Chancellor has a huge fiscal black hole that needs filling and public sector spending will inevitably be slashed in order to balance the books – whichever party is in power after the General Election.

This means that construction right across the board – whether new hospitals, infrastructure, schools or houses – will be an easy target, alongside the legions of civil servants running public services who face losing their jobs.

Our industries must unite to fight any reduction in house-building, whether private or public sector. The last thing we need is a serious property shortage, which will trigger rising prices and a return to the cycle of boom and bust.