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Traditional Estate Agencies – Reinstate The Gatekeeper!

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Twenty years ago before the arrival of mainstream internet use and the birth of property search portals, traditional estate agencies were the gatekeepers to the realm of property sales. They were the custodians of local historical data relating to house price transactions, and they knew which properties were coming to market, which areas were popular, what properties were selling and at what price.

Years ago, in order for buyers to access the ‘property market’ they would need to call in, or pass the agency office window, or await the newspaper on a Thursday evening to read the local agents’ advertisements. The only way people could have access before everyone else was if they registered with various agencies to receive details before they would be included in the local paper. Meanwhile, sellers had little choice other than to hire an agency to advertise their home, or try advertising by themselves with a handmade for-sale board or personally commissioned advertisements. These were the halcyon days, when traditional agencies were the gatekeepers to the property market.

Fast forward into today’s world, and the traditional agency gatekeeper position has been stripped away by technology. Now, local sales data is available to customers at the touch of a button as are a myriad of property listings. All the while traditional agencies morph into nothing more than an online call centre with professional services looking like a DIY marketing model. Likewise, search portals have replaced the local newspaper and are now seen as indispensable by agents and vendors alike, but are those portals really that helpful?
The knee jerk answer would be ‘yes, of course,’ considering these online portals collect 180 million monthly visits, produce bucket loads of sales leads, and a handful of instruction leads. Not to mention valuable market trend data, and property details available to be viewed by anyone from anywhere in the world, anytime. To me, it sounds like a pretty ‘indispensable’ entity, doesn’t it?
HOWEVER, if we take a closer look at what these portals actually achieve, the answer is far less compelling.

Firstly, these portals do not increase the overall size of the property market; they merely provide a convenient place for most properties to be gathered together for the convenience of a prospective buyer! In fact, when Rightmove was born in 2000, property sales numbered 1.3 million, and in 2017 sales numbered an unimpressive 1 million.

Secondly, they do not demonstrably reduce the average time period from ‘Sale’ to ‘SSTC’ (sale subject to contract). They only provide the vendor a marginal chance of finding a buyer sooner through the convenience of a one-stop search facility. In practise, they actually reduce buyer intrigue, providing too much information (photos) and likely discourage more viewings than they encourage.

There has to be more, right? Well actually, no!

You see, search portals only benefit prospective buyers. They make it easy for them to compare and contrast properties and prices. While this data is valuable to the buyer, it conversely plays to the detriment of the vendor and their agent, especially when negotiating an offer price.

Even worse for the agent, these portals reduce their professional status in the eyes of vendors. With a one-stop shop for all listings, there isn’t much marketing differentiation for the agent to capitalise on – sales become a simple numbers game. Load it onto Rightmove, sit in office, await enquiries – job done!

The quantity of sales leads over the quality leaves agents in the hamster wheel effect – following up on more leads but selling no more properties, working harder for less. Meanwhile there are ever increasing portal fees, excess of costs, and, to add insult to injury, agent’s data being sold to competitors online or otherwise.

So how did estate agencies find themselves in this dreary position?

Prior to the internet, competition for new instruction was a battle that agencies fought by having the widest/largest list of registered buyers coupled with the largest advertising budget in the local newspaper. Therefore, following this logic, a larger/wider audience was always desirable; but as any auctioneer will tell you, it is not the quantity of people you have in the room, but the quality that counts. Two interested bidders for the same property outstrips one interested bidder and a roomful of on-lookers!

Unfortunately, estate agencies and the public have both bought into the flawed ‘logic’ that a bigger audience is better. Consequently, they are now either insistent upon being on a portal or scared not to be on one! Making it an ‘indispensable’, expensive sales tool every agent ‘needs’.

Nevertheless, an innovative solution is around the corner and arriving soon. And this time, we repurposed technology to help traditional agents regain their lost position of gatekeeper. It’s name? Mutual Off-Market.

Max Fuller is the Creator and Founder of Mutual Pre-Portal Property Platform