When the internet came along a decade ago now it was predicted middle men , especially estate agents would be out of business. With the boom in the last couple of years they just mulitplied.

What are peoples thoughts on their future and business model? Are the british just generally too shy to talk directly to the vendor over price ? Can the percentage fee also survive or will it go fixed priced? Would prices really be a bit lower without the middle man?

As I have previously mentioned, I have a computer rentals business, and my biggest customer by far is a chain of independant estate agents - they rent nearly 60+ computers from me .

I can tell you that my EA is not going to dissapear,. I think the way EAs operate will change out of all recognition though.

My EA by 2006 will have tie ups with solicitors and surveyors so he can produce the HIPS (Home Information packs) that will be needed.

EAs will either have to be so small that they offer a one to one personal business selling exclusive properties or they will have to be technology rich with many automated processes.

There won't be any middle ground.

I couldn't agree less. EA's by in large have one income stream, which of course is solely dependant on the property market, more so sales than lettings. With the market starting to stagnate/fall - there can only be one outcome for a percentage of EA's. No amount of technology will save them if they do have enough strenghth in their balance sheets to weather the oncoming storm. Absolutely inevitable that a fair few will go to the wall.

I think with property being such a gravy train and the fact that any idiot could make a living from it we saw a boom in offices purely for prestige in an attempt to capture the limited supply of vendors. I think there will be EA middle men for many years to come....However

I do think we are going to see a massive cull of offices in the next 2 years. Supply is now plentiful so EA's don't need to compete for instructions but transactions (commisions) are low. If agents can't maintain turnover they will have to manage costs.

I think prospective purchasers are very comfortable using internet for property searches. The internet is an excellent low cost marketing medium for real estate and offers good search capabilities (price, type, location, size etc). With internet broadband (virtual tours) now common, people will rely less and less on agents with plush offices, newspaper advertising and mailshots for house hunting.

In summary EA number will decline, their jobs will evolve but they will be around for a bit longer yet. IMO

That was my intended point, an EA must have a multiple income stream.

There is no middle ground.

The EA I do business with has -

Estate Agency - multiple offices
Has a selling website
Acts in selling new properties
does commercial valuations.
Has a lettings agency
Has interests in a mortgage company
Is setting up a business to produce HIPS reports.

All of these activities need a big reliance on technology.

Derek,

What 'multiple income stream'????

They sell houses or they go bust. Is it that hard to work out?

remember this:

http://www.timesonline.co.uk/article/0,,5-1276847,00.html

And another rate rise looks a certainty....

Invest a little time on nethouseprices and you can work out how bad their current turnover is. In my London suburb agents are selling literally two or three a month. Fact.

i see EAs travelling to viewings on an eliptical hovering travel disk.

on each EAs arm is a built in Cyber-Valuer. A price indicater which is genetically implanted into the EA and is powered by the EAs heart rythms.

each EA will have amplified hearing with an internal heads up display projected on the inside of the cornea as well as internal laser rage finder pod attached to the spinal column.

EAs of the future would lose the little toe on each foot, with scales replacing skin on face.

each EA is encased in a titanium protective bath to help absorb damage from anti aircraft hits. also all internal systems have 3 fail safe measures and fly by wire is backed up by 3 redundant systems. GPS is an option.

the average travel speed for an EA would increase from 5-7mph right up to mach II as they may reach the moon for valuations in the future.

EAs will lose all sexual identity and gender characteristics, prefering androgen uptake and reproductive inhibitors. Reproduction is now attained through a series of dish-based hybrid adaptations from the EAs previous DNA strands.

The EA of the future will no longer consume carbs or sugars for energy. The EA of the future will run from a cadmium 9 hour rechargeable battery pack inserted into the 240v anus docking charging module bay.

.

They're like prostitutes. They have been, and will be, with us forever.

I hope they become regulated, not in a voluntary code of practise as today!
So if they break any of the standards to bring their profession into disrepute
they could be dragged by their ankles by car around the streets and
publicly flogged at half-time football matches!

The EA businesses generally want to be regulated as well, however the government flunked that decision a few weeks ago.

The NAEA (voluntary) do a reasonable job, however as you know not all EAs belong to it

I'm sure that's right, but this diversity is a bit worrying, in the same way that the current meeting of constitutionally seperate powers between the UK executive and judiciary is worrying. In America, it is becoming a National Scandal that Valuers and Surveyors are so closely linked to EA's that valuers who give correct valuations are dropped in favour of those who over-value.

In the 1990's the close link between so-called "independent" financial advisors and EA's partly gave rise to the mis-selling of Endowments. The continuing links between building societies and EA chains is not in the public interest and the continued growth of "all-in" house buying packages, where the agent, lender, advisors, surveyors and other VI's are all affiliated is inevitably leading to extremely unhealthy Virtual Cartels.

I would never do business with any agent, in any field of business, having close ties with another functionary whose association compromised that agent's ability to do his fundamental job: to represent the interests of his client.

VP

USED CARS...

will need to be sold to cover the shortfalls in BTL cashflows

The Ea industry has always been very cyclical.....and still is......

Vacant Possession, you are right about the concern of the 'closeness' between EA valuers and surveyors and even solicitors

However thats the way its going to have to be, if these HIPS reports are to be reasonably priced.

These reports will stop time wasters with no intention of selling their property from putting it on the market, as its going to cost them £600 to do so.

I am an Internet Consultant and here is my two cents:

1. Since the figures came out that Internet sales soared last Christmas there has been a sudden and sharp demand for people with expertise in designing and implementing 'big' Internet E-commerce portals. I have no doubt that lots of businesses have just woken up to the 'power of the Internet'.

2. Several years back, prior to any of the major Internet EA sites existing, a software developer friend of mine developed a ruddy superb system for EAs. He then touted it round endless EA chains in South Wales and the South West. None were interested.

However, this allowed him to see first hand the EA business 'inside' and he could not believe just how inefficient and old-fashioned their business practices. A good example is an EA chain, and this is typical, that might have 10 or 20 sales offices in the different suburbs of a city but each office ONLY has houses for sale there from the suburb it is in.

So, if you are interested in houses 2 or 3 miles away you have to get in your car and drive to that suburb's office. It is completely barking and you can't think of any other business that would be so badly organised in this way. Apart from anything it simply cannot be cost effective to run all these offices and maintain them all with staff, maintenance bills, etc.

I suspect it is partly to do with the commission basis that EAs work on but, I imagine, the first change we will see in EAs come the bust is a rationalisation of having numerous offices into just one, perhaps two, main offices.

Long-term, with eBay being the killer 'app' that has got people using the Internet for shopping, I think that more and more people are now becoming acustomed to using the Internet for all sorts of purposes. The day of the branch EA is not about to end tomorrow but I think this bubble will be their last.

Well,they're both on the backs and about to get shafted,but I reckon that the prostitutes are going to make more money than EAs this year!!

Wearing my we created Rightmove hat, EA are really poorly run businesses with very fixed costs so either massive profitability or unavoidable loses. As an example of this we started talking to Countrywide and Halifax about the idea in 1995. I think in all the time I spent dealing with setting up Rightmove there was only four things that estate agents claimed to do/ provide that people want them to do.

The current market is based on the multiple bites of the cherry approach while doing as little as possible. I'm not going to say anymore however as I do plan on reentering this market when the time is right.

Watching these TV progs of people buying properties overseas it seems, particularly in the US and in Oz, that other EAs seem to offer a better, more professional service than many UK EAs.

Frankly, I would imagine that I could, with no background in the EA business, offer a more professional service to UK sellers and buyers. Surely it can't be that hard to actually treat people as your valued customers, answer their calls and be fair to them?

Ebay actually proves that Britain is a nation of shopkeepers. A fairly bad one at times as well as the £1800 laptop that I'm typing this on (bought for less than £1000 within two weeks of sony releasing them shows).

You have to remember that the customer pays for it tho. UK estate agency fees are low compared to elsewhere. Granted they are higher then they should be but they are far lower then US and Australian rates let only continental Europe.

A lot of people can't be bothered organising viewers or are just too busy to be there to show people round. When you consider the size of the fee can end up being the price of a small car its surprising.

That's a good point. Wonder when the bargains will be coming - I'm in the market for something now.

I have had a similar experience. They are, by and large, right dipsticks. They are 'trained' to use an appointment book and a card index - anything else is beyond them. There is some good software for agents - they are too thick to use it. And, as for networking offices, so they can share resources and info - iven with the internet making networking cheap - they still can't see it.

They will end up as single offices though - they can't afford to keep 9 offices open when 1 will do. How many people now visit an agents when they want a property. They use the internet to search and register. The high street office will soon be a thing of the past.

Frankly, I do not see what skills, if any, they have.

All they appear to need to do is:

1. Open an office.
2. Get people to use them as their 'agents' and advertise in local rag.
3. Wait for buyer to turn up at said office and ask to be shown around.
4. Wait for offer/Chase offer
5. Ensure that the sale proceeds smoothly.

I personally see a BIG lack of professionalism that I would expect in such a business. EAs seem very good at telling you the size of the rooms or how big the garden is but I have yet to meet one that knows a combi from a condenser boiler, can tell me what quality of insulation is in the walls, what standard of electrical fittings are throughout the property and a 101 other things that I would expect an EA to know.

Having said that, the quality of salesman in the UK is pretty dire. I was in a Toyota dealership in Cardiff last week and the saleslady talkign to me had no idea whether the wing mirrors on the Toyota Avensis were retractable or not. I mean, you have half a dozen makes of car and all you have to do is memorise the specs but that in itself appeared to have been too difficult.

I never saw a prediction that EAs would be out of business because of the internet... however..

From the dot com boom, its clear just having a website isn't enough to sell.. a recognized name and background is also needed.

They have multiplied.. 2002 (way after the internet started) there were 12,000... today there are nearly 16,000... hence me doing the monthly Estate Agent Index.. because I suspect the model of business



Personally I think today EA's fall into 2 major categories;

1) Those that have been around awhile (enough to see the last crash)
2) Those that haven't.

IMHO there have been a lot of new single office or small chain EA's opening over the past few years. Probably working on the principle that why invest in housing.. lets just take 1.5% of a sale instead.. its actually a better business model (compared to doing referb or btl).. no stamp duty to pay, no interest payments whlist they do up the property, a higher turn over of properties in a rising market etc..

Those EA's that worked on that princple will probably close.. as will some of the longterm EA's.. I'd place money on the number of EAs being near 10,000 (37% drop) in a few years.

There is also a secondary category...

1) Those that have a rentals department that both tenants and landlords trust
2) Those that don't

Those which have a good sustainable rentals have a better chance of survival. Its not guarenteed tho, if interest rates increase recent BTL will try and maximise they income.. first to go (after trying to let at a higher rent).. will the the EA.. rather than pay say 10-15%, they will go it alone (perhaps using the EA only to get tenants)



Its actually the other way around, the EA is working on the vendors behalf! So surely most vendors are too afriad sell themselves.. because they need to get the best price.



The model I like (and will never happen) is.. you want to sell your house.. so you sell it to an EA.. the EA adds their commision.. the buyer buys from the EA. The reason I like it is in a rising market is much the same as the current system.. in a falling market there is a lot more pressure on the seller to drop prices.

Unfortunately there will always be a middle man.. biggest investment of your life.. most people like to be lead by the hand.

However as EA's become desparate for volumes of sales.. commisions should drop a lot.. and when sales rise again to will commisions! It will never be fixed price.. some one will always want to undercut to get the volume of sales.

I know one particular EA chain who send out people to 'value' properties when the person has had *no* training in what to do, I'm talking about people who have been in the job a few months with no prior experience of anything property related - they are told to lookup prices of nearby properties on rightmove and price accordingly - giving or taking according to how nice the decorating/kitchen/bathroom is.
Quite shabby really, the 'valuation' exercise is purely to get some pics and dimensional data - the pricing is barely related to the property in question - it's literally a number from a hat ("Computer says no")
Is this common practice among EAs? There must be some of you who are/know EAs ?

Does anyone know what sort of money an EA earns? It would be interesting to know.

Just go to a job search website and look for EA jobs - will give you a pretty good idea

Office juniors earn a pittence. For those with experience I understand it's generaly quite a low basic (some even forgo basic) and made up through commision. In recent years a good agent in a prosperous area could clear £60K.....things are going to be really tight for agents now with low volumes and loads of them fighting over the scraps like vultures.

I just wouldn't want to be an agent in the comming months.

Yeah, I thought that was the sort of money. What a complete joke. It seems to me the only professional input required in the whole buying/selling process is the surveyor who surveys the property and the solicitor who ties up the legal side. EA's are really nothing more than administrators. Their key skills don't stretch beyond the ability to walk, talk, use a telephone, measure a room and drive a car.

Found this on the web...but it's for 2000:

The median annual earnings of UK salaried estate agents, including commission, in 2000 were £28,020. The middle 50 percent earned between £19,060 and £46,360 a year. The lowest 10 percent earned less than £13,800 and the highest 10 percent earned more than £83,330 a year.

It's just plain wong isn't it? My sister is a midwife. Last time we talked salaries was a year ago when she was on just over 18k pa.

If she screws up at work there's the very real chance two lives could be lost.

And then there's estate agents....

..And they wonder why they are disliked?

I didn't realise it was quite that much. And to think they haven't even really had to work for that money in the last four years. Speculative buying and the property feeding frenzy has done all the real work for them.

I have an an estate agent acquaintance...Spoke to her last year. She drives a really flashy car...can't remember what it was ( I have absolutely no interest in cars...I cycle as much as I can). Anyway, I says to her "nice car you've got" making pleasantries and all. She says "Yes I KNOW it is a nice car" in a really arrogant way..It spoke volumes for her. She then in the course of another conversation tells me she will be undertaking a course of botox - VANITY and GREED - an incendiary mix. Estate Agents?...Let them all ROT, let them ALL go to the wall. Has anyone here ever met an Estate Agent who actually puts YOU first rather than them..anyone who has is a liar..

"Having said that, the quality of salesman in the UK is pretty dire".

PC World or Dixons sales people are pretty good though.....not

typically £700-800 per month basic + 10% of fees generated. A good agent can earn over 50k. But the big money (and big risk) is actually owing an agency.

EAs deserve all they get in the coming months.

They have few skills (even inter-personal skills) and have made more money than they deserve in the last few years....

They'd better hope they've saved some money during the 'easy years'.... whats that... they've spent it all on flash cars and over-priced property... oh dear.

The Dude,

Has anyone here ever met an Estate Agent who actually puts YOU first rather than them..anyone who has is a liar..

Strangely enough I have, owned-named non-chain small agency. Looks like he has retired the shop is gone and no adverts int he paper the last couple of months. Last conversion including a long rant on high prices causing all sorts of problems for family life/the young and debt - not by me, but as a result of a query about sustainability of pricing. Maybe he felt stiffed himself because his own children were up the creek without a paddle, who knows?

Ea salary for q2 04 =astronomical.
Ea salary for q2 05 =GIRO!!!!!!!!!!!!!!!!!!!!!

I'm lovin it!

I was a temp in an E/A when I were a boy and I wouldnt / couldnt do the job.

You need very thick skin and a level head - those prone to worry usually dont make it. The sucesfull ones were very intense people who focused on pestering potential people all day and often night. They were in a constant state of combat inherent in the role. Vendors want evrything yesterday / buyers have a different agenda / wasters put homes on market year after year but never move.

The worse bit was spending months on some tosser who then glibly pulled out.
Its a very insecure job and fosters paranoia by the bucket load. E/As develop a 'them and us fortress E/A culture' very quickly, similar to Police officers.

You also deal with tons of nutters and timewasters which is why I beleive E/As develop a hostile abrupt attitude very quickly.
I recall morning meetings were the valuers descibed Vendors who wanted ott price cause 'my house is best in road'. This is very common and frustrating as E/A doesnt get paid unless stock sells.

As an E/A you always upset one party and can never win. You are dealing with people undertaking a stressful life event.

Dont get me wrong I dislike the buggars, but its a far far harder job to stick at than you can imagine.

Of course being a midwife / fireman has pressure but its not the same kind of relentless minute to minute never ending presure (must sell, climb the same old mountain every month or my kids dont eat). Firemen and midwives have bo shortage of willing applicants.

To be honest its not as easy as some might imagine, but its no way as difficult as being a nurse,doctor,fireman....

That isn't fair.










Some of us don't like football and would miss half the fun.

To do it well is not easy.

A pity so few do it well.

By the same token, being a door to door double glazing salesman is (or rather was, because you don't see many around nowadays) probably extremely stressful and emotionally unrewarding, what with all the "get lost sonny" and "sod off" replies to each door knock, but that doesn't mean being a double glazing salesman is an honourable profession.

The problem with Estate Agency is that it is essentially an unnecessary middle man non job masquerading as "respectable". If everyone just ignored them and dealt/advertised/functioned direct they would mostly go to the wall. It is our absurdly dated and anachronistic way of buying and selling homes that encourages the EA's to exist. In many other spheres of comparable commercial activity the middle man is out of a job.

I have no doubt that EA's work hard. It's not their hard work I object to....it's their belief that they are doing anything vaguely useful that I find difficult to understand.

Never mind England being a nation of shopkeepers - it is a nation of middle men, producing nothing, creating nothing, servicing nothing, except a great deal of waste paper.

VP

I'm not sure many of us actually work for organisations that give us the moral high ground.

Fair point, except that EA's do (as we know) talk up the market. That shifts the ground a little.

VP

maybe that's because we are totally unregulated.

Who doesn't talk up whatever they are flogging? Its called sales. Everyone seems to put a spin on things these days. Buyer beware for everything now days.