Proptech Weekly #50 — The Ghosts of Estate Agents Past, Present and Future

Friends, Feudal Landlords, Commoners,

It’s been a year many of us will never forget. But will we take the current lessons forward? Were we listening, or did we descend into (re)moaning?

Reading the comments under Property Industry Eye news articles reminds me of the story of Scrooge — he who ignored all around him and could see no further than his own selfishness.

In the aftermath of the EU Referendum, I remember being shocked at two facts: that people were surprised a Euro-skeptic population voted to leave the EU; and that there was a complete vacuum of leadership and/or ideas of what to do next.

And then I remembered some sage advice: Be the change, so change doesn’t happen to you.

The signs for estate agency have been there for a while: consistently one of the least trusted professions, countless attempts by politicians to ‘protect consumers’ and of course the rise of the anti-agent rhetoric of online agents.

So in the spirit of Christmas, we welcome a visit to the proverbial mirror:

Enter Foxtons, the Ghost of Estate Agents past.

The firm famous for hiring people young, training and managing them military style and burning them out on the phones to play ‘the numbers game’ and win new business.

Foxtons knew they could annoy everybody who interacted with them, as there’s always more people out there unawares.

They were quickly one of the most profitable agents, and certainly the most visible — they also became the poster-agent for all that was wrong in the industry; and were consistently on the wrong end of legal action from their clients.

When other agents looked at Foxtons, they saw the bad kid in the playground and would say, “it wasn’t me Miss, it was Foxtons” as they unwittingly were influenced by the ‘cool’ kid and copied them.

Overvaluing to win business, charging new-fangled and completely unjustifiable ‘administration’ fees to tenants and tagging on service charges on top of work for landlords who were already paying a management fee. And they indignantly forget the wrongs they perpetrated on tenant deposits until legislation was introduced to put a stop to a very evil practice.

Their collective response: everyone’s doing it, so it must be ok.

But this wasn’t the worst of the behaviour: many agents would answer a call from a potential vendor and without much chivvying would undermine their fee: “we usually charge 2% + VAT but if you sign today we’ll happily take on your property for less.”

Now replace vendor with buyer and fees with asking price. It happens. All. The. Time.

The Ghost of Estate Agents Past drifts away without a further word, leaving the viewer seething with indignant rage at being slighted so.

It gets worse.

Enter Purplebricks, the Ghost of Estate Agents Present

The best in class of the current breed of ‘new’ agents have dismissed the high street offices, chucked their fees out of the window and yet largely kept the dodgy suits. Go figure.

Having not learned the lessons of Agents Past, Purplebricks repeats the tricks of the trade: promise the world, deliver as little as possible and own up to nothing.

In a world where increasingly information is freely available, Purplebricks refuse to confirm how many properties they actually sell.

Why does this matter? Unlike their predecessors, Purplebricks charge up-front and don’t even pretend to do the work: they leave it to the customer.

Like their technology, they must be so embarrassed so they obsfucate the details as best they can; much like their ‘profit’ being an accounting quirk for PR purposes (see what we did there…).

Lack of transparency continues to be the sin of Estate Agents Past and Present. Statistics to distract from the truth are no different to ‘Local’ Property Experts who are based tens of miles away.

But as the Ghost of Estate Agents Present vanishes, hope appears:

A beam of light tantalises as the Ghost of Agents Future flashes on your smartphone screen.

For argument’s sake, let’s call this Ghost Glenn Ackroyd.

Glenn understood that technology would be best served in the hands of trained and motivated franchisees. An army of them.

While very much dorky in his current adolescence, Glenn builds technology that empowers everyday people to transparently sell property.

Glenn looks around the world for best practice, bringing the most choice nuggets home and wrapping them in technology: like auctions where the vendor has a chance of getting the best price for their home in a predictable timeframe — just like they do in Australia.

But most importantly, Glenn’s agents tell the truth. About everything. Their fees, what your home is worth, and how long it’ll likely take to sell.

You see, Glenn gives his agents data to better serve their customers.

Glenns cares about his agents, which is why his agents care about their customers.

There’s much more to come from Glenn, as he settles into his new home at Martin & Co.

If he’s listening, in the absence of Coca Cola’s Santa would Glenn please deliver us from the actual problems people face when buying and selling property. Just liked Nested are doing with Chains, Viewber are doing with convenience and Fixflo are doing with communication. Thanks very much.