BrightSale - Estate Agency 2.0

A Big Announcement From BrightSale

2008-10-27T03:28:00.000-07:00

Today, we have formally announced a landmark deal between BrightSale and the highly regarded traditional estate agency Thornley Groves.

The purchase of 25% of BrightSale by Thornley Groves represents a major step forward for BrightSale and UK estate agency as a whole. We believe it firmly cements BrightSale's position as the UK's leading online estate agent and opens up our unique service and platform to many new customers.

To read the full release and see more details, visit our press section.

Are Estate Agency Fees Rising or Falling? – We are Confused

2008-10-23T02:35:00.000-07:00

We are confused - and we don’t mean a super-annoying car insurance advert. We are confused because for about a year now we have been assured that high street estate agency fees have been rising. The story has been that it is much harder to sell properties at the moment (which can hardly be doubted) and that estate agents are now having to work much harder (bless them) and therefore the general public are only too happy to pay higher fees for the service. It is the last point that has always struck us as a little odd. We know that in the early 1990s house price recession agents’ fees did go up. In some well-heeled areas we know that some agents even got away with charging a ‘registration fee’ of up to £500 just to list a property, and then up to 3% commission on top of that. But times have changed a great deal since then. Competition from lower cost modern agencies such as BrightSale have changed the competitive landscape – and have surely made it much harder for high street agents to simply raise prices in the face of falling demand (which is all they are doing).

So it was almost with a sense of relief that we read yesterday of the major London agent Lauristons offering customers a chance to opt out of the traditional 2-3% (this is London remember) fee in return for a non-refundable up-front payment of £999. To us this looks like a desperate attempt to get some, ANY, cash flow into their business before the year end. If you cannot make money actually selling properties, try to make it by listing them instead.

But isn’t this just another sign of a business model that simply doesn’t work anymore? Most vendors in these hard pressed times are not going to be happy forking over £1,000 in cash with no guarantee whatsoever that a sale will be achieved. So although Lauristons’ move certainly worked as a PR stunt, it will do nothing to address the fundamental problems of traditional agency: bloated costs, ineffective technology, poor client service, excessive fees etc. But as the Director of the company concerned said: “the market is changing and the current economic climate means it probably won’t be the same in the future.” Amen to that!

RightMove Stands Defiant on Agents’ Fees

2008-10-22T03:18:00.000-07:00

In a communication to all its members last night, RightMove effectively rejected calls for it to reduce its fees or to move to a different form of charging (per property rather than per branch). The company’s argument appears to remain that estate agents should reduce their print advertising budgets instead. The other major change is a reduction in focus on overseas property – which we were aware RightMove was already struggling with. To us this looks like another clear indication that the British public’s previous rush (we might call it the Place in the Sun stampede) into overseas property is slowing abruptly.

What agents make of RightMove’s decision to tough it out on fees will be interesting to see. Many have threatened to leave the portal (as many as 75% according to a recent poll). By sending this communication RightMove appears to be calling the bluff (if it is one) of those agents, and effectively daring them to try to survive with them. We will see how many put their listings where their mouths are and leave! To quote Margaret Thatcher, RightMove is clearly ‘not for turning’.

What Does RightMove’s October Survey REALLY Tell us about the State of the Market?

2008-10-20T08:55:00.000-07:00

A lot of estate agents will probably have had the same response that we did to the news that sellers INCREASED their asking prices in October (by 1% over September): i.e. Are You KIDDING?? The explanation RightMove gives for this seeming anomaly in the current difficult market is that if a seller knows he is going to chipped away on price he (and his agent) might as well start with the highest number possible! As we all know, and RightMove rightly points out, this is patent nonsense. Over-pricing can lead to the property not being seen at all by the right buyers. A buyer looking for (say) a 2 bedroom city centre flat will often have a very tight price range in mind (especially at the moment). This price range (say £160,000-170,000) will form the basis of all that buyer’s saved website searches. They will only receive notifications when property listed in this range appears on the market. This means that the misguided seller listing at £190,000 with a view to accepting £165,000 will not appear on the radar screens of the very buyers he/she is really targeting. Madness.

But there is another, more intriguing, explanation for RightMove’s October result. Because all RightMove does (we believe) in compiling the statistics is to compare the prices of properties listed in one month with the previous month, the data set is always changing. So an equally plausible explanation is that the composition of listings is changing and that higher priced properties are now coming for sale. This would be consistent with anecdotal evidence that the better off in our society have initially been sheltered from the effects of the economic slowdown. Is it catching up with them now?

This set us thinking even more. We wondered how many million pound plus properties might now be coming on to the market as the investment bankers and hedge fund managers who have done so much to drive up central London prices start to head for the exits? A few additional properties such as the £40 million ‘flat’ (!!) in Chesham Place SW1 (listed by Knight Frank) might really change the RightMove sample meaningfully.

How ironic it would be if the distressed sales of former ‘masters of the universe’ were giving the impression of market strength, rather than weakness...

Board bored?

2008-09-24T14:28:00.000-07:00

As unusual as it might seem for us to link to a traditional estate agent twice in a week, I couldn't help but comment on the latest blog post from the London estate agency Chard.

It seems that Chard really don't like "for sale signs", which in all honesty I find quite unusual, especially for a traditional estate agent. Here at BrightSale, despite our expertise of this new fangled internet thing we really value some of the traditional marketing methods, especially for sale signs. We also think they have some evolution left in them, after-all they have remained pretty unchanged for decades. To let you into a little secret we even have some ideas in development on how to bring them into the 21st century. On the whole though, we don't think the world is ready to say goodbye to boards just yet.

In the meantime though, what is your opinion on agency boards? Do you love them or loath them? Have your say in our poll to the right.

New Arrivals

2008-09-23T12:53:00.000-07:00

Admittedly and ashamedly, I’ve been quite quiet on the blog post front this month. The reason for this is that the birth of my first child, Lilly, occurred on the 31st August and as those of you that have experienced this life changing event will concur, I have been kind of busy for the past three weeks!

Being in my early thirties, children were appearing everywhere around me. The majority of my friends were having them and nights out were just deteriorating into conversations about nappy contents and first smiles/words/projectile vomits etc etc. I couldn’t understand what was happening, why was no one else interested in the latest vodka flavour, the cocktail shown on ‘Something for the Weekend’, and the latest ‘Wolf in sheep’s clothing’ by Audi? Until now, I had no idea.

I think the realisation is simple, times change, people change and priorities change. The friend that always had the Robert Carlyle ‘Begbie’ moment whenever he had too many to drink had suddenly become a calm doting father. The friend who seemed to know lots of men in Epsom when she drank was suddenly settling down with baby and its father. Its strange, but these are people I had never envisaged changing.

Now, I know your waiting for the tenuous estate agency link somewhere, and so as not to disappoint, here it comes. Agency is changing, the ‘New arrivals’ would be the internet, ourselves and some of the other online agencies that are appearing and the old friends changing their ways would be the Spicerhaart’s and Connells of this world, once stuck in their ways but now grasping the web with both hands. One London agent, Chard, even has a blog!

My concern however, is for that friend that never changes, he or she is still sitting in the corner of the local pub that you first drank in, single, lonely and probably living at home with mum. Compare them if you will to the agencies denying that anything is wrong or that technology is beneficial, until one day you walk past and they are boarded up, just like your unfortunate friend.

We will Advise Foxtons for Free !!!

2008-08-29T07:42:00.000-07:00

The news that the unfortunate new owners of Foxtons have called in NH Rothschild’s to perform a ‘strategic review’ of the business made us smile. They say that in the land of the blind the one eyed man is king. But in the land of estate agency, Jon Hunt appears to have had a telescope when everyone else was using a microscope.

Foxtons was bought (as everyone now knows) right at the top of the market by the private equity group BC Partners. How much insight BC Partners put into UK estate agency is not clear (their previous acquisitions were in healthcare and publishing), but one suspects that their vision was positively 20/20 compared with the two groups that put up the bulk of money: Bank of America and Mizuho, who between them lent BC £260 million to fund the purchase. We are certain that Rothschild are a top quality investment bank, but we wonder whether the venerable old firm is really the right person to advise on the future of estate agency in 2008.

So here is our offer... in April this year we wrote a report entitled (co-incidentally) The Future of Estate Agency(PDF) . We are prepared to let Foxton’s executives have a copy of it FREE, as an alternative to their multi-million pound ‘review’ by the blue-blooded bank. Our note sets out clearly how the branch-less online model works and how it delivers superior customer service at a price vendors judge to be fair and reasonable (i.e. a long way from Foxton’s 3% tariff).

With the money they save on the advice, Foxtons might even be able to fuel their minis for another few weeks...

BrightSale Urges Chancellor to Act on Housing Crisis

2008-08-26T04:22:00.000-07:00

Today BrightSale announced that it had written to the Chancellor demanding the removal of the restriction on SIPP pension schemes investing in residential property. BrightSale argued that such a measure would have a hugely positive impact on the housing market and (unlike the removal of stamp duty) would cost the Exchequer nothing. The full text of the letter is reproduced below:

Dear Mr Darling,

Amidst the media frenzy regarding the possibility of a ‘stamp duty holiday’ this Autumn, we fear that you may be missing a potentially much more effective (and cost-free) remedy for the current housing crisis.

As you know, on 1st October this year holders of ‘protected rights’ pension assets will be allowed to transfer those assets into Self Invested Personal Pensions (SIPPs). The Financial Times this weekend estimated that up to £100 billion in assets could be transferred at this time. As it stands currently, none of this money can be invested in residential property because of the Government’s last minute removal of residential property from the qualifying assets list in 2006. This is despite the fact that when the legislation was drawn up in the Finance Act of 2004 it was Government policy that residential property would be included in ‘SIPPable’ assets. We understand that at that time the Treasury feared the impact of extra demand on an already tight property market. We do not dispute that that may have been an appropriate decision then, but with prices now in free fall surely now there is strong case for revisiting the restriction.

Lifting the restriction on residential property in SIPPs as of 1st October 2008 would not constitute a ‘bail out’ or involve intervention in the mortgage markets. It would involve no ‘special favours’ to property owners. It would pass any ‘fair and reasonable’ test because it would simply remove a restriction that, until 2006, the Government itself regarded as iniquitous. The special conditions that applied to the property market in 2006 have now certainly dissipated. Property derivatives markets are predicting a total peak to trough decline in prices of over 30% - more than double the total fall in the 1989-1993 period.

The Government should not set the price of tradeable assets in a free economy. But neither should the Government unnecessarily restrict investment where it is needed. Price movements are telling us that investment is needed in residential property. As you will also be aware, unless urgent action is taken at this time the Government’s goal of delivering 240,000 new homes a year may as well be torn up.

Action is needed to break the vicious cycle of self fulfilling negative price expectations. Many of our customers have marked down their properties by 20% and have still have had little success in attracting interest. The market has virtually ground to halt in many areas of the country.

Unlocking £100 billion in SIPP capital has the potential to reverse the spiral of negative expectations and to get transaction levels moving upwards again. It would have much more short-term impact than a stamp duty holiday and would not cost the taxpayer a penny. It is a far more logical response to the crisis and we urge you to look closely at it.

Because of the huge amount of public interest in this matter, I will be making a copy of this letter available to the press.

Very best regards,

Jeremy Howard
Finance Director

A "free" housing market boost

2008-08-25T04:42:00.000-07:00

Gordon Brown and Alistair Darling are under enormous pressure to relieve some of the downwards pressure on the UK housing market. But their options appear to be severely limited. Sir James Crosby's recent report pretty much killed the idea of direct Government intervention in the wholesale mortgage market. Fiscal constraints also mean that any 'holiday' for Stamp Duty would have to be short-lived and restricted to lower value properties. This would (and has already) create short-term distortions and uncertainties in buying patterns.

But one there is one thing the Government could now to boost demand for UK housing significantly without costing the Exchequer a penny in lost revenue: this is to remove the restriction on Self Invested Personal Pensions (SIPPs) investing in UK residential property.

On 1st October this year SIPP rules change to allow holders of 'protected rights' pensions to move them into SIPPs. Pension advisors have told BrightSale privately that they expect a deluge of money (The Financial Times has estimated this number to be in the region of £100 billion) to flow from protected rights schemes into SIPPs on or after this date. But as it stands at the moment none of this money can be invested in the residential property market. Instead it will mostly go into commercial property and other financial assets.

We have also been advised privately that the only reason residential property was exempted at the very last minute from SIPPs when they were introduced in 2006 was a Treasury fear that demand from these vehicle's would further fuel a overheated property market at that time. That was probably a good decision then. But times have changed dramatically since, and it is now time to re-visit this restriction.

We call upon the Government today to announce that from 1st October 2008 (when the new pension rules on protected rights pensions come into force) that the restriction on SIPPs investing in UK residential property will allow be removed. This will unlock a huge pool of money for investment into residential property and at a stroke will transform sentiment towards the UK housing market. Action is needed, and this is action that costs the Treasury nothing in lost revenue.

A little bit of fun

2008-08-21T07:28:00.000-07:00

We wouldn’t normally condone a flippant and pretty irreverent poll such as the Rat and Mouse’s ‘Which Property Celeb will go Bust first?’ - but given that people are rather depressed at the moment we thought a quick plug was justified to lighten the mood just a little. Some of the comments are quite funny (not the rude ones of course which we deplore). But we do agree that to some extent the ‘property expert’ community did have a small role in helping to whip up the hysteria at the top of the market and hence deserves a little playful ribbing as we slide the other side:

http://poll.pollcode.com/RALe_result

Enjoy.

BrightSale, the Wonder Years

2008-08-20T00:53:00.000-07:00

Having been with BrightSale over six months now, I can genuinely say it has been an overwhelming experience. As mentioned in previous blogs, I had been a traditional agent throughout my career and was the first to ‘poo-poo’ this impending new wave of low fee, internet-based estate agents.
Admittedly I have seen only been involved with the latest two versions of the BrightSale website, not the original 2005 edition, but the sense of pride in seeing BrightSale grow and even ‘learn’ is amazing. I presume it can only be like seeing your own child grow.
My first child is due any day now, so this comparison, though extreme, is very pertinent. I am sure my wife, who is currently struggling around the house just awaiting the day, will certainly not appreciate my slightly whimsical comparison. But at Brightsale everyone involved believes in our product so strongly that we just want a small percentage of that belief and energy to be felt by our customers.
It is certainly the case that our customers have been a lot more receptive to what we are doing than our competitors. Rather than dismiss the idea out of hand, as most of them do, we just hope that some of them will stop and take stock of the situation as it is. They should look across the water to the United States to see how companies such as Redfin are attracting tens of millions of dollars of venture capital funding, and how much business they are doing.
This is why we are now looking for BrightSale partners. Agents with excellent reputations in their local area who can combine with the strength of the BrightSale platform.
This is the most exciting part of my job at the moment – aside from the pleasure I get from successfully completing a property sale (as we have done with increasing regularity over the summer).
I am now being approached almost daily by traditional agents who can see how the industry is changing and who want to know how they can use the BrightSale platform to run their own local business.
So rather than talk about more ‘poo-pooing’ (I have been told there is plenty to come for me!) if you are an established agent with a genuine local reputation for excellence (no ‘soccer moms’ please) give me a call or register your details on the site, and we’ll call you back for a more in depth chat.

RightMove vs Globrix – The Portal Battle Gets Down and Dirty!

2008-08-18T04:01:00.000-07:00

You have to feel for the head of PR at RightMove. That job must be right up there with the Downing Street press office in terms of difficulty right now!

After hefty price rises on agents in January - just as the market was beginning to fall off a cliff - RightMove followed up with a steep increase in prices on rentals in the last couple of weeks. If this looked like monopolist profiteering at the expense of desperate agents, the revelation last week that new and punitive ‘re-joining’ fees would be levied on any agent with the temerity to take a ‘sabbatical’ from the mighty portal might well be the straw that breaks the industry’s back.

The more fundamental problem for RightMove is that it is only acting like a monopolist. In fact RightMove is now nothing of the sort. Globrix, with its 850,000 current listings, is now almost on a par with the former clear market leader. Anyone who remembers the launch of Sky TV, with the steady and relentless erosion of terrestrial TV’s market share over a number of years, will be aware that if News Corp. has decided to dominate this space then it will only be a matter of time before it does so.

As if to emphasize the point, Globrix today contrasted its 100% free model with RightMove’s approach:

“The best business relationships are built on loyalty and support, but Rightmove, clearly, is displaying neither. It is acting very much in its own interests, and those of its shareholders, rather than the interests of agents. Its actions almost read like a suicide note.” It said in a statement.

The City seemed to agree, with RightMove shares (which had been staging a modest recovery in recent weeks) slumping more than 7% to below the £3 mark again.

Time will tell how successful Globrix’s assault will be. But today’s statement from Globrix certainly marks an escalation in the war, and perhaps signals that Globrix feels RightMove is weakened by the recent PR disasters and is more vulnerable than ever to a sustained assault on its position. There is no question that with its emphasis on ‘partnership’ and ‘support’, Globrix is winning the PR battle right now.

A New Look for BrightSale – But Service Matters More

2008-08-16T10:04:00.000-07:00

We hope you have noticed our newly designed home page – and we hope you like it! Here at Brightsale, customer experience and aesthetics are important to us, and we are quite pleased with our bright and clean new design – especially as it contrasts so sharply with the dire and dour mood of most of the estate agency profession!

Given that we are now on version 3.0 of BrightSale online estate agents, we thought this would be an ideal time to take a trip down memory lane and look at BrightSale's evolution over the past 2 and a half years.

BrightSale 1.0 (December 2005) - The seminal first album
When we first created BrightSale, we really wanted to make sure we stood out against the typical, subdued and sometimes intimidating high street estate agent websites and the often unprofessional "sell it yourself" property websites. We needed a genuine brand impact and an experience that would set us apart from everyone else in the market. This lead to the very bright and friendly BrightSale 1.0.

The first version of BrightSale will always have a place in our hearts, it ensured we launched with a bang and made sure everybody knew who we are. BrightSale 1.0 can even claim some property industry premiers, most notably:

Live Google Maps with satellite images of every property
Interactive, direct and open messaging between vendors and buyers
A completely new property listing "author tool".

We look back on the original BrightSale and smile, it was friendly, open, honest and truly reflected our ethical reasons for entering this marketplace in the first place. BrightSale 1.0 still remains as the benchmark for all online property sales websites, a notion which is reinforced when we look at our competitors websites! As they say, imitation is the greatest form of flattery!

BrightSale 2.0 (January 2007) - The difficult 2nd record
Thanks to a full years worth of experience in the online property market, we had gained a true understanding of what people wanted from an online estate agent. We listened to a huge amount of feedback from customers and a decision was made to tone down the somewhat brash and colourful appearance of the early BrightSale to give a more traditional and "business like" look to the site.

With BrightSale 2.0, once again, we were in front of the pack introducing more property "world firsts" such as:

The ability to publicise a property through Facebook
Perfect search engine optimisation of every property
Live driving directions to a chosen property
A viewings calendar that gave you real time feedback on all viewings for any given property
A huge amount of administration features for our trained agents

We believe that BrightSale 2.0 cemented us as the most innovative and fastest growing online estate agent in the UK.

BrightSale 3.0 (August 2008) - The definitive third album
The latest version of BrightSale is something of a statement to us. It is the perfect blend of both of our previous site versions, clean, bright and friendly, yet professional and feature rich.

As is expected from with BrightSale, the changes are not just superficial. BrightSale 3.0 introduces a whole range of features that allow us to move onto another level in terms of customer service. Our experienced agents now have instant access to every detail they might possibly need to ensure a quick and smooth property transaction for every one of our customers. We have even created our own "artificial intelligence" system which will gives our agents the ability to pull up all suitable "live" buyers to any given property. It's even bright enough to work out which buyers are best suited and in the best position to purchase any given property and alert our agents without any interaction! Internally, we've nicknamed it HAL 9000, it's that clever!

Of course, we have been listening to our customers and over the next couple of weeks we will be introducing several unique features which combat the major issues that people have with estate agents, such as lack of communication and poor feedback. We don't want to give too much away at this stage - but suffice to say that as far as we are aware nobody else in the industry (be they traditional or online) offers the level of information and control over a residential property sale that the new BrightSale tools will do.

Rest assured, here at BrightSale we are continually thinking of ways to make property transactions smoother and more open. We believe we are the true pioneers of modern estate agency and we aim to stay ahead of the pack for many years to come! Watch this space!

A Picture Paints a Thousand Words!

2008-08-14T08:00:00.000-07:00

In the current climate you would expect your agent to be marketing your property to the best of their abilities wouldn’t you?

Take a look at these then….

1 This is the lead photo that Knight Frank have for a property worth...wait for it!...£45,000,000!!

2 Benham and Reeves advertise this £2,350,000 detached house like this...

3 Are Eastons of Epsom a garage or an estate agent?

4 Surely J P & Brimlow of Manchester realise that prospective purchasers looking at this property can see just how long it has been for sale by the trees in the background?

Simple rules can make photos of properties so much better. No cars on the driveway, seasonally correct, no bins in front of the house and ideally a sunny day (admittedly not under the agents control, but they can always go back).

In this tricky market every effort has to be made to present properties in their best possible light. Your agent, if he/she is any good, will demand that the interior of your property is immaculate for every viewing.

You as the vendor must demand the same level of attention to detail from your agent when if comes to your details, floor plans and (in particular) your photos.

If you like this sort of thing, check out this bunch of photo howlers from our friends across the pond on the REagent blog.

The guys over at Zoomf also have some interesting thoughts on this subject along with one of the strangest property photographs I have ever seen!

A Little Experiment for you....

2008-08-07T00:50:00.000-07:00

Here at Brightsale we thought it about time we blew our own trumpet rather than commenting on others failings for once…

Based on the fact that 80% of prospective purchasers now search for property online, wouldn’t it be great if you knew that your agent was doing everything possible to make sure your property appeared as one of the top searches on the worlds biggest and most popular search engine, Google? Of course it would. Brightsale are fortunate to not just have experienced estate agents on board, but also experienced web and programming experts, enabling us to maximise the exposure your property receives on the web. The proof is in the pudding however, so lets try an example:

Take any development of flats where Brightsale currently have an apartment for sale, for example the ‘Quay Five’ development in Manchester. If I were a member of the public looking for a property here, I would type into Google ‘Flats for sale in Quay Five’ and look whose link comes up first. Brightsale. There are lots of flats available in this development but through our unrivalled experience in this field we can virtually guarantee a top five placing. This power is immense and provides us with the majority of our sales, pro-active ready to move purchasers know where and what they want to purchase and are by-passing the traditional property websites and searching directly and clicking the link shown by Google. Flats and apartments are not the only ones to benefit, take any of our houses and enter its’ street name, for example ‘houses for sale in Elmslie Close’. There we are, top of the tree. Surely there must be more than one house for sale in a road called Elmslie Close in the whole world? But there we are top, above all the other agents and even the property portals themselves.

Now where’s my trumpet….?

A Stamp Duty Holiday would be a Start

2008-08-05T04:41:00.000-07:00

Stealth taxes have been a cornerstone of the Labour government’s fiscal policy for 11 years now. Stamp duty increases have been one of the most reviled in Middle England, and so it is with pleasure that we note Chancellor Darling’s seeming new willingness to consider allowing purchasers to (at least) defer Stamp Duty for a period. In our view, it would work best – at least in terms of getting transactions going again – if it were time-limited. At the moment, people who really should be moving home for economic or personal reasons are simply deferring the decision in the face of monthly price declines. Every month that goes by, these would be buyers (assuming they are trading up) are being vindicated in their decision to wait by falls in the market. If a purchaser knew that he/she only had (say 12 months) to complete a purchase to take advantage of a Stamp Duty holiday it might do something to balance up the ‘one way bet’ of simply waiting for property to get cheaper and cheaper.

In many ways, Gordon Brown’s parlous political position is a blessing for the housing market. Had he been stronger, he might have been more inclined to tough out the current downturn. As it is, he simply has to pull some serious rabbits out of the hat to have any chance of reviving his premiership. A well targeted move which breathed life back into the housing market would be an eye-catching way to start. He was a tinkering Chancellor himself, so let’s hope he encourages his successor to ‘tinker’ in a positive way for once.

Pay More, Get Less?

2008-07-31T03:14:00.001-07:00

In these challenging times for all estate agents we read with amazement that our already struggling high street competitors are raising their fees.

KFH recently said: "Our fees have gone up because of the nature of the property market as it is – we are having to do more to find buyers for our customers … In that situation, it is inevitable that fees will have to go up – we have 50 branches across London and have had to raise our fee across the board." Mmmmm.

Perhaps if they focused more carefully on their cost base they would not have to raise prices for the hard-pressed consumer.

A senior negotiator at Bonnetts in Brighton is quoted as saying: “a lot of people are getting desperate to sell and so they put their property on with a load of agents. The chances of us selling it when we are competing with five other agents are slim and in a difficult market, you don't want to spend the time on these sorts of properties if you are not going to get a good fee. If people walk away because the fee is too big then that is fine with us if it is something that we do not want to deal with”.

Well, firstly whoever let this member of staff speak for the company must be mad. Everything about it reads badly. The phrase ‘the chances of us selling it when we are competing with five others are slim’ exudes not just a lack of confidence in the market but also in the ability of the company to perform the task that the public are now paying them more for!

This is followed by ‘if people walk away because the fee is too big, then that’s fine with us’ just amazes me. Every instruction is a possible fee for an agent, letting people walk away is just madness. If I was still in traditional agency and one of my staff let someone ‘walk away’ because of a fee I would go crazy. They are negotiators, negotiate! Would you want an agent like that to let a potential buyer ‘walk away’ from your property because their negotiation skills failed them?

All estate agents, traditional and online, need to get real. The market is tougher, sure, but the way to deal with it is to roll up your sleeves, cut out unnecessary costs, and work harder. Simply raising fees and turning away business is the path to ruin, not salvation.

What a difference a week makes

2008-07-25T07:12:00.001-07:00

It was Tuesday morning, and as I got into the car something already felt different. There was a strange feeling to the day, something I hadn't felt for a long time, I couldn't quite put my finger on it until as I reversed off the drive I immediately had to do something that I hadn't for what felt like months on end...I had to put sunglasses on so that the morning sun didn't blind me. A stunning morning with the crisp blue skies you remember from childhood had dawned and oddly everything else started to fall into place from there.

The usual two mile queue that greats everyone trying to get to work on time out of Epsom towards the A3 was nowhere to be seen. Of course the children were off school! ...the DJ on the radio sounded optimistic, dare I say happy even! The weather forecaster promised a week of sunshine with temperatures reaching nearly 30 celsius by the weekend. This was too much, I was smiling uncontrollably for no reason, I even turned up a Queen song as I reached the A3 in record time! Could things get better? You bet!

The 8am news came on the radio and provided the 'bricks' for my mornings optimistic 'cement'. Petrol prices were coming down. Our dear friends at Tesco, Morrisons, Asda and Sainsburys had agreed to reduce petrol by up to 5p a litre. Wonderful.

The odd thing about it all, is that here at Brightsale we knew it was coming. Whilst we are not claiming to be the Estate Agents version of Nostradamus, this blatant disregard for the 'Doom and Gloom' of recent months had been echoed by our own performance throughout July. We have found viewing levels to be much higher than that of April or May, and with motivated able purchasers and realistic vendors meeting each other with their price expectations, this months sales have been the best of the year so far.

So, stock up on the sun tan cream, fill the car up and should you be thinking of selling, why not try an agent who remains positive week in, week out? One who explains and qualifies the adjustments you may have to make on your asking price rather than just tells you every week that your price is too high. People still have to buy property, there is no reason why yours shouldn't be one of them.

PMA 1991 - Stop Mis-describing the Misdescriptions Act!

2008-06-30T06:18:00.000-07:00

An excerpt from our latest research report into the myths surrounding the Property Misdescriptions Act 1991...

What is not fair is traditional agency’s misinterpretation of the law to justify their costly and cozy business practices, to the detriment of online estate agents. And of course the biggest culprit is the oft quoted, and oft mis-quoted, Property Misdescriptions Act 1991. The Act is well-named, because there cannot be a more widely “misdescribed” piece of legislation on Britain’s statute books.

Another great piece by our research team that is a must read for anyone interested in this often murky subject. Click here to read the full report.

Preparing for a viewing

2008-06-25T02:33:00.000-07:00

"I got home last night and my wife demanded that we go somewhere expensive…so I took her to the petrol station."

With national press and TV coverage bemoaning the state of the economy and specifically the housing market, it’s no wonder that the typical British trait of poking fun at ourselves in times of need begins to surface once more. All we are hearing is ‘house prices are falling’, ‘cost of living increasing’, ‘fuel bills to soar by 15%’. My point is that we know life does go on. We make these jokes to soften the blow because in reality people still need to buy houses and people still need to sell houses.

The trick is making the most of both what your property offers, and every opportunity that your agent provides you with be it an open house day, professional photography, floorplans, a specific advert for your property or just a For Sale board. Grasp them with both hands. Make sure your agent’s description focuses on the very things that made you buy the property, because you can be sure that if they attracted you to it, they will attract someone else to it.

In return though, and I think I speak for most of my competitors here, a simple request : Please, please prepare your house for viewings! With buyer activity limited, the buyers out there are not only thin on the ground but also very knowledgeable. Your home needs to stand out from its competitors and if you cannot do that by being cheaper than them, then you need to be better. Below are some general pointers that will make all the difference.

Kerb Appeal

The viewers pull up to the front of the property, open the car door and look around. If the neighbours have five foot high grass and old bathtubs/fridge-freezers/washing machines/car parts (delete as appropriate) in the front garden it really doesn’t help. Whilst I understand that you don’t have any control over what your neighbours do, a polite request or even a helping hand to clear any unwanted ‘rubbish’ wouldn’t go a miss. Now, your own front garden will of course not be in this state, but we need to go a couple of steps further. Firstly cut your lawn (stripes are nice, but not essential!), remove the bins from the front of the house. If you have a driveway nearly finished, finish it. If you have a driveway finished, clean it. No oil spills and a quick weed will go down a storm. The percentage of purchasers whose first request when registering with agents is ‘off street parking a must’ is phenomenal, it saves money on car insurance and is hugely convenient, so as they say, if you’ve got it, flaunt it.

Tidy up

Rooms look larger and more inviting when they are neat and uncluttered. Put clothes away and close cupboard and wardrobe doors, make the beds, do the washing up, clean the sink and remove any limescale from taps. Kitchen work surfaces should be clear, make sure bathrooms are clean and toilet seats are down. Remember that the presentation of your kitchen and bathroom are very often key to leaving that good impression. If you have an extractor fan with a light, use it! Light up the glistening hob beneath, if you have under cupboard lighting use it also, sometimes in preference to your main kitchen lighting. Your home should look warm and cosy both inside and out. Replace any dead bulbs, open the windows, (even for a few minutes – to get rid of any cooking or pet odours). If it’s winter, make sure your home feels warm. Empty the kitchen bin, make sure the windows are clean inside and out, turn off the TV and put the radio on softly and tidy away any children’s toys you have. Control pets as much as possible, for instance people who don’t like dogs can be really put off a house by an aggressive loud barking dog.

During the Viewing

While people are viewing your property, you have an opportunity to find out what’s important to them. Listen for clues and, where possible, tell them about the features of your home and the neighbourhood that you think would appeal to them or are relevant. There is no point in bringing to their attention the excellent pub 100 yds down the road that has live music every night if that is not what they are looking for. Once you have told them everything you think is useful, let them look round the property again on their own so that they can gather their own thoughts and impressions. Ask them what your agent was like setting up the viewing. Was he or she helpful and informative? Did he/she really ‘sell’ your property. This will give you an excellent insight in to how your property is being marketed.

Conclusion

Contrary to popular belief, the market isn’t Dead. There will still be more than 600,000 homes sold this year even under the very worst case scenarios; and there is no reason why yours shouldn’t be one of them.
As the Scouts say ‘Be prepared’, and as Henry Ward Beecher said, ‘The difference between perseverance and obstinacy is: that one comes from a strong will, and the other from a strong won’t.’
You will sell your property if the price is right and you have prepared properly.

Traditional agents begin to take online seriously

2008-06-09T04:56:00.000-07:00

It is nice to have an opportunity to agree with Paul Smith of SpicerHaart for a change. After we had the temerity to suggest that his purchase of Tesco’s online estate agency might lead to Spicerhaart branch closures (BrightSale Blog [May 7th 2008]) he contacted us directly to complain. He had a point, in that we have no evidence of closures either real or planned at this stage (but you can be sure that we are watching closely and if we see SpicerHaart’s being shuttered you can be sure we will straight back to the issue). But for now … enough.

However, in his column in Estate Agency News this month (June 2008) Mr Smith was in much more constructive form. He forecast that 3% of vendors would choose to sell their properties ‘online’ when the SpicerHaart / Tesco Property Market is re-launched. Given our current estimate for completions in 2008 of around 1 million, this means 30,000 properties sold online in the next 12 months or so.

But more importantly, Mr Smith also stated that his forecast predicted an online market share of 10% by 2013. By then we estimate that completions will have recovered to their ‘trend’ rate of around 1.5 million annually. This suggests that in 2013 the online market will be some 150,000 completions per year. At an average fee rate of 0.5%, this implies an online market turning over £150 million annually from commission fees alone. Ancillary service revenues would boost this past £200 million.

These numbers are very large and must be very troubling to the traditional sector. But aside from the investment of the far-sited Mr Smith and SpicerHaart in the Tesco platform, there really has been very limited investment to date in pure online estate agencies. This is very surprising, and stands in stark contrast to the $12 million invested in the leading online agency RedFin in the US.

But if Mr Smith is correct (and we hope he is) then the era of significant investment in online estate agency is about to begin.

Is the Writing on the Wall for Rightmove?

2008-06-07T14:22:00.001-07:00

The City of London appears to be throwing in the towel on Rightmove. In October of last year (2007), as the term ‘credit crunch’ was just beginning to achieve common currency, RightMove’s share price was riding high just below 620p. But since a mini-rally in March this year, it has been falling steadily. Until recently the share price had been supported in the downturn by the ‘theory’ (mainly disseminated by Rightmove itself – but bought by some analysts) that as it got harder to sell houses, agents would need Rightmove more and more. In fact, Bloomberg quoted RightMove Managing Director Ed Williams as saying earlier this year: “A tougher housing market means that property advertisers examine the cost effectiveness of everything they do … This plays to Rightmove's strengths''.

Well yes … and no, Mr Williams.

The problem for Rightmove is that estate agents are indeed examining the ‘cost effectiveness’ of everything they do, and our discussions with agents suggest they are increasingly wondering why they should be paying up to £475 a month per branch to Rightmove when Globrix is increasingly doing the job for free. Indeed in the middle of April Globrix was able to announce that it has risen to 750,000 properties listed, which is not far behind Rightmove now.
From our perspective there can be little doubt that Globrix will surpass RightMove - probably in a short space of time - unless Rightmove abandons its outdated ’subscription’ model. by not including the listings of online estate agencies, RightMove is limiting the number of properties that its customers see. This ‘invisible’ universe of properties that are on Globrix but not on Rightmove is growing at a rapid pace, leaving Rightmove looking like the Dutch boy with his finger in the dyke - desperately trying to support a model that is being swept away.

There will be an inflection point, reached quite soon, when Globrix’s listings equal those of Rightmove. As soon as that point is reached, Rightmove will begin to hemorrhage agents because in this climate, if an agent can save up to £475 per branch per month and achieve the same result they are going to. And once one or two break ranks - an avalanche will ensue.

Rightmove’s share price has already plummeted from 620p last Autumn to just 330p now (6th June 2008). Investors are reading the writing that this clearly written on the wall.

Big Step Forward for Online Estate Agencies in the US

2008-06-01T10:57:00.000-07:00

Online estate agents in the US won a huge battle last week by being granted access to the comprehensive MLS database of ‘for sale’ property.

Online estate agencies in the United States had, for the last few years, been engaged in a bitter struggle with their traditional ‘realtor’ (read: traditional high street estate agency) competitors for access to the “Multiple Listings Service” (MLS) database of homes for sale in the US. As anyone who has bought or sold property in the States knows, fees there can amount to 6% - with the buyer and the seller each paying 3% to their respective agents (yes, even the buyer usually has an agent in the US). Given such exorbitant fees, it is little wonder that a dynamic ‘for sale by owner’ (FSBO) sector of online estate agents has developed over there.

But until last week’s judgment, the organization representing agents, the National Association of Realtors, had restricted access to the MLS listings service to try to stifle competition from lower fee online agents. The situation was investigated by the antitrust division of the Department of Justice, and the NAR has had to climb down and drop its prohibition on online agency listings.

The parallels with the UK are interesting, although not exact. Here the National Association of Estate Agents (NAEA) does not actively discriminate against online agencies. That job is left up to the previously dominant portal RightMove (which was established by a group of traditional agents). RightMove does discriminate against online estate agents, and actively tries to perpetuate the monopoly of high street agency by refusing to allow listings from any agent not employing a traditional branch network. Fortunately for vendors in the UK, RightMove’s dominance is fading fast (along with its share price) as the News Corp. backed non-discriminatory portal Globrix has leapt from nowhere to second place in the portal rankings. And given the progress Globrix is making in terms of traffic numbers, and the squeeze on agents’ marketing budgets as transaction volumes plummet, it looks to be only a matter of time before RightMove loses its 800 pound gorilla status.

So it looks as if the marketplace in the UK will facilitate what the DoJ has had to do in the US, namely to allow a fair and level playing field on which traditional and online agencies can compete. It is not too much to ask.

Property Portal End Game Begins

2008-05-07T03:28:00.000-07:00

Apologies to all the early birds who read this when it was first published. It seems I got my "findas" and "finders" mixed up. It is indeed FindaProperty not PropertyFinder who are involved in this deal.

The news that FindaProperty and Primelocation are to merge comes hot on the heels of the tie up between HotProperty and PropertyFinder. This looks like the beginning of an end game for the first iteration of the property portal model – where estate agents paid a subscription fee to list properties . The move can surely only be welcomed by cash strapped agents who now have one less subscription to find each month. It still looks like there are too many similar portals, however, and we expect to see further consolidation before the year is out. Fish4Homes has never really recovered from the debacle of having most of its properties (without their agents’ consent) listed on the sell it yourself Tesco Property Market last year, and looks to us to be the most likely next victim. Even Primelocation does not look impregnable to us, with its big new website launch turning out to be rather a damp squib earlier this year.

Perhaps because the early portals were set up to replace newspaper advertising, agents have been surprisingly tolerant of the subscription model. But this is now starting to change. The entry into the market of the advertising-only funded Globrix has shown agents that there is another way. After its initial rather buggy beta version, it has emerged as a strong and usable portal which will surely continue to gain traction with the News Corp. marketing machine behind it. We are also intrigued by other funding models such as the payment for leads model that is being explored by companies like Zoomf. We think this has some exciting possibilities, although property portals are not quite MoneySupermarket, and it is not easy to define exactly how valuable a ‘lead’ is at the time it is forwarded.

We expect all portals to be advertising and / or lead generation funded within the next couple of years, and we expect there to be only two or three mainstream ones (led by Globrix) with a larger number of ‘niche’ operators leading the innovation charge. The future looks better than the past, and should certainly be cheaper for estate agents. This is welcome news.

Is Spicerhaart's new venture a signal of a mass branch closure programme?

2008-05-07T03:27:00.000-07:00

Spicerhaart’s purchase of Tesco’s online estate agency may well herald the start of a massive high street branch closure programme, not just for Spicerhaart but for other high street estate agents as well.

We believe that by buying Tesco’s online platform, Spicerhaart is experimenting with a branchless model that companies like BrightSale have practiced for some time. If successful, we would expect to see a rapid closure programme of expensive and increasingly redundant Spicerhaart high street branches. This could see up to 227 Spicerhaart high street branches closed.

As we predicted in our recent research note Is there a Future for Traditional Estate Agency? (BrightSale Research, April 2008), online estate agencies like BrightSale are set to replace traditional high street (high cost) agents in most areas of the market over the next few years. Spicerhaart’s move seems to be admission of this possibility.

Even before Spicerhaart’s announcement, the high street sector has been struggling in recent months. Yesterday, MovewithUs predicted that 4,000 agencies could be shuttered before the end of the year.

But the gloom on the high street is not mirrored in the online sector. At BrightSale we are seeing a big huge increase in demand for our online estate agency product, with listings up by 46% since the beginning of March 2008. Customers are embracing the reduced costs and ease of use of the online product as never before.

Spicer deserves some credit for its early change of tack. Most traditional high street agents are simply sleep-walking into oblivion in the face of the new challenge from online agencies.

We welcome both Tesco and Spicerhaart into the online fold because their presence in our market will further credentialise the online estate agency offering.

And we will not be churlish and remind Spicerhaart CEO Paul Smith that a year ago when Tesco launched the Property Market he wrote a passionate attack on the idea in Estate Agency News, concluding: “Tesco might think that ‘every little helps’ – but it won’t be at my expense”.

But I guess he is allowed a change of haart.