Price is what you pay. Value is what you get. Even the Victorians knew that!

You can learn a lot from the past. Not far from my City Centre Office is a wealth of Victorian architecture and along with the common acceptance that the age created the foundations for ‘Modern Britain’, the Victorians seemed to have it ‘licked’ when it came to the meaning of ‘Value’.

For me, one of the most prominent social thinkers of the time, John Ruskin, captured it beautifully when he stated –

“It’s unwise to pay too much, but it’s worse to pay too little. When you pay too much, you lose a little money – that’s all. When you pay too little, you sometimes lose everything, because the thing you bought was incapable of doing the thing it was bought to do. The common law of business balance prohibits paying a little and getting a lot – it can’t be done. If you deal with the lowest bidder, it is well to add something for the risk you run, and if you do that you will have enough to pay for something better.”

Don’t get me wrong, there will always be a place for ‘cheap’ in the world. Businesses like the Pound Shop or similarly named are successful because they offer what they promote – cheap goods. Buyers rarely visit to purchase something that has a long life, is of the highest quality or something that could be given as a special gift. Unfortunately in other business fields there is often a big difference in what you get, compared with what you expected to get – and it’s rarely positive.

A friend of mine recently chose a local garage to fix their car. Phoning around for quotes they went for the second cheapest. What should’ve been a simple job became a long and complicated one, where lack of expertise and knowledge ended up costing him far more money (and perhaps more importantly time). My friend is not a fool but ended up feeling like one. He’ll say it himself that he knew that it was a gamble and if the original garage had been capable of doing the work agreed, to the correct timescale and pricing, he would’ve saved some money. Unfortunately it very rarely works out this way of course.

The same could be said of selling your own property (usually your biggest asset) and making sure you get the right agent from the outset. With so many agents claiming to offer ‘everything’, often there isn’t a clear picture on perceived value for what you pay.

I’ve spoken about it in a previous post but both locally and nationally in the Estate Agency Industry it is something that perhaps needs greater clarification.

A low fee may initially be enticing but that’s usually because there are a smaller number of people (1 or 2?) to pay a wage to. Even the most capable people in the industry cannot answer the phone whilst undertaking a viewing, valuing a property, chasing solicitors, giving a vendor a marketing update, answering phone calls, replying to email and website leads, booking viewings, valuations, 7 days a week etc, etc – you get the picture.

“If you deal with the lowest bidder, it is well to add something for the risk you run, and if you do that you will have enough to pay for something better.”

You can learn a lot from the past.

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When is an ‘Estate Agent’ not an ‘Estate Agent’?

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I’m going to perhaps surprise you. Being an ‘Estate Agent’ is not just about advertising your property and getting someone to offer the right price.

Just 2 years after we opened in Plymouth in 2004, 7500 Estate Agents sold 1.8 million houses nationally. In 2015, the number of agents had boomed to 18000 ‘Agents’ selling the lower figure of 1.2 million houses. Out of those properties Sold in 2015, statistically 95% of houses were sold by a ‘FULL SERVICE HIGH STREET ESTATE AGENT’ like ourselves.

I was speaking to a one such agent the other day about emails coming through on the internet from websites such as Rightmove.co.uk. He had actually been able to drill down information to such an extent that he could state that well over 75% of people that emailed about a specific property – ended up buying a different property with his company.

This is not only a testament to having the right amount of trained staff to be able to ‘sell’ a better suited alternative property, but for me, yet another key indicator of the INCREASINGLY WIDER GAP that is happening within the Industry itself.

You can’t seem to go a couple of weeks without seeing another ‘Agent’ opening up in the City these days. Being established in Plymouth ourselves for almost 15 years, we know how hard it is to be a successful independent business and I don’t have a problem with a new company opening. My irk however is often in the majority of those new companies using the words ‘ESTATE AGENT’, when clearly ‘Sales Agent’ or ‘Advertising Agent’ would be a far clearer reflection of what many offer?

Of course, if you are not offering the FULL SERVICE you should not be paying FULL PRICE – so I understand people choosing to go with low-fee agents. But when they purport to be the same as every other offering it is totally mis-leading. Many have no experienced staff to answer the phone, no knowledge of the local market, no after-sales team in-house you can speak to or visit, No financial and chain checking, no care, no attention, no customer service – no clue..

Whilst many sellers will be happy with what they’ve got for a seemingly low fee (and acceptance that the customer service bar was set at a low level to start off with) – classing differing levels of service etc under the same ‘ESTATE AGENCY’ banner, causes confusion to the general public and dare I say, is a threat against those agents offering the FULL ESTATE AGENCY SERVICE – career ‘ESTATE AGENTS’ like ourselves here at Mansbridge Balment and others in the City.

So, let’s be honest about this. Advertising your property for sale and gaining interest, even an acceptable offer, does not make you an Estate Agent. It is about so much more and all ‘ESTATE AGENTS’ are not the same.

If you are thinking of moving make sure you really delve into the detail of what an agent does for the fee you pay. You’ll find out that not only are there are some strikingly different offerings out there – you’ll also find out that you get what you pay for too.

Internet V Traditional Estate Agency and the rise of the machines

I was reading in an estate agency magazine last week about the ‘Rise of Machines’ and whether the internet estate agency model could really replace the high street agent. It reminded me of a conversation that I had with a vendor last week.

The conversation started off with me waxing lyrical about how we market property and why we do it in a certain way. I’d had two very similar conversations earlier on in the day but this time it went completely off track when the vendor asked me how I was going to vote in the EU referendum.

Personally, I’m undecided yet I see plenty of positives for sticking with the status quo. But what if it was better spreading our horizons a little bit further? For a business, there lies the eternal question. Stop a dozen people in the street and you won’t find a universal answer to the EU in / out question. But maybe that’s down to all this constant verbal diarriah we hear everyday about the pros and cons. Politicians who tell us made up figures based on what they think we want to hear? In business as in everyday life they’ll always be someone who prefers shop B to shop A. In business, we need variety, different options, constant innovation and a need to adapt to what the consumer wants.

I got back to reading through the article and amongst the words ‘online’, ‘fee saving’ and ‘modern’, I also read ‘trust’, ‘face to face’ and ‘service’. Whilst the ‘internet agents’ tailor their own offering by taking bits of traditional estate agency to suit their business model, the smarter traditional estate agents take parts of ‘internet estate agency’ to service their own perceived view of what the client really wants.

The trouble with all this is that rather than having distinct differences between businesses we run the risk of having estate agents who each have bits of what the others offer and there is a danger that a once clear gap of difference is further diminished. The choice for the vendor then has a danger of just coming down to who is the cheapest.

As my Gran used to say ‘there is no such thing as a free lunch’ and whilst many lower fee agents seem attractive, what I’ve witnessed from those type of agents in the Plymouth area in the last few months are long tie-ins, with-drawl fees and properties selling at lower prices than they should have. I’ve also heard horror stories about the service that they have given (or lack of). Despite all this I still see properties on the market with these agents.

One box does not fit all and the Internet estate agency model will not replace the high street agent. Believe me, I place myself as an innovative agent and if having a high street office did not work for us, then we’d shut up shop tomorrow and trade from elsewhere. We are certainly not there yet and the benefit of having buyers and vendors able to visit us 7 days a week – without an appointment – still is a strong enough reason to continue doing what we do.

We are not a low fee agent. Our difference is in our service.

When ‘experts’ in magazines can’t agree on what is right for the customer – perhaps us as ‘agents’ simply have to speak to our customers and ask them ‘what they want’ in the future. Rather than telling them ‘what they need’?