Personal estate agents, child of our times

2010 may well turn out to be a year of notable change in the property industry. As I've mentioned before in my blog on Tesco versus the local estate agent and a LuvTheCity interview, the influx of agents pushing new business and pricing models has definitely been accelerating.

One such pioneer is Kevin Hollinrake, Co-founder and MD of Hunters Property Group. Hunters are one of the agents (alongside a customer of ours, HomeXperts), leading the way with a network of personal agents.

Today, Kevin guest blogs on why he feels it is the industry growth area.

"Bill Gates once said that we overestimate the change that will take place in 2 years and underestimate what can happen in 10 – it may take time, but I believe that the UK estate agency industry is being catapulted towards the most far reaching changes we have ever seen.

It is a testament to the tenacity, resourcefulness and sheer bloody-mindedness of estate agents in this country that our industry has not been totally decimated by the market collapse of the last 2 years. No industry could suffer a 65% fall in transactions unscathed, yet we have seen relatively few branch closures; generally agents seem to have preferred to reduce headcounts (50%) rather than the number of offices (25%)*. Of those that have closed, some are apparently just ‘mothballed’ and will re-open as the market recovers. The question we need to ask is why? Have agents based this business decision on today’s facts or because that is how they have weathered previous recessions? I am sure that this has been effective in the past, but I believe that things have changed – and that the buying habits of our customers have changed too.

I think the reason that technological changes have so far had little impact upon the structure of estate agency in the UK is that we have all been making too much money – we haven’t needed to change. Internet only agents like Wow Property and National House Network have hardly taken the market by storm, so possibly we have believed that our industry would be changed little by the internet revolution – but I believe that it may be worth taking a little time to consider how these changes may now affect us.

Of course, the fundamentals of estate agency have nothing to do with technology – they are about people. Great estate agents don’t sit behind a desk bashing-out emails all day; they get out there and talk to as many potential new clients as possible. At its best, however, IT can help to remove the things that stand between a good estate agent and his customer, such as office and people management, bureaucracy, sales reports and all other non fee-earning activities. Without these time-consuming hassles the agent can be much more productive and more successful.

Having made the difficult decision to close 3 of our suburban York offices in August 2008, we offered the managers the opportunity to cover those areas without an office or staff as a self-employed, home-based franchisee. We call them ‘Personal Agents’ because they cover a small, defined territory and have a one-to-one relationship with the customer. Our first two Personal Agents are the no. 1 selling agents in their patch despite the fact that their competitors have an office and a team of three, not because they are uniquely gifted, but because that’s all they do - sell. And how! Our top agent earned over £150k last year. Even more compelling are the comments we are getting from our sellers, who absolutely love the one-to-one service they get from our agents and their effectiveness at generating viewings and sales. We now have 34 agents trading in this way in various parts of the country and have 6 new franchised offices opening in the next couple of months who are converting to the Hunters brand with the intention of rolling our this model in their area.

It is all very early days of course, and we are making our changes gradually and watchfully. But the initial results have been startling, and we believe we should go where the customer wants us to go. We cannot avoid making changes just because we have invested time, money and have an emotional attachment to our office networks. The logic and facts are clear – footfall is a fraction of what it used to be, our customers now search primarily online, they want a more personal service and they generally move very locally and, therefore, want a local agent. The localised nature of the service may also lead to more cooperation between agents and possibly a multi-listing approach, another evolution that would be very well received by buyers.

There are no new ideas under the sun, of course, and I do not claim that our model is totally unique - similar systems operate in many other countries including the US and Australia and there are other early adopters in the UK – but I think that this model will be a child of our time.

We believe that there is even greater potential with our model by building a network of agents under a big, well-recognised national brand. Brands are nowhere near as strong in the UK as they are in the US - the top brand in the UK (Your Move) has only 2.8% of the market, whilst in the US the biggest agent (Remax) has 13.5% and we see this as a huge opportunity for our own brand to become the UK’s largest.

I think offices will still have their place, as they provide name-awareness, help to build successful teams and provide administrative functions, but we will need a lot less of them and they won’t necessarily need to be on the high street. What we will see more of, however, are willing, motivated, customer driven individuals who want to work for themselves, earn a lot of money and provide a superb service to their clients."

* Source, Daily Telegraph

Kevin Hollinrake
http://www.huntersnet.co.uk/