A new report published by Rix & Kay solicitors, suggests that traditional estate agents are having to step in to support clients who have chosen to be represented by online estate agents to ensure that chains do not collapse and that sales complete.
The result is rising costs for traditional estate agents whilst the home buying and selling process becomes more protracted, more expensive and more stressful for individuals.
Rix & Kay’s report, which publishes the findings of six months of detailed face-to-face interviews with traditional estate agents across the South East, says that sales progression, the support an estate agent provides once an offer has been accepted on a property, is the most skilled and critical phase of the home buying and selling process and that without it, any transaction is more likely to collapse.
In fact, 98% of traditional estate agents who were surveyed during the research, agreed that the home buying process is more likely to collapse in the absence of experienced professionals.
The report goes on to suggest that the business model adopted by alternative online estate agents, who charge an upfront fee and are not reliant on a sale completing to get paid, means there is no motivation or incentive for online estate agents to support their clients during the sales progression phase. Traditional estate agents are left to pick up the pieces and fill gaps left by online agents, increasing their costs and adding additional pressure to already squeezed margins.
Scott Garner, Head of Business Development at Rix & Kay and author of the report commented,
“During the last six months I’ve witnessed unrivalled passion for an industry which has suffered for decades from a tarnished reputation. The traditional agents I spoke to have been central to their communities for a long time and their primary concern is helping local people move home. The challenge for them is to be seen as a key advisor to the home buying and selling process and not an unnecessary expense. That challenge is now even harder as new entrants continue to de-value the profession and increase pressure on margins.”
Other key themes emerging from Rix & Kay’s report include
• The public don’t understand the value and importance of having skilled sales progression support, and the difference between services offered by traditional agents and alternative online providers. Traditional estate agents need to do more to communicate the value and differentiate their services from the cheaper alternative model.
• Rising costs mean traditional estate agents need to consider alternative business models if they want to remain profitable and sustainable.
• Traditional estate agents are calling for better regulation to improve service quality and to improve the reputation and credibility of the industry. This is seen as fundamental to improving the home buying and selling process
• Traditional estate agents need to adapt to the changing needs of clients driven by the advance of mobile technology, online services and innovation
• Traditional estate agents need to embrace new technology to improve their services.
• Traditional estate agents need to consider the impact of any proposed lettings fee ban on the sustainability and profitability of their business now
For more information about the report visit Rix & Kay’s website