Category: News

The National Association of Estate Agents has launched its Sales Protocol Toolkit, in a bid to reduce fall-throughs and dramatically improve transaction times.

The kit, introduced at the NAEA conference yesterday, has been road tested with 200 completed transactions in the Buckinghamshire, Bedfordshire and Northamptonshire areas with startling results.

The average transaction time dropped from as much as 40 weeks to only eight weeks, but the NAEA’s ultimate target is to get that down to a mere 14 days.

The association worked with other agents, conveyancers, the Law Society, The Property Ombudsman and NTSELAT to finesse the documents involved in the pack.

Simon Wilkinson, a partner at agency Wilkinson in Leighton Buzzard, is the NAEA board member who has steered through the pilot programme.

In an interview with Estate Agent Today at the conference he said that the launch of the toolkit marks the start of agents across the country operating it.

It works like this:

– a vendor is emailed a 16 page Property Information Questionnaire which they can complete either before the agent pays a home visit to measure and take photographs, or work through it with the agent at the property. This helps get the property ‘market ready’;

– at the same time the vendor is encouraged to instruct a conveyancer who will assist the vendor getting title deeds and other up-front information and identify problems – missing building regs documents and the like;

– once a prospective buyer has expressed interest, he or she then receives this upfront information, allowing them and their conveyancer to identify areas of concern – if any – or to have comfort that the appropriate documentation is in place;

– a single-page Declaration of Offer subject to contract is then completed by the would-be buyer, giving conveyancer details, status on the sale of their existing property, and details of funding to purchase the vendor’s home;

– a single-page Memorandum of Sale is sent to all parties as soon as a sale is agreed in principle. This would include details of vendor and buyer, chain details, a link to property details and additional information about the property.

“In time – some time off but it will happen eventually – as much as 80 per cent of the details in this online paperwork can be automatically completed by the likes of the Land Registry’s Digital Street project and by portals which will carry a lot of this basic information on every property. The systems will be linked up” says Wilkinson.

The pack will now be circulated to NAEA members and has been designed to comply with CPRs.

Rightmove has released another stonking set of results – but there are signs that some agents are defecting from the ever-more-expensive portal.

Figures released to shareholders this morning relating to the full year of 2019 show revenue, underlying profit and operating profit all up eight per cent – and earnings per share up no less than 10 per cent.

The key Average Revenue Per Advertiser or ARPA – how much each branch or developer pays per month – is up £83 to £1,088.

However for the first time there is a drop in membership numbers over the year.

There’s been a three per cent fall from 20,454 in December 2018 to 19,809 a few weeks ago at the end of 2019.

The breakdown shows that the portal listed 16,347 estate agency branches last year, down from 17,328 in 2018; developer numbers rose from 3,126 in 2018 to 3,462 last year.

Rightmove tells shareholders this is “reflecting a decline in mainly low-stock agency branches offset by strong growth in New Homes development numbers.”

In a statement accompanying the figures, chief executive Peter Brooks-Johnson says: “Rightmove is synonymous with home moving, with 2019 being the ninth year in a row more people searched on Google for Rightmove than for property.

“We continue to innovate, not only for home hunters, but also to help property professionals become more efficient and more resilient to a rapidly changing environment.

“Our culture of restlessness has led to the development of a number of innovative solutions which allow our professional customers to market to by far the largest audience in the UK.

“January 2020 was our busiest month ever with more than 152m visits and that trend has continued as we’ve recorded our five busiest days ever in February.

“I’m pleased that many of our customers who are seeing opportunity are choosing to invest in our digital solutions to grow their businesses.

“By working with our customers, 2019 has yet again demonstrated that Rightmove is a business which can continue to grow in uncertain times.”

In a section of this morning’s report, issued on the London Stock Exchange RNS system, it says of agents:

“Winning the right to an instruction to sell or let a property is critical to an agent’s success. 

“Our premium packages, Enhanced and Optimiser, help our customers to generate more opportunities to win instructions cost effectively. The packages include branding and property promotion solutions to boost agents’ performance in the ‘awareness’ stage of the marketing funnel, while our popular Local Valuation Alert and Rightmove Discover products fast-track agents to the ‘consideration’ stage. 

“We continue to enhance the performance of these products to keep them at the forefront of digital marketing for our customers. Following a number of enhancements, Local Valuation Alert and Rightmove Discover delivered over 20 per cent more leads from people asking for a valuation on their home in 2019 over last year.

“Against the backdrop of a cautious housing marketplace estate agents continue to recognise the value of our additional marketing products and packages with penetration of the Enhanced and Optimiser packages reaching 38 per cent of independent estate agency customers up from 27 per cent in December 2018.”

A new call has been issued this morning by the Competition and Markets Authority for estate agents to confess if their business has been involved in a price fixing cartel.

In a statement released this morning the CMA says: “If you think your business has been involved in illegal activity, you should notify the CMA as soon as possible – you may benefit from lenient treatment by being the first to come forward to the CMA.

“We also recommend that you seek independent, legal advice.

“If you have information on other companies in your industry that may have been involved in an anti-competitive arrangement, report it to us.”

The CMA’s announcement this morning makes the call after expressing concern that there have been three cartel issues in the estate agency industry in recent years.

The latest was in December 2019 when four estate agents were found to have broken competition law by agreeing to fix and maintain a minimum level of commission fees to be charged for the sale of residential properties over a period of almost seven years.

The agents were fined a total of £605,519.

This morning’s statement from the CMA says: “Competition law exists to ensure businesses compete fairly and customers are protected from getting ripped off. Price fixing cartels are among the most serious kinds of anti-competitive behaviour as they cheat customers by forcing up prices and reducing quality and choice.”

And referring to the most recent case it says: ”By fixing minimum levels of commission rates, the estate agents denied local people selling their homes the chance of getting the best possible deal.”

And the statement goes on to issue advice to agents, saying:

– Do not discuss what you or your competitors intend to charge;

– Just receiving or sharing sensitive commercial information is likely to be illegal;

– Make it very clear you will not participate in illegal arrangements or discussions about them and take active steps to distance yourself from the outset;

– All anti-competitive arrangements – written or verbal, formal or informal – are equally illegal, and the CMA has sophisticated means of tracking down evidence;

– There are no excuses for illegal anti-competitive activity – ignorance of the law is not one either;

– If two competitors participate in an anti-competitive arrangement, this is sufficient to make it illegal – it doesn’t matter if not all competitors in the market participate;

– If you are a small business competition law still applies to you.

A free-to-list portal says the costs of listing on the established sites – especially Rightmove – are contributing to estate agencies going bust.

“Property portals make money by charging to list on their site, regardless of a sale or let being made. Depending on the quality of listings, brand notoriety, area of operation, and a whole host of other factors, you could end up paying a fortune to a portal before you even generate your first lead” says Christopher May, director of Residential People.

And he says those portal costs are contributing to as many as 10 agencies goes bust each week, with Rightmove named as the chief culprit.

May says the number one portal has been accused by agents of charging crippling fees and putting the squeeze on independent firms, many of which are now beginning to voice concern about their situation.

“Property portals are undoubtedly a main driving force for the industry and are here to stay, but what good is a portal without the agents supplying the properties?” asks May.

“In theory, portals should work for the agent not against them, yet in practice this rarely is the case,” he says.

He says the major portals justify their charges by suggesting the cost is a trade-off against leads generated and the profit an agent makes from successful leads.

But May says that with more agents suffering narrow margins, and some being required to pay additional costs to hire digital marketing experts, many now seek alternative ways to market and increase exposure of their inventory.

In November Estate Agent Today reported a claim by the property management firm Apropos by DJ Alexander that around 10 agencies had gone bust every week in Britain during 2019.

The firm analysed official data and found that 371 businesses dedicated chiefly to the selling of homes had entered formal insolvency proceedings in the first nine months of the year – 348 in England and Wales and 23 in Scotland. Apropos returned to the same theme last month, claiming more agencies would go bust this year.

Residential People lists some 950,000 properties from a number of countries, and does not charge agents.

“While Residential People is a free-to-list platform, we have other means of deriving income through optional features. In the long run, our business model allows us to develop our proposition into other areas, much in the same vein as Amazon has done at the other end of the scale.”