Estate agencies: what does the future hold?
Let's make it easier
14 June 2017
Sam Tyrer considers the future for estate agencies
Buying a home is often the single biggest financial commitment someone can make. Our close relationship with our home can make moving a stressful experience, exacerbated by a complicated and unpredictable buying and selling process.
The digital revolution allows customers far greater transparency, flexibility, access and control
Mortgage brokers and agents have a critical role to guide buyers and simplify the system. The best agents will match their service to the individual’s needs, ensuring customers feel relaxed in the knowledge that their transactions are being carefully managed.
With more than 20,000 agencies in the country and low entry costs into the market, it should come as no surprise that the quality of service varies considerably.
The digital revolution allows customers far greater transparency, flexibility, access and control in the way they interact with businesses. They are in a better position to move their business when the service provided does not match their needs and expectations. Certainly, those firms that can adapt to changing customer preferences and convenience have the brightest future.
An internet search confirms the notable increase in the number of online and hybrid agents, which have grown to account for 5% of the property market in a relatively short period.
This underlines a developing need for a customer proposition to work for a market that is digitally aware and wants choice and transparency in transactions. Traditional agents may need to adapt their business models to continue to compete successfully.
Suggesting that the growth of online and hybrid agents is merely a cost issue misses the point. Low-cost agencies have existed for some time, well before the advent of online agents. Focusing on customer service is where online and hybrid agents have been most successful.
My organisation conducted a survey of more than 3,000 customers. This showed that buyers, sellers, landlords and tenants alike all viewed professionalism and reliability as more important than cost when choosing an agent (Countrywide annual report, 2015). Efficiency, transparent fees and communication were also cited as being important.
Many online and hybrid agents manage to meet buyers’ expectations, but the new wave of digital players represent more of an new iteration of the current estate agency model than a revolution. An estate agent with:
- a different set of processes;
- a more transparent fee structure;
- technology-enabled communications; and
- tailored services
makes buying and selling a more comfortable customer experience.
When debating the industry’s future, drawing lines between online and traditional agents is misleading. It is not a question of one or the other; rather, it is one of how agents can adapt to meet a wide range of customer needs.
It is vital to invest in technology as well as training staff to be more responsive to our customers’ needs
Today, the fundamentals of buying and selling homes, not to mention the legal process, remain unchanged. Most customers still require a high level of personal service, but many want to be able to get updates on their transaction or search at their own convenience rather than just during an agency’s opening hours. A small but growing number want to manage more of the process independently with the flexibility to access expert advice should they feel it is necessary.
I believe that our multichannel service, which offers customers a choice of full or flexible service and which now operates across 6 of our estate agency brands, combines the best of both worlds. The flexible – that is, online – service means that customers can manage the selling and buying process at a fixed price, knowing that they can switch to full service at any point without losing any of the fees that they have already paid.
The online service enables customers to:
- book valuations and viewings;
- leave and receive viewing feedback;
- make or negotiate offers; and
- see how their property is performing 24 hours a day, 7 days a week.
However, local expertise and on-the-ground presence is more important than ever. This is why it is vital to invest in technology as well as training staff to be more responsive to our customers’ needs – whichever way they want to do business.
Fundamentally, it comes back to providing customers with a choice. The key is acknowledging that they are not all the same; what works for 30-somethings buying their first home in the capital does not necessarily work for a couple who are retiring to the Cotswolds.
The profession is undergoing a change, adapting to consumers’ needs and lifestyles in the modern world by combining the accessibility of an online service with the experience and local knowledge of established, traditional agents. Together with its best agents, the profession will continue to listen to and meet the evolving needs of customers.
Sam Tyrer is Managing Director of Retail at Countrywide