A leading figure in the property world has warned that next year the industry will face its toughest since the crash of 2008.
Industry consultant Richard Rawlings said that the market will survive Brexit, higher interest rates, industrial unrest and anything that Trump might say.
However, Rawlings warned, the industry is on collision with itself as online agents gain more market share.
Rawlings told EYE: “Online agencies are gaining traction, and may rapidly continue to do so.
“Yet so many agents appear unfazed by this threat to their status quo, dwelling on the fact that people will ‘always need a real local expert, sales progression, negotiation skills, etc’.
“But maybe, just maybe, they don’t.
“Why shouldn’t the public apply the new rules of engagement to agency as they have to almost every other sector of consumerism – ‘I want it all, I want it now, I want it 24-hours a day and I want it cheap – or even free, even at the expense of quality’.”
Rawlings said: “The online agents’ bark may actually be worse than their potential bite.
“Not everyone will want to use an online agency, but most people are now aware that cheaper alternatives to the high street agent exist. This makes regular agents look expensive by comparison. Too many weak agents have allowed this apparent threat to reduce their fees to globally pathetic levels.”
Rawlings also said that the new sharing society means people talk about their experiences on multiple social media channels. “Talk is cheaper than ever before, so that even the slightest opinion, niggle or compliment can ricochet around the land within seconds.
“Its power over an agent’s reputation is immense. Yet while many agents regard themselves as social media savvy, they miss the point. Their communication may be improving, but they are communicating messages that damage their business.”
Rawlings said that many agents will go to the wall because of sheer indifference.
He said: “Indifference kills business. At a time of exciting changes in consumer attitudes and behaviours, agents who don’t take a stand or put their head above the parapet may not get shot, they’ll just get sick and wither away. A natural culling process.”
Rawlings also warned that while the fees ban has been long expected, many agents are still unprepared for the “financial shock” it will bring.
He said these agents were mostly those who expanded into lettings during the last recession.
Rawlings said that in the tough trading environment he expects next year, agents will not just have to change, but show generosity. He said this could mean showing buyers around other agents’ stock, ditching fixed term sole agency agreement, or introducing a voluntary fees regime.
He added: “The overriding problem is that in respect of all the above, many agents would say ‘That’s not me’.
“Ahem, yes it is!”
* Rawlings will be on a ‘Saving Sales Tour’ in the first quarter of next year, when he says he will be showing agents how to insulate themselves from the icy times ahead. It starts in Leeds on January 16, and goes on to Exeter, Tunbridge Wells, Cheltenham, Croydon, Welwyn Garden City, Bath, Oxford, Norwich, Romford, Guildford, Reading and Cambridge, before finishing in Canterbury on March 28.
Rawlings said the seminars would be a “real cage-rattler”.
Comments (43)
I went on a RR course a few years ago about raising fees and to this day we are still charging 2% fees on most of our listingswhich is often more than double of our competitors. In the last year we’ve sold 2 properties, both at £800,000, both at 2% fees, both previously on with competitors at sub 1% fees and both sold! Also the instructions came from letters we sent out that were similar in style to the RR letters.
God I’m bored of reading the idiotic and self serving ramblings of trolls like PeeBee and nextchapter. When is PIE going to moderate these comments to stop prats ruining perfectly reasonable comments, even if often advertorials, for their own self seeking ‘I’m going to be up with the dawn to make sure I’m first on this thread and who can I insult today’ purposes.
Get a life guys, please, and contribute, you make us all look like idiots.
By the way, does PeeBee actually have a job, or does he only post on here [and other troll paradises]……….
Trolling those that are, in your opinion, trolls – delicious irony at it’s best.
You really need to up your game, however. ‘Rank amateur’ is, for you, a dim and distant aspiration of achievement at best.
Speaking as an agent of 37 years standing, who has attended many training/motivational courses and really believes in training his staff, I honestly believe that every course I have been on has given me or my staff a benefit. I have seen Richard Rawlings speak on many occasions and seen the effect that he has on a room and the benefit that I and my firm have gained from it. Whether it is £97 or £150 a seminar/course of this nature is worth every penny. None of us knows it all and we can all be refreshed, re-energised or whatever by listening to a true professional.
Staff feel valued if you invest in their training, in their future and demoralised if you don’t want to develop their skills. Stop carping and wake up. Our industry/profession is under threat and those with the right attitude and skills will survive and thrive. Training enhances those skills you already have and adds more that you didnt realise you needed.
Rant over. My employees will be on RR’s seminar, i hope my immediate rivals are not
“Whether it is £97 or £150 a seminar/course of this nature is worth every penny… My employees will be on RR’s seminar”
So you’ll be paying full whack, then?
Lets see if I get this, you guys didn’t increase your market share by 15% in the last 12 months?
You didn’t increase turnover by 20% from the previous year?
You have lost market share to on line agents?
If you answered yes to one or all of these above questions then may I suggest it’s because your agency is the number one agent in your territory already !!!
Am I the only one who finds it ever-so ironic that above Mr Rawlings states
“Too many weak agents have allowed this apparent threat to reduce their fees to globally pathetic levels.”…
…yet he’s ‘giving away’ what will be a large chunk of his profit margin by discounting bookings by 33% for the next three weeks!
I sense a need to attend a course or two on Maximising Fees and Profitability.
Not as ironic as those agents pitching to vendors on reduced fees, when the thing they are actually selling is their expert ability to negotiate a higher price.
WELL SAID, Blue!!
I’ve droned on about this for years – if a Vendor can negotiate a fee reduction with a ‘professional salesperson’, then that Vendor should be asking if this is the right person to be handling negotiations on their behalf.
Tough times will get rid of the **** agents which is good
Herb
Whilst I agree with you in part – as in past, a toughening market has seen the mass exodus of the ‘easy come, easy go’ brigade – unfortunately a downturn will also see off a number of bl00dy good Agents and Agencies.
Just a moment guys – ask yourself just one little question…
What if Richard is right?
Mr Rawlings is, quite rightly, very respected in the industry.
The newspapers didn’t see the onliners coming…
The solicitors didn’t see the onliners coming… (and you ALL know what that’s like).
The high street didn’t see Amazon coming…
Even if Richard turns out in the end to be wrong, it is still worth paying attention to someone who has often been right.
Worst case scenario you learn a few new ideas that might help you regardless.
BTW, I’ve never met Richard, never bought anything from him or been to one of his training days.
I do happen to think that the current world of estate agents is in for a rude awakening.
You have to remember that there are now double the number of estate agent branches than there were in 2004 and 20% fewer transactions per year.
Everything is on a knife edge – and most of you have the direct evidence of it in your bank balances.
Spot on AC. Well said.
I don’t want to be rude to Richard as i’m sure he is a top bloke with some great ideas, however if its as easy and as fool proof as you say why are you teaching others to do this and not running a highly successful estate agency branch gaining every instruction at a fee that you are worth.
40 places per session x £97 per attendee = £3,880 a session. Why bother with the stress of sales if you can make that on a daily basis!
If all the places were sold at ‘REGULAR’ price, then there would be £2120 PURE PROFIT per sesh to be made…
…by people who are coaching you on how to make more profit.
#just_saying
These agency trainers are all the same, they make out what they use to do, but don’t know the actual market.
Craves69 if they were any good as estate agents they would be estate agents.
I used his canvassing letters and they were cringe.
Whats the old saying, Those who can’t do………….teach.
RR is a doom peddler – nearly all I read of his is negative.
Hmmm, thanks Herb! Surely we should understand and anticipate the problems potentially facing us and find solutions ahead of time. That’s how to increase market share. If the problem is low stock, then address your marketing methods. If the problem is poor conversion, then maybe your listers need to be trained better. If the problem is cheaper competitors, then find ways of impressing clients without resorting to low fees.
If I’m peddling doom to an industry that has, through weakness and a head in the sand attitude, allowed itself to become the cheapest in the world, then I’m sorry I didn’t do it sooner!
The trouble is your negative lectures and tones just make me stop reading.
If you were to change this you would engage more.
#justsaying
Agree with Simon and Peter. It’s easy to get cynical but Richard has always had agents’ interests at heart and has only been so successful – and able to make points like this, picked up by publications like Eye – because he’s usually right and because he’s made it his life’s work to make the industry better.
Whilst obviously the advertorial approach of this article is not particularly appealing, from what we have seen, 2018 will be a year of reckoning for some.
Can I suggest however, that when agents “review how they do things” that you please do not fall into the trap of “additional revenue streams” offered by lawyer panel management companies.
We are seeing too many agents having major quality control problems when relying on these people and too many failed “experiments” where they end up losing too many deals and revert back to quality lawyers.
When every deal becomes more precious why on earth would you risk your sales commissions on the snake-oil promises of the panel manager salesperson.
Let’s make 2018 the year when common sense prevails over pots-of-gold referral promises.
I agree re conveyancing Peter. It’s actually far more profitable to have an innovative conveyancer who can act as your sales progressor and massively reduce your fall throughs than it is to worry about a few quid referral commission. Do the maths!
Thanks Richard
It’s great to have someone who works in a the capacity of an advisor to agents who doesn’t peddle this panel manager capacity nonsense.
You do have to call into question any professional advisor to an estate agent who genuinely believes that panel managers solve the legal delivery problem.
The question that should be asked is; what are your completion rates and how do we improve these. It’s quite basic – getting an extra deal over the line is the equivalent of months and months of referral fees.
Shame most ‘advisors” have yet to grasp this basic idea – great to see that you are on it!
I would suggest that the main contention from Richard Rawlings – that 2018 will be the…”toughest for agents since crash of 2008″ is probably an accurate assessment. Of course, nobody knows for sure , but it is difficult to argue with his logic.
Surely agents need to at least consider challenging themselves by attending these or similar training opportunities.
Thank you Richard – you are indisputably ” a real cage-rattler “.
Oh dear, Richard…….really!!!????
Headline:
please buy my product says industry expert!
The truth is that this is the hardest market we have had for a decade already
even harder for agents with huge head office overheads and a sausage machine business plan
The choice is high quality or on-line – the trouble is even quality doesn’t work for the regionals or corporates anymore as the public prefer truly local and experienced – not young kids straight off a training course and onto a conveyor belt of list and move on
Yes it is hard – that’s why it’s time for agents to take a fresh look at how to do things differently so they take a lead on their traditional competitors. I agree the industry is definitely becoming more polarised and it is the corporates in the middle who will suffer the most. The question now is, how do you ramp up the perception of quality and how does this align with new public attitudes?
Morning all…
I was going to keep this to myself, but I actually have the answer to ensuring a profit in 2018 and 2019, may be a 20% to 40% return on your investment as Estate Agency Owners.
bob £299 via Paypal to ric@paypal and I will send you the info.
It is not exclusive to one agent per area but the first to take it, is likely to gain immediate market share, reduce withdrawal levels to zero and have a 99% sales to completion rate. (Getting it second may be too late).
SPECIAL OFFER: If you send your £299 before 12 noon on Friday I will send you volume 2 of my award winning “How to Make £299 before 12 noon on a Friday” Book.
Hi Ric, please can you give me your bank details and security codes so we can transfer the money for this perfect sounding opportunity. In fact I have spoken with my backers in Africa and they would like to deposit £27m on behalf of 2,000 investors who need to relocate their money to Europe…please send your NI number, address and vital statistics as I believe we have found the perfect business partner 🙂 Are there any good books with guarantees to make money on a Thursday…asking for a friend…
haha… my details are on their way!
What a load of nonsense from self obsessed, attention seeking Richard Rawlings. I hate articles like this, that ultimately end with something being sold. Make things sound as scary as possible in order to get people to buy a product! This article is just Richards opinion, an opinion that is not substantiated with any evidence, to allow for him to sell something. It’s not backed up by anything at all, just hearsay.
Hi Nextchapter. For 20 years I have made it my business to look at the influences and opportunities in estate agency and then sharing these, along with my own observations and interpretations, with those who wish to create distinction in their agency. I think you’ll find that almost anyone other than a government department who offers their opinon to a trade publication does so with some form of promotional interest – why else would they do it? But this does not necessarily invalidate what they say.
In the same way, most progressive agents write newsletters and blogs, with most of these ending with the words “thinking of selling – then come to us!” What’s the difference? So yes, raise awareness of a problem, and then deliver a solution, if you are qualified and able to do so, with a call to action. Have a great day.
Already had a flippin’ hard 18 months, but interestingly online agents is about the last thing on my list of worries for 2018. The general public in my patch have finally cottoned on the market has slowed hugely and where “online” agents gained the most modest of market share, they’ve also since proven they’re not really capable of selling in a tough market. Saw a handful of “online” listings at the front half of the year, about 10/15% sold, rest went on to “High St” agents, didn’t see another listed all year. All that glitters evidently not gold.
I couldn’t agree more. 99% of my competition are estate agents. It is the changing market that is the most concerning.
So this is not actually a report on the current state of affairs, just a sales pitch. “High street estate agents are screwed, only i Richard Rawlings can save you”. Please sign up to my incredibly expensive seminar
Errr – it’s £97! If you think that’s expensive for a day of proven effective ideas then how can you ever expect to persuade a seller to pay you what I hope you are really worth! And there’s a 200% money back guarantee too!
Why is it £97? How did you arrive at that figure?
It’s actually £150 per butt on the chair, Herb – the £97 that Mr Rawlings refers to is an “Early Bird” booking fee.
What you should be asking is why Mr Rawlings feels the need to chuck away £53 per delegate.
OK but I feel the reason £97 has been chosen because of its numeric value rather than any formula
Ahhh… I see where you’re coming from!
I hope there is a VERY good reason – every quid off the seat price is costing them a potential £640 lost revenue.
It looks like to attract interest in his seminar he is going to ” reduce their fees to globally pathetic levels” no doubt this is due to the cheap “online/hybrid” seminars which customers can do from the comfort of their own office…24/7 maybe. 2018 is probably going to be a tough year for seminars