A property firm which describes itself as the “UK’s leading home selling agent” has raised £500,000 in backing.
BestBid, which displays The Property Ombudsman logo and operates nationally, has an unusual business model.
Although vendors sign a contract with it, BestBid does not actually sell houses. Instead it passes the property to local estate agents, which it says it has already researched.
The website explains: “A simple, quick way to sell your house. One document, one fee, all the agents.”
The sub-contracted agents arrange the viewings and negotiating, but BestBid does the valuation, floorplans and photography, which are then passed on to agents, “enabling us to quickly engage another agent if we need”.
At completion, sellers pay BestBid 1.5% “plus VAT”, and BestBid pays “the agent that delivers the buyer”.
It says most of the fee is paid to the sub-agent.
Other unusual features include no tie-in period, with sellers able to terminate at 48 hours’ notice.
BestBid tells its prospective customers that going sole agency is a “gamble” because the average estate agent only sells 57% of its listings, and 38% of its listings never get an offer: “That’s why we manage multi-agent sale process using the agents with the most buyers. . . Our process generates far more viewings and stops clients getting stuck.”
It starts by instructing one local agent – which it describes as the “best” – but brings in a second shortly afterwards.
In examples given on its website, BestBid says that “more often than not” it is the second agent that produces an offer.
It is not clear how the agents are chosen. Using EYE’s address, we were given a choice of five firms, described as “local agents with the most buyers”.
However one agent is not local and another is not active in our postcode. One local agent, a market leader, is not in the list.
BestBid was founded by Tom Scarborough, who has a financial background, and launched last autumn.
On his linkedin profile, Scarborough describes his venture as “the UK’s first multi-agent vendor . . . Clients sign highly flexible multi-agent T&Cs with us to sell their home anywhere in the UK.
“We use technology to identify the best agents with the most buyers and then ensure the property gets sold.
“We’re opening up the buyer universe for vendors in a simple manner that’s never been done before, ensuring vendors get sold and for the BestBid.”
Its new backers include William Reeve, who co-founded LoveFilm alongside Alex Chesterman who went on to found Zoopla, and venture capital firm Hambro Perks.
Comments (26)
I’m sure there are legs in the model if they are indeed handing out ‘free’ instructions, but as many have said if you are the top agent in your town I am sure you don’t need the fee they are paying. At most I would imagine they give away 1% (inc vat? +vat?) and I would expect they charge, or will look to charge, the agents they ‘partner’ with a subscription fee.
There have been many of these broker type companies over the years. There’s a reason they close and another pops up in its’ place.
All this acrimony towards leeches and middlemen made me chuckle.
Bestbid have the instruction not you. You have nothing. They are offering to share their deal with you, do another chunk of the work in photographs / floorplans, AND, give you the lions share of the fee.
So who is the middleman?
Blue
“They are offering to share their deal with you, do another chunk of the work in photographs / floorplans, AND, give you the lions share of the fee.”
How do you think BestBid are going to get the photos and floorplan to “give” to the Agent(s)?
How do you think they are going to choose the ‘best’ Agent(s) for the job?
Of course the answers to the above won’t have much of an impact on anything, as there is one factor that will determine whether this has anything like legs:
How do you think BestBid are going to attract would-be homesellers to their offering?
Best bid would not get an instruction if agents did not want to work with them.
They take 1.5% plus vat and offer a reduced fee to the agent with the caveat they can withdraw the property.
I would rather deal with the seller and keep the 1.5% plus vat. Cheapens the industry like the agents that sell their soul to ‘GetAgent’
If the best office in the area is 2% plus vat – How will Bestbid get to work with them?
Cheap, nasty, will not be around long and agents that do use them certainly will not be the best in the area as they will not work not need to work with them.
…erm. Unless I have misunderstood this, the starting point is that BestBid already has the instruction.
Isn’t the greatest expense in running a sales agency the wasted ‘cost’ of valuations that come to nothing/viewings on a property later sold by another agent? Some people might also want to factor in the photography costs etc. etc.
I have NO skin in this game, but seeing some comments here, it is clear that if people can’t see this as an opportunity to earn extra money, and still make their normal margins, if not more (!), some agents, if not the traditional model itself (depending on how many insist on plugging their ears and going lalala) are heading the way of the Dodo. No ifs; No buts.
dear PMT
Most estate agents spend about 20% of their energy trying to get new instruction (some spend more time and money doing little else, just to get “market share” in their territory).
As a vendor you will be aware of your local agent, who’s up, who not so hot, who best reflects your property, etc. Of course there are some who would completely ignore all of this and just go on line (hence companies like purple broccoli).
The fact that best bid have one instruction is saying a swallow makes a summer, it does not, best bid would need to invest so much of it’s revenue to generate instructions over and above the existing estate agents in each area it’s not a strong business model. Secondly even if the vendor did sign up to best bid the agent would manage the listing to the point the vendor would simply recommend his friends and neighbours to that agent, completely forgetting best bid in the process.
It doesn’t bode well for best bid unless I’ve missed something here?
Every so often I get an email invitation from various “Leech Property Sales Brokers”, I politely reply that I only do my business direct with clients and I have no interest in acting for a “middle man agency”.
Old fashioned, Yes, no doubt I am, however it seems to have served my clients and myself well over 30+ years.
I’ve stuck by my principles that I am the organ grinder, not the monkey ……so, as smileplease comments above …..if you work with these type of Industry Leeches you deserve to go out of business.
Good luck with explaining and selling this to the general public!
I engaged with The Quirkster last night on this very subject in response to his comment on Tw@tter.
His view:
“Multi agency for a sole agency fee and creates competitive tension by BestBid choosing the best agents to go up against each other. It’s a great idea”
To which I replied
“I would suggest that for all the right reasons, the best agents won’t be playing this game.”
Why would they?
As yet no reply from Mr Q. I’m sure he will get round to it at some point…
The best agents will give this a steer for sure…………
The best agents will indeed give it a steer and those agents that do need this, it will be just another listing so rather than “competitive tension”… there will be plenty of apathy and any sale will be purely down to a Rightmove inquiry.
The best way of dealing with these sort of companies is not to accept instructions from them on poor terms.
If as an industry we pushed back against 0.9% inc Vat fees less an admin fee and more work expected than a standard sale we’d all be better off.
Any agent working with these types of company deserve to go out of business.
£500k ! – they will need a lot more than that.
In an era of having to clarify referral fees, I cannot see on their website how much they make and how much the selling agent makes.
Also their website is breaking the law as fess must be inclusive of VAT and theirs are not.
They saying 1.5% plus VAT.
Which is illegal, the fee display must stated 1.8%.
…it may be ‘best advice’ that fees be stated as VAT inclusive, but it cannot be illegal (possibly unlawful, but then again I am not sure) that fees are clearly stated as being VAT exclusive. If someone who is about to sell their most valuable asset does not know that VAT is 20%, then there is no amount of legislation that will save them from their stupidity.
Besides, I have no doubt that the individual contracts will set out the exact fee due on the valuation amount with warnings that the fee will change depending on the eventual sale price.
UKs leading home selling agent.
Really? Prove it.
Bet that the toothless ASA informally resolve that one in a few months time.
Prediction: this outfit will be gone within two years.
In other industries they would be called brokers.
Where are the instructions coming from?
People thinking of selling.
N.S.S! there is an obvious contradiction in this; the agent best able to sell any particular property is the least likely to sign up to this.
For all the time I have been in or around agency there have been schemes that are a variation of this, such schemes work for agents who struggle to win instructions in their own right. Deliberately eroding or sharing a fee to win business might result in more business but if the fee received isn’t enough there’s no point in reinforcing an agent’s service is available for and is worth less than an agent needs to charge to be long term viable.
My guess is Smile Please will have something to say on this, their opinion will be the litmus test on the viablity of Best Bid
I believe this to be a bit like NetAnAgent without agents needing to compete on fee.
So if they take a small percentage for an instruction then I can see this model having legs.
I would class this model more as an asset management structure opposed to a broker also bordering onto a MLS setup.
I got 1 billion in investment yesterday.
I get £100 for some adwords to see if i get any takers. and then if it works i get a further £99999999.900 off my invester…
If an agent’s core branding is deficient enough to be reliant on instructions from systems like this or to be reliant on search engine results “estate agents in….” or PPC it’s likely the agent has a #local reputation that is necessitating all the sticky plaster solutions.
#local vendors will have an innate awareness of the agents who they’ll get round to value. Its often only when they find something for sale with an agent outside that core awareness does the other agent get to opportunity to pitch for their business.
The reason the passive intermediary listers are wholly reliant on the telly adverts is to have any brand awareness at all. That’s the single main reason disruption has no viable future.