The founder of Poundland is entering the estate agency market.
Steve Smith, who started Poundland with one shop in 1990 and sold his share of the business in 2002 for £50m, has become chairman of EstatesDirect.com after investing in it last year.
EstatesDirect.com was started in 2012 regionally, but is now becoming a national property network and has started looking for crowdfunding investment.
The business says it has sold and let over 450 properties in the last two years, and describes its new national venture as a ‘hybrid’ model, selling or letting property online for a fixed fee, while also employing local agents to handle valuations, particulars and viewings.
It says it has franchise opportunities for local agents.
Properties for sale through EstatesDirect.com will be marketed from £195 plus VAT and be listed on Rightmove and Zoopla for up to nine months. Sellers would have to erect their own signs, and do their own viewings, etc. For the premium package, which costs up to £2,490 if the house sells, vendors get agents’ services. A lettings service is offered from £45.
Also in the business is Darren Richards, who founded EstatesDirect. Richards founded Propertyindex, which set out its stall as a major challenger to Rightmove. It launched in late 2008 but went under in 2009, although it continued to run for a while after a management buy-out from the administrators. Richards had earlier sold the dating service he founded, DatingDirect, for £30m.
Ben Grove is managing director. Grove used to work at PropertyFinder and then moved over to Propertyindex.
Also involved in the business is Adam Pigott, a member of the NAEA and fellow of ARLA, who founded Surrey letting specialist CHK Mountford.
The EstatesDirect.com site tells users: “We’ll let you into a little secret … Estate agents are not trying to sell houses through their branch windows nor through the property pages of local newspapers, they are simply advertising their brand to potential home SELLERS to receive more clients and hopefully more of those juicy fat commissions! With EstatesDirect.com your money goes on marketing YOUR property to potential buyers and not on pointless High Street branches and self-promoting adverts.”
As from yesterday, members of the general public can buy equity in EstatesDirect.com through Crowdcube, a crowdfunding platform designed to enable companies to raise venture capital from public investors.
Smith, chairman of EstatesDirect.com, commented: “More than 95% of home movers now search for property online and it is predicted that within a few years, 60–70% of all properties on the market will be listed by online estate agents. Yet we know that home owners and landlords still value the knowledge and service they receive from experts in the field.
“That’s why EstatesDirect.com combines the two. Our online platform means we can sell and let property at a fair, fixed price for consumers, but we also have a number of franchised businesses, licensees and local agents, who provide the expertise and personalised service of a high street estate agent.
“For us, it’s all about giving sellers more control and removing the hefty commission fees associated with the traditional estate agency model.
“We have ambitions to make EstatesDirect.com the UK largest, single branded, personal estate agency network within the next few years, so now is the right time to open the company up to crowdfunding.”
In its pitch, the company says it is aiming to raise £250,000 within 60 days, in exchange for 5% equity in the company. When we last looked, it had eight investors, who had raised £10,640 between them.
Pictured from left are Darren Richards, Steve Smith and Ben Grove
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Just done a quick google street view, their office in Worcester looks suspiciously like an expensive high street office, with the window displays etc, and surrounded by other agents in the street, but according to their website, the only reason agents have a high street office is to promote the brand, and they don’t waste money on expensive high street offices!
Don’t have a problem myself with the online model, and do think that agency will change in the not to distant future, but I do have a problem with dishonesty!
Perhaps there working out of the basement !!
Hold on their asking for £250,000 for a 5% equity stake which values the company at £5m.
I’m off to ring up my mate at the web designers to set up a new website!
It’s a punt at £495+vat a pop as an up front fee.
The owner has a lot of dough, interesting then that their trying to get the investment from others. For such a money spinner surely you would want to keep the equity for yourself no?!
Hmmm… one of these days, one of these offerings might make us not necessarily eat our words – but we may have to chew on a few of them!
Is THIS ‘the one’ – I don’t think so. BUT, as I say ad nauseam, it will find, and no doubt fill, a niche in the market because some people will ‘like’ the look of their offering.
Couple of things about the site – firstly, in the “Why Use Us” section, it states “We actively market your property on all the major property portal sites for the maximum exposure to potential buyers.”, under which it displays a grand array of logos. Would someone mind telling me since when were TPO a portal? Or TalkTalk, Google, VirginMedia or MSN, for that matter…?
Secondly, in the “Testimonials”, good old ‘Mr Magill’ joyfully states “With regard to the cost of sale to us, we have saved at least £5,000 (on a previously negotiated fee with a traditional agent)…”. Interesting, then, how the website calculates the ‘saving’ to him at £11,412!
Well, if ‘Mr Magill’ was happy to entrust his £700000 gaff to a site that looks like its been chucked together by ‘the management’ over a pint or eleven one evening – let’s hope that the ‘saving’ he made was a TRUE saving – not that the ‘more expensive option’ could have got him an extra twenty grand or more.
Yawn…heard it all before remember Tesco’s multi million £ investment in isold and Sarah Beenys ailing tepilo.com. What makes a poundshop retailer think he can do better? Won’t be here in a year is my guess!
Clearly the one golden rule with all these companies is that you MUST slag off agents and there extortionate fees as a pre requisite to being an online agent.
It does get rather boring.
@ Paull – The site doesn’t look like a Realtor site as Realtors offer to broker a listing to more agents to achieve more buyers or tenants through the door to achieve greater exposure and determine a highest offer. Realtors typically charge 5-6% allowing much in the pot to share to fellow agents. The ED model works of budget fees.
Wow yet again a ‘big business man’ believes he has the magic answer to selling houses – the internet and let’s cut out the middle man! The middle man is there for a reason, they really know their stuff and how to sell houses. If you leave these transactions for the general public to deal with they will get tied up in knots and Will likely get much less for their property if it even sells. These people are looking for a fast buck and don’t appear to have a long term business plan for improving estate agency as a whole. To suggest that agents are only interested in swelling their stocks levels is ludicrous as they can only get their ‘juicy commissions’ if they actually sell houses!
Well, this is a laff!
Firstly this is Darren Richards who I recall lost about £6m with propertyindex,
EstatesDirect has hardly ANY stock on RM since it started with multimillion pound backing, why if you are already a multi millionaire would you need another one to invest? The site looks like it should be a realtor site!
The next article will be that Stelios will be investing easyestatesdirect. If they really mean business why dont they open multiple branches in the high street, its not that expensive.
Having just reviewed the article I took the time to visit the estates direct site. This is just part of their proposition to the market;
“We’ll let you in on a little secret… Estate agents are not trying to sell houses through their branch windows nor through the property pages of local newspapers, they are simply advertising their brand to potential home SELLERS to receive more clients and hopefully more of those juicy fat commissions! With EstatesDirect.com your money goes on marketing YOUR property to potential buyers and not on pointless High Street branches and self-promoting adverts.
Always read other Estate Agents’ small print
Did you know that most Estate Agents will still charge you for not selling your property? It’s true. Many traditional estate agents appear to want it both ways. You may think that you have to pay them such high fees because if they don’t sell you don’t pay. Unfortunately this not always the case, if you take your property off the market because your estate agent has failed to sell it, then you could still be stung for around £500 to “cover their marketing costs” or as a “withdrawal fee” and if you sell to anyone else in the next 12 months – another agent, a friend, the milkman – you could still be liable to pay the full commission on your original asking price!
How the likes of RM and Zoopla can be surprised at agenst mutual gaining momentum begars belief…TS