As previously stated, the importance of setting customer expectations for both self-service and full-service options is likely to be critical – both for the protecting the brand and business model. Additionally, underlining the benefits of traditional estate agency and their impact on the eventual sale is key due to the misconception propagated by online agents’ advertising.
The following is table splitting out the two offerings:
The table shows the main difference between the two options is in property transaction management, which is in essence the longest and most difficult part of the sale or purchase. Unfortunately, consumers do not understand or appreciate the amount of work and effort traditional agents do in negotiating and getting a better price. Many are also not aware of the hands-on nature of sales progression and pushing the transaction through to completion.
With online agents’ advertising falsely reducing estate agency to little more than listing the property online, agents also need to show traditional agents’ marketing of the property goes beyond placing a listing on Rightmove and hoping for the best.
While property on the self-service level may also be pushed via marketing emails, the full-service (traditional) involves agents proactively calling active buyers and matching them up with suitable properties. A traditional service agent can also cross pollinate buyers and sellers when they’re carrying out property viewings. Again, this is an option that agents can choose to not offer to self-service vendors and an aspect buyers won’t benefit from as vendors have no other properties to offer.
Any good agent will know that in both instances buyers do often go with properties they may not have initially considered. One high street agent estimated that around 30% of all their sales have been people buying something quite different from their initial specifications. As such, the role of a quality negotiator in putting a buyer and a property together may not be immediately obvious to consumers.
It will likely be important to highlight one of the biggest key differences between the fixed-fee and commissioned-based model: commission incentivises an agent to sell the property at the highest price possible and motivates them to push the transaction through to completion. As a fixed-fee is paid upfront regardless, the same incentive doesn’t exist. Furthermore, in this instance, ensuring the property is sold and for a good price is entirely down to the vendor.
Similarly, Foxtons have managed to create a brand perception among many consumers that they are the estate agency that get the highest price for property. Therefore, the upmarket estate agent has been able to charge more than other agents because many consumers believe Foxtons can deliver what they want the most in the end: the best price for their property.
It’s down to estate agents to help consumers understand and know that they will get the highest price and best service through traditional estate agency enhanced with the best digital innovation that is available to high-street agents. It costs more but has greater value because it delivers the best chance of securing the optimum price and quickest sale.
Delivering that message and that service to consumers is likely the best opportunity to enable agents to offer a fixed fee, self-service option to complete with online businesses – without hurting the commission-based model that’s been, and can continue to be, high street agents’ bread and butter.