Times have changed for the estate agent, there are no signs to suggest that the property market is going to kick back into life anytime soon. Transaction levels are on the floor, in the good old days of 5-10 years ago we’d have a steady transaction level of 1.5m-1.6m but now this number is down to 500k-600k per year.
So what does this mean for the thousands of estate agents out there? How do they survive when sharing just a third of transactions, they could treble their fees but that’s no easy task considering that many people already feel they charge too much.
If your business is struggling as many agents are at the moment it’s a chance to review your costs and the obvious ones are staffing and location. Some offices have reduced their staff by 50% as there is just not enough work to go round, luxuries such as secretaries and cleaners are being moved on and the workload being shared around a bit more.
The cost of running an office is also a discussion point. Is it really worth being on the high street in this day and age? Many would so no due to the online portals being the main source for potential buyers to look for their next property.
But the one thing that local agents drum into us is their local knowledge and expertise but just because you leave the high street does that all of a sudden mean that you lose all local knowledge and expertise? I don’t think so.
In my opinion there are three ways this could play out, firstly it would be for all the agents to stay put, cut costs and wait for the good times to come back, secondly they could increase their fees further but risk the public looking elsewhere for alternative methods of selling their homes, especially in times when everyone is cutting costs. Finally agents could come away from the high street and even change their business models in order to cover a wider area from one base, we’re hearing more and more about agents going down this route and it could mean the start of a shift in how business is done within the industry.
One thing’s for sure the local agents have got some tough times ahead of them and only the best will survive this tricky market.