Estate agency – it’s still about interactions not transactions
04 August 2018
Making my way to our London office on a busy commuter train, my mind got busy thinking about the new do-it-yourself estate agency option offered to property sellers.
I have been clear in the past over being in favour of giving consumer choice and that there is no one fit-all solution.
However, I was trying to think of any product at all - and I mean any - that people can ‘buy’ on the internet. This product would not require: proof of funds, some form of actual immediate commitment, a delivery timeframe, or additional stakeholders to validate and legitimise the purchase, taking up to five months to process.
If you can think of any online transaction that is similar to that of the experience of buying a property please tell me, because I can’t!
Oh, and if you are thinking cars...no, I’ve considered that one - you need to put down a deposit or holding fee.
So here is my thought process…
Amazon, Ocado, Expedia and others, are all hugely successful businesses in the online space merging speed and convenience. People go online and buy because it’s an instantaneous process.
I seek, I discover, I acquire...delivery on average in 48 hours. Although, same day delivery is now possible. Let’s not discuss that a recent survey indicated that returns of clothes and footwear via online purchases are at almost 50%!
These companies have fundamentally changed the retail experience and consumer expectations of service delivery. They need to be in control. It has to be instant, convenient and efficient.
The need for a consumer to visit a high street or superstore to identify a suitable purchase and to take it away with them is no longer the only option. Non-human interaction facilitates the identification of stock, its availability, and delivery function.
But buying a property is simply different. It isn’t retail. It NEEDS human interaction and always will.
And while it is true that the interaction could be directly between the buyer and seller, it removes the element of knowledge and expertise of an experienced and trained estate agent.
Who will make sure that the seller gets the best price for the property? Not all sellers will know how to negotiate. How many sellers will know how to qualify a buyer?
Who will make sure that the sale is progressing, ensuring that there is no break in communication when dealing with chains, which can easily lead to fall throughs?
Who will help buyers find their perfect home? I sold properties to buyers who hadn’t requested to see a particular property because they didn’t like the look of it online, but fell in love when I suggested to take them for a visit anyway.
And so here is the point: Technology is only an evolution in the methods of interaction with customers, not the end product.
Technology doesn’t fulfil the transaction, people do. It may help it as a method of communication in the same way a fax machine did in the 1980s, but it is still a people business.
Agents need to communicate this robustly and articulate the reason why a traditional agent adds value. If you can’t, why should a customer pay more for something that they perceive to be the same or less? And we all know this isn’t the case, but perception is reality. While agents are great at selling properties, they are less so at selling themselves and the benefit of their services to both sellers and buyers.
Let’s remember the famous saying...cost is an issue in the absence of value. So let’s all make sure that we demonstrate the value of our services, our experience and our knowledge.
Finally, on my first day in agency my then boss said to me: ‘Estate agency is 99% people and 1% houses’. This is more true now than ever.
*Iain McKenzie is chief executive of The Guild of Property Professionals