Friday is amongst us, meaning only one thing………. Blog time! Read on to find out more about the divide between online and traditional estate agency, the myth that is “cash buyers only”, some fantastic news for one of our directors and an insightful piece from our friends at The Swansea Building Society. Emoov chief calls for radical 'blend' of online and traditional agency models – Source: Estate Agency Today The chief executive of Emoov, Russell Quirk, has suggested that the unexpectedly low take up of online agents may mean that it’s time to propose a compromise future estate agency model combining elements of digital and traditional operations. In an article on LinkedIn he says ‘pure’ online and High Street models are now out of date, and likens them to ‘radical left’ and ‘traditional right’ politics - neither is appropriate for the modern world and a centrist alternative is required, he suggests. “The current online model is generally tainted by allegations of there being no incentive to sell given its charging model and a perception that service levels are 'basic'. This latter charge has been levied by High Street agents keen to show that their higher fees are justified in return for a better outcome” says Quirk. However, he concedes that this is in fact “a decent argument” against some onliners who are working merely as a listings operation rather than a true agency business. He hints that the basis of much online agency marketing - involving his estimate of £40m spending a year for Purplebricks, his Emoov service and Yopa combined - is unsustainable. “On the other hand, high street agents are also caught by perception. A perception that they do little and charge a lot. This, in an Amazon world, is also unsustainable. A '9 to 5' approach and an opaque transaction is the antithesis of what the internet generation now insist upon. … A £3,000 bill that's based upon the necessity to cover office costs when the office is less necessary nowadays?” he questions. Instead, Quirk - at one time a fierce defender of online agents - is now suggesting that the estate agency of the future is “a blend of these things. He says there could be the credibility and trust of a High Street brand “with a semblance of a branch network to provide that visible comfort” - but without the scale of rent, rates and refurbishment costs that go with an old-fashioned concept of a large network of offices. “The next generation estate agency model is not low service, upfront fees, nor expensive and unnecessary high street premises that few visit. It is a mix of the established branch approach, albeit diluted, at a justifiably healthy fee and one where an understanding of being able to grow market share but without the suffocation of a 1980's physical branch ethos, is key” Quirk insists. But he insists that such a combination is extremely difficult to execute successfully - and he says the evidence is the similar experiments undertaken by Countrywide (“catastrophic”) and easyProperty (“a franchise disaster). “My suggested utopia is one of healthy revenues and lower agency overheads - bigger margins and a sustainable P&L. But being clever about it. And agile. And unconventional. With a challenger online brand bolted on in order to capitalise as this sector grows but whilst sharing the broader infrastructure of a parent company” he concludes. Confused about what’s best for you? At Foursquare, we’d be delighted to recommend a quality estate agent where you live, and help you understand the differences between online and high street options. We have relationships in many areas of Wales and the South West of England and would be happy to recommend an agent to meet your needs. Case Study “The property is not mortgageable!” Peter and James hear this from estate agents time and time again, yet in the last 10 years, those parameters have changed drastically. As an example, in the last 3 months, we have completed a remortgage on a barn with no heating, water or electricity supply and we have also arranged bridging finance (click here) on a property that was bought at auction with no bathroom or kitchen, and was a real fixer upper! The project is now underway and as soon as the property has been refurbished, the client will have access to high street mortgage products, but was able to buy the property at auction with only a 30% deposit. The truth of the matter is that traditional estate agency businesses who have an in house mortgage broker are often tied to a panel with 15 or so lenders available to them. They can go off panel to a somewhat wider field, but the off panel offering isn’t truly whole of market due to various restrictions. So agency managers rely on their mortgage broker to sign off on whether they can get a mortgage on the property or not. As these brokers aren’t truly whole of market and don’t have access to many of the specialist finance providers who will look at this type of security, often the property is listed as “cash buyers only”. If you are a property investor, looking to buy properties that you can add real value to, please get in touch, or if you are an independent estate agent or auction house that wants a whole of market approach to the “mortgageability” of a property, please email us on info@foursquarefinancial.co.uk. You’d be surprised at what you can get a mortgage on! Company News As previously announced, Benjamin Walker began his role this week as our client manager. He’s taken to the role like a duck to water, and all of our clients will be hearing from him in the not too distant future. We will also be excited to announce some new partnerships in the next few weeks. Peter and James have been working hard behind the scenes to ensure that Foursquare Financial Ltd will be front and centre of the communities we work within. Keep your eyes peeled! Finally, it is with great pleasure we are able to confirm that James has been officially signed off at competent adviser status (CAS) with our network. James retrained from an estate agency role when the business started, and in the last year has had to take 3 degree level exams and have every case he has submitted checked by our in house compliance team and has come through with flying colours. CAS is a huge milestone in any mortgage or financial advisers career, so thanks to all at the network and within Foursquare HQ who have helped James on his journey. From Our Network – Richard Miles, Swansea Building Society |
nOTE:Any content on this page should not be constituted as financial advice. For suited advice around a particular product, please visit our contact us page. Archives
March 2020
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