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Embracing change is hard, as Alastair Campbell found during the elction campaign when he mistakenly sent a foul-worded e-mail to the BBC as he got to grips with a new hand-held computer.
But rarely do new opportunities and new technology come together in the property world as they have now, with estate agents and their clients set to be the main beneficiaries.
Look at what some enterprising industry players are doing already:
- London estate agency chain Winkworth is sending property details and a simplified, easy-to-view version of its website to potential buyers who use personal digital assistants (PDAs), hand-held electronic personal organisers;
- Scottish developer Applecross has held experimental internet auctions for two new properties on sale in central Edinburgh. They went to overseas buyers and the firm secured well over the £420,000 guide price for each;
- Savills sends out a regular e-mail newsletter to key clients, favoured buyers and some journalists, giving market reports, new properties on sale and plugs for ancilliary services such as its buying agency;
- Taylor Woodrow and Countryside Properties use video conferencing on a near-daily basis to save time and expense shifting staff around the country to attend meetings;
- Modern City Living, a niche developer, advertises with Google, so its name appears when users search for new homes. The firm reports a significant rise in business as a result.
What these companies have done is recognise that there are cost-effective ways of using technology to improve business while giving themselves a modern image.
However, they remain few and far between. Although estate agents have been successful at recognising how the internet could sell homes, that has now reached a plateau. There has been no technological breakthrough nor new website for some years, and some portals are now moving back to producing magazines to boost awareness.
So what to do?
Why not embrace changes coming in the UK property industry as the chance to adopt new technology in the office, save on long-term overheads and improve the service to clients and, by the way, improve the image of estate agents?
There is a vast amount of new technology available, mostly aimed at helping agents sell properties more attractively, cut overheads and improving service.
These include software to create floorplans on PDAs, send pictures of properties to mobile telephones, create CD-Roms and DVDs of property, put much-improved virtual tours on websites and to trigger automatic email alerts to tenants or landlords when rent is due or routine maintenance must be done.
Combined with this glut of new technology, there are also major opportunities for agents to improve business, such as:
- Home Information Packs
“Agents could do almost all of the organisation of the packs if they wanted to and had the right systems. It needs positive thinking and a really small amount of investment. But don’t hold your breath while they decide whether they’ll do it”, says one estate agency software supplier.
These words show how much extra business agents could win if they broadened their services to include preparing some or all of the HIP. It would mean conducting searches and checking planning permissions – both possible by simple online searches now. Keen agents could train [??] to conduct mandatory home condition reports for each sale, too.
If estate agents do not do this, others will take business from them. Website Rightmove says it will prepare HIPs and at least one high street chain of agents is training staff to do it for its own sellers and those of other agents, too.
Why not get a share of this business now, just as the industry changes?
- Increasing commission for estate agents
Estate agents in the US levy an average of 6% commission on sales, in Denmark 3.5%; in Australia 3% and, in the UK, it varies from 1% to 2.5%.
There are many reasons behind this but in each of the non-UK countries, estate agents extensively use new technology to create multi-listing systems to advertise all or most homes on sale in an area via rival estate agency offices.
The advantages to the public seem obvious. A seller instructs one agent but knows their property is marketed through a range of local offices. A buyer registers with one agent and discovers the whole range of homes on offer. The downside to the public is that fees rise because they have to be shared among all agents involved in the sale.
Despite charging 6% commission, US agents are regarded as the fifth most respected profession in the nation, according to an AOL survey. Why? Because they serve the public well by embracing new technology enthusiastically.
UK agents may respond to all of this, with justification, by saying they perform professionally and profitably now with little new technology and without changing how they work. They are right – but for how long can they survive?
Not only is the sales market temporarily making life difficult for agents (over 120 offices have shut since last autumn claims Rightmove, with Countrywide talking of more redundancies this year following those over the winter) but large numbers of ‘non-agents’ are using new technology to encourage private sales.
Look at the scores of websites that now exist such as www.propertybroker.co.uk, www.homesbyweb, www.findaruin.com, www.homepages.co.uk, www.mypropertyforsale.co.uk, www.thishouseisforsale.co.uk, www.propertyshowroom.co.uk, www.a-quick-sale.co.uk and www.thelittlehousecompany.co.uk. There are dozens of others.
Between them, they help create a private sales market that now accounts for an estimated 6% of all property transactions in the UK without using estate agents.
Within the industry, we know these amateur services are at best unreliable and at worst dangerous[??????]. But new technology means they flourish because the firms and the public are increasingly IT competent and expect rapid, technically efficient service.
On top of that, larger agents and snapping up smaller ones that cannot keep up with technology. In January 2004 the largest 50 agencies in Britain had 4,007 offices between them. By January 2005, the top 50 agencies had 4,421 offices because of acquisitions.
There is little room for complacency in such a competitive market. Nor is there room for simply wishing things remained the same as they were. They aren’t and they won’t be that way again.
A snapshot of estate agents’ opinions suggest they look inward rather than outward.
Recent press releases from agents’ groups have repeated long-held opposition to home information packs, although they became law in November. They have argued that stamp duty was still too high, despite changes in March, and opposed new rental property regulations.
Memorably, two other releases won tabloid headlines for criticising the public. One accused people of wasting agents’ time by viewing homes “blatantly far too expensive for their income” while the other accused “greedy sellers” of pushing up prices.
Perhaps they are all true and justified. But the public these days expect good service in a modern environment and are willing to shop around to get it. The challenge for agents is to provide it.
Graham Norwood has written 21st Century Estate Agency, investigating the technology available to the industry and analysing how agents work around the world. £20, EG Books, 01444 445335 or www.propertybooks.co.uk.
