A brand-new way to look at UK estate agents – The Property Chronicle
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A brand-new way to look at UK estate agents

The Analyst

A different model is poised to take over the British market, with brands that are personal rather than corporate

If you are looking to buy, sell, let or rent, how important is the brand or reputation of the agent you deal with? And is that about the company or the particular individual you are dealing with? In a fast-changing world, this difference between company brand and personal brand is coming to the fore as new estate agency models enter the market, including many that place the emphasis on the individual agent rather than on an overarching company brand.

The idea isn’t new. In many countries around the world, notably America, the property market is already built around individual self-employed agents, often working alone but supported by an umbrella organisation that provides back-office facilities and services such as administration, compliance, marketing, legal support and training.

So, which is more important? The reputation of a company built up over perhaps decades but that relies on employees to match the brand’s values and standards, or an individual reliant on the sweat from every pore to deliver service on an individual basis? 

The new umbrella agents in the UK, which include American operators such as Keller Williams and eXp Realty, are successfully signing up many dozens of individual agents, all self-employed, to operate under their model – and are doing so based on the premise that the individual agent will retain some 70% of the fee income rather than taking maybe 10% in an employed model. London, in particular, has a number of small, boutique agents, often in the higher price ranges, which operate on a similar basis: a seller’s variant of the many buying agents that exist and who take their fees from the buyer and seek property on their behalf from across the marketplace.

Of course, this comparison between taking 70% or 10% of the fee income is somewhat misleading, as in the latter version the employee is not responsible for any of the business’s overheads and probably has a basic salary and other remuneration elements such as a company car or allowance, pension, sick pay, healthcare insurance and maternity or paternity rights. These are things that self-employed agents will have to cover for themselves. Nevertheless, the comparison is probably between taking 70% of the fee income under an umbrella model and perhaps the equivalent of 30% to 40% of fee income in an employed model.

The real key to success in either set-up is the ability to secure client instructions. An agent without property for sale or to let is dead in the water. The emphasis on personal and ongoing relationships is the other key factor. Working for a strong company increases the amount of leads that present themselves almost automatically, whereas the new personal-brand agents must secure business from their own networks, at least until well established.  

In many instances an agent will have met and developed their relationship with individual clients while in the employ of a company. While any breach of contract here would often be difficult to identify or act upon, an employee leaving an agent to set up on their own under an umbrella agency may, together with the umbrella brand, need to be sensible to avoid finding themselves subject to legal action under post-contractual obligations on data ownership. There have been several successfully enforced examples of former employees who, before leaving their employed positions, thought it a good idea to download their employer’s database of client contacts and have, rightly, found themselves the subject of injunctions and compensation payments. No doubt employers will be tightening up their employment contracts to make it easier to enforce post-contractual obligations. Individuals should also be aware of requirements under GDPR with regard to the use of personal data. 

Assuming an individual can secure sufficient business from prospective clients to produce enough transactions, then the umbrella model may well offer potential benefits in terms of work-life balance and effort versus reward. We all know individuals who are extremely well connected and respected and so already have a strong personal brand, who could undoubtedly make it on their own under an umbrella model – particularly if the central support were to be complementary and robust. However, there are still many high-quality individuals who thrive within a company that supports them in their activities.

The Analyst

About Michael Day

Michael Day

Michael Day is a well-known figure with over 40 years in the property industry (he says he started when he was three!). He is a Fellow of RICS and was the inaugural Chairman of the Residential Faculty. He is also a Fellow of the NAEA and ARLA and holds an MBA from Reading University. Having held Partner and Director positions at A C Frost, Prudential and Connells, Michael formed Integra Property Services in 2003 providing a range of business consulting, mentoring, training and marketing services to the property industry. Regarded as an industry “expert” on compliance, Michael’s courses on Anti Money Laundering, Consumer Protection and GDPR have seen over 1500 delegates attend in the last two years. He has recently launched the Lettings Health Check which is a professional examination of a lettings business and a prescription to deliver a successful future. Working as a quasi NED for many businesses, Michael applies a no-nonsense, pragmatic and practical approach to identifying and resolving business isuues. Integra Property Services won the Silver award in the Supplier of the Year category at the ESTAS in 2012 having won ESTAS in 2006 and 2008. Integra have been finalists in the Supplier of the Year category of The Negotiator magazine awards in each of the last five years. In 2018 Integra was rated Exceptional by its clients and awarded Bronze in the Best Small Supplier category of the EA Supplier Guide supported by the Property Academy. Michael’s 650 plus client list is a “who’s who” of the estate agency world and he is also an experienced judge at many industry awards and a regular contributor to the trade media. The Integra website can be found at www.integra-ps.com

Articles by Michael Day

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