Misery for thousands of home sellers that paid up front to online agencies before collapse.
In light of the collapse of “online agent” Emoov, Tepilo and Urban last week leaving thousands of home sellers out of pocket having paid up front fees (in the same way as the Purple Bricks model uses), it begs the question now as to whether the online agents have had their day, and have home owners had that lightbulb moment?
We should not however wallow in the fact that many people will have found themselves suddenly unemployed especially at this time of year, and our thoughts are with all of those that put their trust in their employer and left jobs to be part of the “Revolution”.
Considering that your home is the biggest asset you will ever own, it appears the consumer market has finally switched onto the fact that your traditional estate agents will protect that asset more fiercely than any online agent can. Yes of course we have a degree of bias, but, we’re not telling anyone anything that wasn’t written on the walls at the very beginning – when so many “onliners” appear over a short space of time their message is diluted, when every ad break is packed to the gunnels with online estate agencies their message is lost and confusing – similar to the way in which online casino’s offer “this, that and the other” but we can never remember which one said what?
We have of course touched upon this in the past, online agents are simply a way to get your property listed on the main online portals such as Zoopla, they rely on heavy marketing spend to attract new business whereas your local estate agent relies on recommendations and word of mouth resulting from the appreciation for the service provided. As an old boss of mine once said – “the only reason a business needs to advertise a lot to get customers is if they’re brand new or completely rubbish”.
What did happen though when the onliners arrived – the traditional estate agents started to compete. Now, the onliners can’t offer the service of a traditional estate agent (no matter how much they claim that they can) but what the traditional estate agents have done is they have started to compete on price – when this happens the onliners need to increase their marketing spend to maintain the levels of business required to make them sustainable… unfortunately the levels of spend also makes their businesses unsustainable, it is the proverbial double edged sword.
Imagine creating an online business then spending £millions every month trying to convince the public that you’re not an online business!!! That makes total sense, and I am sure that the shareholders are delighted at those levels of marketing spend?
So who will be next to go? We all know that Yopa have been kicking it up a gear in 2018, but being bankrolled by Savills and LSL Property means that the pot of gold will run out soon unless they turn things around; and all eyes will be on Purple Bricks later this week as they release their annual trading figures. Their results will make for an interesting reading either way. Who knows where the online estate agency industry will land up in 2019?