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You keep asking, so I’m going to tell you how we do it

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Since I’ve been blogging here on Agent Genius I’ve been asked a few times to explain how the UK estate agency model works and so I’m going to attempt to do so and to make it easy to chew I am going to do so in three parts.

Part one will cover our structure and how we work with sellers. Then part two will explain how we work, or don’t work, with buyers. Finally in part three I will explain which are the key differences and how I can see the UK and US models becoming more similar.

There are around 14,000 estate agency offices in the UK which are split between corporate and independent ownership. The corporate companies were traditionally owned by the banks and insurance groups and have grown primarily by acquiring successful independent businesses. There are currently 4 main corporate estate agencies in the UK and between them they account for around 3,000 of the estate agency offices.

The independent estate agency offices are generally smaller chains of offices, the vast majority being single office operations ran by individuals who have learned the ropes as an employed estate agent but wanted to operate their own business and so set up on their own. There are a number of franchise or licensed groups and this sector has seen significant growth in the last decade.

The primary business model, which applies in over 99% of cases, is that of Estate Agency Owner and employed estate agents. The owner pays their estate agency staff a basic salary plus commission based on either office or individual performance.

Within each office there will normally be specific roles such as manager, listers/valuers and Negotiators. The listers will be responsible for carrying out market appraisals on potential new properties that have been booked in by the negotiators. The negotiators key objective is to close deals and this also includes the process of managing buyer enquiries and arranging property viewings.

Show Me The Money

Typical fees charged by an estate agency to a home seller can be anywhere between 1 – 2% so with an average UK property price of £246,000 you can work out the average fee levels.

The average UK estate agent currently has 78 available properties for sale and with a national rate of around 60,000 completions per month (half the number in 2007) they each average 4 completed sales per month.

Typical time on market (median) for unsold properties at the moment stands at 109 days, while the average time on market is 184 days.  Once a sale price is agreed, it then takes another 10-12 weeks for the transaction to complete which compares badly to timescales in the rest of Europe. Fall through rate varies from agent to agent but average at around 20%.

Additional revenues are generated by offering services such as financial services, Conveyancing (Legal work), Energy Performance Certificates and enhanced marketing.

Most estate agents now operate both selling and rental departments, particularly since the market downturn where rental business was the lifeline in many cases. Whereas the rental department was previously considered the poor relation to the sales department, most agents now realize that having a good stock of properties under management can be more than just a valuable security blanket for their businesses and can bring in profits at a similar level or in some cases higher.

So that’ the seller, what about the buyers?  Part Two will follow tomorrow…

I'm a UK property geek and blog at housingdabble.com My day job as Director at The Property Academy involves consulting with property professionals to define and implement best practice in their businesses. We also do marketing, PR and Social Media. We also help them celebrate their success by organizing the Estate Agency of the Year Awards in association with The Times. Have no fear, I've seen the future and it will be.

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23 Comments

23 Comments

  1. Agent for Movoto

    December 7, 2010 at 1:20 pm

    very interesting post! looking forward to the next two installments.

  2. Kelsey Teel

    December 8, 2010 at 1:24 am

    Interesting article, Ben!

    “The average UK estate agent currently has 78 properties for sale”

    This statement was particularly interesting to me because I have seen agents in different parts of Texas who have totally different opinions about listing inventory. In my hometown, the agent I worked with had over 100 listings and took the stance of “the more listings, the better. If I don’t have it listed, someone else will and I’ll lose out on the commission (of course this didn’t apply if the seller wanted to grossly overprice their home or there was no chance of it selling)” On the complete opposite end of the spectrum, the agents I worked with in Austin usually only had around 3-6 listings and preferred it that way, taking the stance of “I don’t want to waste my time or marketing dollars on listings that won’t sell”.

    Which is the right stance? Who knows, I guess it really depends on the market. My hometown is definitely a much smaller city so that obviously has something to do with it. Others factors could include the agent’s preference of working with buyers or sellers and whether or not they have a sufficient support staff to handle a large number of listings. I’d be interested to know how many listings the average US agent has for sale….I think you have just inspired me to do some research!

  3. Erica Ramus

    December 8, 2010 at 4:13 pm

    Ben — Is the banking industry in the UK much stricter than here in the US?

    I have a client in the UK who asked her bank for a printout of her bank balance and they agreed to send it to her in the mail, but whited out her balance. She said she went into the bank to then ask for a printout and they refused to give it to her. Does this sound normal?

  4. Rob McCance @ Atlanta Homes

    December 10, 2010 at 3:27 pm

    Nice post. Interesting differences between the UK and USA.

    1-2% is pretty rough, especially with the small average sales price.

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Business Marketing

Amazon attracts advertisers from Facebook after Apple privacy alterations

(MARKETING) After Apple’s privacy features unveil, Amazon adapts by taking a unique approach to targeting, disrupting revenue for the ad giant Facebook.

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Two African American women work at their desks, one viewing Amazon's advertising landing page.

As a de facto search engine of its own persuasion, Amazon has been poaching ad revenue from Google for some time. However, disrupting the revenue stream from their most recent victim – Facebook – is going to turn some heads.

According to Bloomberg, Apple’s recent privacy additions to products such as iPhones are largely responsible for the shift in ad spending. While platforms like Facebook and Instagram were originally goldmines for advertisers, these privacy features prevent tracking for targeting – a crucial aspect in any marketing campaign.

Internet privacy has been featured heavily in tech conversations for the last several years, and with Chrome phasing out third-party cookies, along with Safari and Firefox introducing roughly analogous policies, social media advertising is bound to become less useful as tracking strategies struggle to keep up with the aforementioned changes.

However, Amazon’s wide user base and separate categorization from social media companies makes it a clear alternative to the Facebook family, which is perhaps why Facebook advertisers are starting to jump ship in an effort to preserve their profits.

This is the premise behind the decision to reduce the Facebook ad spending of Vanity Planet by 22%, a home spa vendor, while facilitating a transition to Amazon. “We have inventory…and the biggest place we are growing is Amazon,” says Alex Dastmalchi, the entrepreneur who runs Vanity Planet.

That gap will only widen with Apple’s new privacy features. Bloomberg reports that when asked in June if they would consent to having their internet activity tracked, only one in four iPhone users did so; this makes it substantially harder for the ad campaigns unique to Facebook to target prospective buyers.

It also means that Amazon, having demonstrated a profound effectiveness in targeting individuals both pre- and post-purchase, stands to gain more than its fair share of sellers flocking to promote their products.

Jens Nicolaysen, co-founder of Shinesty (an eccentric underwear company), affirms the value that Amazon holds for sellers while acknowledging that it isn’t a perfect substitute for social media. While Nicolaysen laments the loss of the somewhat random introduction charm inherent on Instagram, he also believes in the power of brand loyalty, especially on a platform as high-profile as Amazon. “The bigger you are, the more you lose by not having any presence on Amazon,” he explains.

As privacy restrictions continue to ramp up in the coming months, it will be interesting to see how social media advertising evolves to keep up with this trend; it seems naive to assume that Amazon will replace Facebook’s ads entirely, tracking or no tracking.

Apple's privacy landing page showing iPhone users ability to shut off location services and a desktop image of a user's ability to control how their data is managed.

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Business Marketing

How many hours of the work week are actually efficient?

(BUSINESS MARKETING) Working more for that paycheck, more hours each week, on the weekends, on holidays can actually hurt productivity. So don’t do that, stay efficient.

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Clock pointed to 5:50 on a plain white wall, well tracked during the week.

Social media is always flooded with promises to get in shape, eat healthier and… hustle?

In hustle culture, it seems as though there’s no such thing as too much work. Nights, weekends and holidays are really just more time to be pushing towards your dreams and hobbies are just side hustles waiting to be monetized. Plus, with freelancing on the rise, there really is nothing stopping someone from making the most out of their 24 hours.

Hustle culture will have you believe that a full-time job isn’t enough. Is that true?

Although it’s a bit outdated, Gallup’s 2014 report on full-time US workers gives us an alarming glimpse into the effects of the hustle. For starters, 50% of full-time workers reported working over 40 hours a week – in fact, the average weekly hours for salaried employees was up to 49 hours.

So, what’s the deal with 40 hours anyway? The 40 hour work-week actually started with labor rights activists in the 1800s pushing for an 8 hour workday. In 1817, Robert Owen, a Welsh activist, reasoned this workday provided: “eight hours labor, eight hours recreation, eight hours rest.”

If you do the math, that’s a whopping 66% of the day devoted to personal needs, rather than labor!

Of course, it’s only natural to be skeptical of logic from two centuries ago coloring the way we do business in the 21st century. For starters, there’s plenty of labor to be done outside of the labor you’re paid to do. Meal prep, house cleaning, child care… that’s all work that needs to be done. It’s also all work that some of your favorite influencers are paying to get done while they pursue the “hustle.” For the average human, that would all be additional work to fall in the ‘recreation’ category.

But I digress. Is 40 hours a week really enough in the modern age? After all, average hours in the United States have increased.

Well… probably not. In fact, when hours are reduced (France, for instance, limited maximum hours to 35 hours a week, instead of 40), workers are not only more likely to be healthier and happier, but more efficient and less likely to miss work!

So, instead of following through with the goal to work more this year, maybe consider slowing the hustle. It might actually be more effective in the long run!

This story was first published in January 2020.

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Business Marketing

Jack of all trades vs. specialized expert – which are you?

(BUSINESS MARKETING) It may feel tough to decide if you want to be a jack of all trades or have an area of expertise at work. There are reasons to decide either route.

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jack of all trades learning

When mulling over your career trajectory, you might ask yourself if you should be a jack of all trades or a specific expert. Well, it’s important to think about where you started. When you were eight years old, what did you want to be when you grew up? Teacher? Doctor? Lawyer? Video Game Developer? Those are common answers when you are eight years old as they are based on professionals that you probably interact with regularly (ok, maybe not lawyers but you may have watched LA Law, Law & Order or Suits and maybe played some video games – nod to Atari, Nintendo and Sega).

We eventually chose what areas of work to gain skills in and/or what major to pursue in college. To shed some light on what has changed in the last couple of decades:

Business, Engineering, Healthcare and Technology job titles have grown immensely in the last 20 years. For example, here are 9 job titles that didn’t exist 20 years ago in Business:

  1. Online Community Manager
  2. Virtual Assistant
  3. Digital Marketing Expert
  4. SEO Specialist
  5. App Developer
  6. Web Analyst
  7. Blogger
  8. Social Media Manager
  9. UX Designer

We know that job opportunities have grown to include new technologies, Artificial Intelligence, Augmented Reality, consumer-generated content, instant gratification, gig economy and freelance, as well as many super-secret products and services that may be focused on the B2B market, government and/or military that we average consumers may not know about.

According to the 2019 Bureau of Labor Statistics after doing a survey of baby boomers, the average number of jobs in a lifetime is 12. That number is likely on the rise with generations after the Baby Boomers. Many people are moving away from hometowns and cousins they have grown up with.

The Balance Careers suggests that our careers and number of jobs we hold also vary throughout our lifetimes and our race is even a factor. “A worker’s age impacted the number of jobs that they held in any period. Workers held an average of 5.7 jobs during the six-year period when they were 18 to 24 years old. However, the number of jobs held declined with age. Workers had an average of 4.5 jobs when they were 25 to 34 years old, and 2.9 jobs when they were 35 to 44 years old. During the most established phase of many workers’ careers, ages 45 to 52, they held only an average of 1.9 jobs.”

In order to decide what you want to be, may we suggest asking yourself these questions:

  • Should you work to be an expert or a jack of all trades?
  • Where are you are at in your career and how have your skills progressed?
  • Are you happy focusing in on one area or do you find yourself bored easily?
  • What are your largest priorities today (Work? Family? Health? Caring for an aging parent or young children?)

If you take the Gallup CliftonStrengths test and are able to read the details about your top five strengths, Gallup suggests that it’s better to double down and grown your strengths versus trying to overcompensate on your weaknesses.

The thing is, usually if you work at a startup, small business or new division, you are often wearing many hats and it can force you to be a jack of all trades. If you are at a larger organization which equals more resources, there may be clearer lines of your job roles and responsibilities versus “the other departments”. This is where it seems there are skills that none of us can avoid. According to LinkedIn Learning, the top five soft skills in demand from 2020 are:

  1. Creativity
  2. Persuasion
  3. Collaboration
  4. Adaptability
  5. Emotional Intelligence

The top 10 hard skills are:

  1. Blockchain
  2. Cloud Computing
  3. Analytical Reasoning
  4. Artificial Intelligence
  5. UX Design
  6. Business Analysis
  7. Affiliate Marketing
  8. Sales
  9. Scientific Computing
  10. Video Production

There will be some folks that dive deep into certain areas that are super fascinating to them and they want to know everything about – as well as the excitement of becoming an “expert”. There are some folks that like to constantly evolve and try new things but not dig too deep and have a brief awareness of more areas. It looks safe to say that we all need to be flexible and adaptable.

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