Thursday, February 28, 2008

Some thoughts about estate agents

(I found and saved this image a while back, but lost the credit info. If it's yours and you'd like credit, or want me to remove it, then just let me know. Thanks)

I've just moved house so got to thinking about estate agents and the housing market in general. I rent a flat in South Manchester (Didsbury) and have done for the last 3 years nearly. Prior to that I rented in the city centre. In that time I've encountered a heck of a lot of estate agents. I've viewed dozens of places, been to a variety of agencies and rented from several of them. This experience has led me to the following conclusion...

Estate agencies are broken.

This seems counter-intuitive because they've been doing really well in recent years obviously, but I think it's fair to put 90+% of this success down to the unrelenting growth of the housing market, not their ability. Harsh I know, but I can genuinely say that I have never encountered what I'd regard as a 'good' estate agent. In fact it's rare to find even a competent one. Anecdotal evidence seems to suggest I'm not alone in my thinking.

This poor showing by agencies is surprising given their long history and traditions. What baffles me more though, is that not one agency (that I’ve heard of) takes advantage of the situation by acting differently, thereby building a stronghold in the market.

Maybe all that's needed is a spark to light the creative fires though, so should an estate agent be reading this and be ready to make some changes, here’s my 7 tips for future success.

1. Now that the housing boom seems to be tapering off you need to get back to focusing on people, predominantly your clients (and to some degree your employees – see point 4). From tomorrow morning, 9am, every person that walks through the door or phones you up is seriously important, because as things get worse, it’s going to start happening less and less. Consider everything from first impressions (hint – tidy up), to how you answer the phone to the comfort level of the chairs.

2. You used to create a lot of stress (convincing people to move house, one of the most stressful life events alongside divorce and bereavement). Now you should seek to minimise it, by ensuring their sale or move is painless. People are worried about the market and worried about the deal they’re making/getting. Be useful, be reassuring and most of all be honest and you'll have calm clients, ready to work with you.

3. Smarten up your act. It’s not okay to have a property list or pictures in your window that are weeks out of date. It’s not okay to promise a certain number of viewings and fail to deliver. You need to show your business in the most professional light possible because the gold rush is over and the people that still want to move house want to do so with someone they trust, not just the first agency they come to on the high street.

4. Get your people to smarten up their act too and give them the incentives to do so. I‘ve never been shown round by an agent who knew what council tax band a property was in. I’ve met some agents who didn’t even know what the rent was or when the place was likely to be available. From now on, this is unacceptable.

Make it worth their while to change their attitudes and habits. Bonuses could be paid on good feedback (see point six), or other benefits given (e.g. days off) if cash isn’t an option. Houses have sold themselves for the last few years, now your people need to learn to sell houses. Make up a ‘cheat sheet’ for each property on your books, with obvious information like rent and council tax and not so obvious stuff like good local bars, restaurants, schools etc. Encourage your people to learn this stuff but if they have to take the sheets everywhere and read them verbatim it’s still better than the standard blank stare they usually deliver when someone asks a question.

5. Change your tone of voice. Take a look at your sales and marketing copy. If it’s aggressive, outdated, or contains any jargon, then change it (or pay someone to change it). From now on you’re all about trust, transparency and expertise. Your copy should say “We know times are tough but we’re all in this together”. Reassuring clients is a priority.

6. If you don't know what it is that will reassure your clients, because you don't know what they want, then start asking them! Get permission to survey your clients before, during and after their move (particularly after; it baffles me that estate agents don’t contact people a couple of weeks after the move to see how things are going). Importantly, if you decide to ask for information from people and the feedback says changes are needed, then you’ve got to make those changes, even if they seem scary.

7. Be remarkable. This one is a winner no matter what business you’re in, but I think estate agents particularly could benefit from some good word of mouth. If you’re the only agency in town that focuses on people (because the rest of them are focused on what people carry in their wallets) then trust me, people will talk about you. Those people, the talkative ones, will be your salvation. Watch as they drive their friends, family and colleagues (all potential buyers and sellers) to your agency and then start the whole process again, recruiting these new folks to your word of mouth army with more fantastic performance.

If the market folds then it will be a scary time for estate agents, no doubt. I picture bands of them, roaming the streets, desperate for a house to sell, going feral due to lack of business. But remember, it’s an even scarier time for buyers and sellers too, which means it’s an exciting time for estate agents.

People still need estate agents (everyone I know who doesn’t own a place still wants to buy, despite the predicted problems), they’re just going to be far more picky about who they do business with. The opportunities are there for agents going forward, but only those agents who embrace the changes in the market. If you're one those agents with a worried eye on the future and the above helps get your thinking on the right track, then I’m a happy camper renter.

[UPDATE: A few hours after posting this I was going through my feed reader (not done that for way too long, 1400+ new items, ouch!) and found this from Seth, with his advice for the US real estate market. Good advice and well worth a read.]

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