‘£89 a month for Sky Sports and Movies
.. you must be made of money’, as I nearly split my pint, after my friend told
me what he spent with the Sky.
In this world we live in, in life, all
of us create limitations for what something is worth. Let me explain, I think my
friend is daft because he spends £89 a month on his Sky package, with Sky
Sports and Sky Movies .. he thinks it’s worth it. You might buy the latest 4k
60 inch TV for £2,500 … and you only bought that 40inch HD TV 14 months ago … I
think you are stupid – but you don’t – because you think it’s worth it. I like
certain types of glass antiques, so you might think me paying a couple of
hundred quid on a glass bottle stupid .. but I think it’s worth it
A freshly squeezed cup of orange juice
at a farmers market on the streets of Palma in Majorca in costs a euro (70p
ish), and it's wonderful. The same freshly squeezed juice in groovie Chelsea smoothie
bar would be seen as a bargain at £4 .. nearly five times as much money. Obviously,
I am not discussing the ability to pay nor am I bearing in mind the absolute
value of a glass of juice... because in both locations, it’s still only a glass
of freshly squeezed orange juice.
… but in one location, the seller sells
their juice at 70p and another ...
£4 .. and in both locations people pay, because
they think it is worth it (because no one ever buys anything they don’t think
is worth buying).Something is worth what someone is prepared to pay for it … because THEY (the someone) thinks it’s worth it. .. worth it to them.
So look at property, what is the
difference between a call centre / online / cheap as chips agent charging £795
fixed fee or another charging 1.5% on the same £300,000 house .. just like the
juice .. it’s just the same with our agency services .. they are both being
employed to sell the vendors property (or find a tenant for our lettings
colleagues).
Still thinking I am talking rubbish … if
we are all estate and letting agents and we are all, in a roundabout way
employed to do EXACTLY the same thing (sell the house or find a tenant) ….
Foxtons charges 2.5% + VAT sole agency (don’t believe me – look at their
website) or likes of Savills and Knight Frank charging 1.5%+ sales commissions
on £5m/£10m/£20m properties … whilst easyProperty charge £475 or eMoov at £595.
(looks impressive if you look at at a typical £500,000 London flat where the
boys in green from FoxyFoxton’s would charge £12.5k plus Vodka And
Tonic
Using the average London rent (according
to Zoopla) of £2,958 pcm, how can Foxtons charge 17% + VAT (again check their
website) managed on lettings, meaning the landlord would pay £6,034 + VAT in
fees, whilst uPad would charge £499 + VAT for the same service.
If tenant find is your bag, its £99+ VAT
for tenant find and you do the paperwork with uPad for a very reasonable £189 +
VAT if you want them to do the paperwork as well … back to London’s ‘favourite’
agent and their tenant find service is a very reasonable 11%+ VAT of the annual
rent, meaning the landlord would be charged £3,904 + VAT.
all for the privilege .. I mean, come
on, especially on tenant find … whack it on Rightmove with some decent pics and
it will sort itself out! (harsh but you
know it’s true)
… but people use Foxtons and pay them handsomely, and they pay top dollar for Savills, Knight Frank, Kinleigh Folk’s and Hampton’s for both sales and lettings .. and people pay them .. because they think they are worth it.
Estate Agents … the number of property transactions is at an
all time low .. so you need to start earning more per transaction, not dropping
your fees. So, if you want to charge more .. you have to create value, to make
your estate agency and lettings agency service worth it.
All you need to do is find homeowners
and landlords that do in fact value what you do, who do think you are worth it.
So how do you do that?
Well what is worth and value? Well there
are subtle differences between the two … They are comprehensive terms that
incorporate emotion as well as cost. For example, while that old, chipped vase
handed down to you by your Grandma might only, in reality, be worth a fiver, to
you it might be invaluable and therefore has low worth but high value. Value
can also be used to describe items that don't necessarily have a pound note
value attached to them, like the value of your time.
The magic word here is emotion.
You need people to engage with you, your
brand and your company, so they can tell themselves you are worth it, you are
valuable to them.
The outside personification of your
estate / lettings agency is your estate/lettings brand. Your estate
agency or lettings brand is the set of expectations, reminiscences, stories and
relationships that, taken together, account for a landlord’s or potential
property sellers decision to choose one agent over another. If the landlord
/property seller doesn’t pay a premium, chose your agency or spread the word,
then you have brand value ..meaning your brand is worth nothing
So how do you get inside the head of all these
landlords and potential house sellers, so you can create those good expectations,
reminiscences, stories and relationships?
Easy, just
get those people to pay attention to you and then be interesting (it’s just
same in any aspect of life from trying to woo someone, pitching to a client,
posting on social media.. so how do you do that?
Well, before
I tell you exactly how do it, let me tell you how not to do it. As an agent,
you have one of the most interesting
subjects in the world to the British in your armoury… the property market.
After the weather, it’s the thing the Brits love to talk about most… and what
do you agents go and talk about?
Look at our new branded cars – aren’t they ace
Look at our RightMove stats – we are No.1 – aren’t
we the dogs
Look at what we have sold – aren’t we wonderful
Look at how we have broken our office record last
month – aren’t we worthy
Look at this ESTA award we have won – aren’t we brilliant
Look at our network of offices – aren’t we big and important
Look at our recent awards ceremony – aren’t we good
Have
you ever been to a party and someone constantly talks about themselves? Dull
isnt it? .. but that is what you are doing if you constantly chuck out messages
like the ones above with no variation.
Get landlords and homeowners to pay
attention to you by talking about something they are interested in ….
themselves.
Talk about what their house is worth,
how much it has gone up in value, what is happening to rents and yields, how their
town’s property market compares to the neighbouring town’s. Add in the personal element and tell stories
on how you help people, how you helped a tenant with a spare TV as their poorly
child only responded to C-Beebies, how you have helped landlords buy more BTL
property, how you superhero like, ran from one part of town to the other with
an important document to ensure the chain completed on a Friday at 5 minutes to
CHAPS deadline time.
Thereby you are growing the perceived
value instead of lowering the fee. To be the No.1 agent in your town you don't
need every house seller and every landlord in your town to use your agency. In
fact, if some vendors and landlords start saying "your fees are too expensive", it
is essentially a valuable reminder that you have priced your fees appropriately
for the rest of your clients.
Over time, as movers and shakers within
the town start to take to their heart the higher worth, the higher value (and
higher fee) then the culture starts to change. When landlords and vendors start
to pay more for something like that, it becomes natural (and even critical) for
other landlords and vendors to pay top dollar for you?
So, if all you offer is the same vanilla
service that every other agent offers, then the onslaught of the cheap as chips
on-line agents will eventually catch you up .. as people realise that your
homogenised, cookie cutter and apathetic vanilla grey grey estate agency
service isn’t worth the
1% fee and see the light of the eMoov’s, uPads and PB’s of this world with
their inexpensive sales fees ..
.. or you could change?
You could start to say something people,
people like local landlords and local homeowners, want to listen to .. because if
you want to succeed as an agent, the first thing you need is to get those
landlords and homeowners attention, get them to pay attention to you …(otherwise
you are just another dull dull grey agent, no different to the rest) … and how
do you do that? Easy … tell them a story…
A story that local landlords and local
home owners want to listen to.
… and if you do .. you will have
newspaper editors ringing you up every week, begging you for comment and
thoughts. You could have landlords ringing you up because you haven’t sent them
your latest marketing material (weird I know but read this story of one agent
who had 30 landlords (landlords with
other letting agents) ring him up in one day because they were worried they
would receive the next piece of marketing material
You
will be constantly stopped in the street by people wanting to talk to you about
the property market. You will learn to love the job of estate agency again, you
will turn the constant battle of low stock and low fees to decent listings and
decent fees, you will be able pay your staff more, hire more staff, go on those
holidays, buy the nice house and car ..
… but that requires change .. and people
don’t like change. Don’t worry, you aren’t alone in feeling this way. In fact,
here is a story of an agent in Derby who felt just the same way. This agent grew his agency in the good old
days of 2000’s, growing his agency in 10 years from zero to 900 managed properties by 2010. However,
once the corporates jumped onto lettings after the property crash in 2008/9, he
felt like he was banging his head against a brick wall between 2010 and 2014. Growth
was like pulling teeth and it was a constant battle. Loosing a few, adding a
few .. but the end result was treading water. He was doing more hours and his
work / life balance was starting to be affected…. and over the those four years
(between 2010 and 2014, the net growth had taken those managed portfolio from
the 900 to 950 .. or 12 a year).
… until something changed in early 2014,
he started to adopt the principles set out in this article .. he started
talking about the local Derby Property market to the local Derby people .. and
21 months later, after 4 years of pulling teeth, his managed stock has grown to
1,150 and he employs more staff, and his work/life balance is much better.
This is Daren’s story .. it is a very
detailed 41-minute TV interview, as he talks about his journey from starting
his own agency back in 2000, the hopes, the fears, the dreams he had at the
start. We then move forward to the lean years of 2010 to 2014 and how the
reality didn’t match those early hopes and dreams and finally, when he started
to change the way he portrayed himself and his firm in Derby in early 2014. He
tells you exactly what he did to get those extra 200 managed properties on his
books in 21 months …. so you can follow what he did (.. and continues to do
so).