To hybrid or not to hybrid?
That is the question many estate agents are facing a market place where purple… and the like are changing the landscape and the traditional agent is left with a declining market share and decreasing fees. Do we stick or spin?
I made the decision to spin some time ago and whilst I believe it will be the right decision for my estate agency business I think many agents are in danger of making some huge mistakes by offering their clients a hybrid service.
For example, I know of numerous agents who have tried to go toe to toe with the online big boys on fees without doing their proper research about what is included in their fees and what additional extras clients need to pay. As a traditional agent, the best thing you can do when competing with the online agents is gather the knowledge of what is included in their fees, when they are payable and what extras the client might have to pay. Pass that knowledge onto your client and you might not lose as many instructions to them.
However, the pattern I am seeing from meeting agents up and down the country is that the traditional agent isn’t getting asked out to valuations on many of the properties that come onto the market with an online agent, I call them ghost boards. This is because the client who is considering using an online agent is now only willing to spend around £1,000 to sell his/her property and if they don’t know that you are able to offer a service for that figure they aren’t interested in speaking to you. If you do decide to offer a hybrid service make sure you shout about it, at the very least it will get you through the door and then your lister should be able to sell the service that is most appropriate for the client.
And your services need to be different! This is the big one, you can’t offer the same service you offer for 1.5% for £800, it is not sustainable and your clients will be laughing all the way to the bank whilst your business will be heading for bankruptcy.
When we launched our hybrid model, love2move our idea was to come up with a significantly different offering to our traditional agency model (MovingWorks based in Preston) our offering had to be different because at MovingWorks we can’t afford to sell houses at £895 inclusive of vat, as I’m sure most high street agents can’t. It would represent a huge decrease in our average fee, so we came up with a sales cycle that didn’t involve as much manpower. It cost a lot to put together, but now we have it we have a system that allows sellers to benefit from lower fees, they get less in return, but they are happy as they get the best of both an online and traditional agent. And we want to work with other agents nationally to offer the system to their clients.
We decided to dual brand our concept because the market research has told us that a lot of agents who have introduced a hybrid offering under the same brand are encountering problems. In our area our online brand is love2move with MovingWorks.
If you use the same brand how does your hybrid client know that by paying a portion of the fee they aren’t entitled to the same service as someone who pays a full fee? How do your staff politely tell them that they aren’t entitled to a full sales progression update because that wasn’t included in their fee? The reality is it’s very difficult to differentiate two different services if they are offered under the same brand. Supermarkets prove this with the standard and finest ranges, people are willing to pay more or less and they know exactly what they are getting because of the different brand identity.
And yet Countrywide have done it! My argument is why would I pay you 1.5% when you are offering me a service that looks very similar for £995? Countrywide are hoping that the clients will upgrade to the full service in the future, but skiing uphill is difficult, only time will tell if their business model is successful.
By going hybrid you are likely to be able to extend your area, this is where the online agents are very successful, they list prolifically in areas where traditional agents don’t dominate, so if you are looking to expand your business area offering a hybrid service is a good way to do this. Your hybrid client doesn’t need you to live over the road as he isn’t paying you for face to face contact, don’t make the mistake of making him/her think they are!
If you are considering going hybrid make sure you don’t make critical mistakes that could cost your business in the long run. If you aren’t considering going hybrid, don’t be short sighted enough to think the online agents are going away, they have very deep pockets and they are here to stay, if they aren’t affecting your business yet, good on you. Whatever your position everybody needs to embrace the changes the online agents are bringing into our marketplace and adapt with the times. If going hybrid is right for your business contact us at love2move to find out how we can help you take some market share back from the village people et al.
By Mark Worrall.
You May Also Enjoy
Real Estate Lawyers: Who They Are and What They Do?
Weekly News Roundup – 03/05/24
Rightmove’s weekly mortgage tracker – 02/05/24
Powering Up Your Brokerage: How Real Estate Apps are Transforming the Industry
Breaking Property News – 02/05/24