Jackson-Stops Director of the Cotswolds, David Parris, discusses the challenges facing estate agents in a digital world.
I read with interest during the week comments from the new boss of First Direct, the online banking arm of HSBC. He said that in a world where the largest cab company does not have any cars (Uber), the largest real estate agency does not possess any property (Airbnb) and the biggest news website does not own any content (Fox), the challenges and opportunities affecting the banking sector area appear at first glance to be quite unique. However, they are very similar to our own. In the banking world, 90 per cent of customers use the internet and a similar percentage start their property search online which has given a logical rise to the number of online estate agents. So is there a future for the high street agents or, conversely, the online agents or is there room for both? In a survey that Rightmove undertook last year, the majority of people who were interviewed said they would prefer to deal with a high street estate agent rather than an online one. However, I believe that a residential estate agency is the last industry or profession to offer online capability to its customers. If you think about it, you can book a holiday, hire a car or reserve a table for dinner online, but can you book a viewing online or offer and receive feedback, approve property details if you are selling or sign a tenancy agreement? For the majority of agents, this is a no and I think that this has to change very quickly. It is certainly one of the main areas that we are concentrating on at JSS and expect to be able to launch this year.
High Street Vs Online
In terms of what we do, I believe that we could not be further apart from the online agents. Generally, they have district valuers (although never qualified) covering large areas of a franchised patch as opposed to local experts who occupy high street premises. The local experts have often served a number of years in the area, have seen a complete cross-section of property and know whether being on one side of a valley to another makes a difference. All of this affects the price. When the difference in fees seems at face value to be considerable, very often this could be made up by accurate pricing, trained negotiation and awareness of what is happening in the local marketplace. I think that, for example, a standard investment flat in a block of identical properties can be served by an online offering where pricing is transparent and can be accurate to the nearest hundred pounds. For a detached stone property occupying a village setting, I think there is a long way to go before a time served local expert can be replaced by an online calculator.
