If you are looking to buy, sell, let or rent how important is the brand and reputation of the agent you deal with?
Is that brand and reputation that of the company involved or the individual that you deal with?
In a fast-changing world, this difference between company brand and personal brand are coming to the fore as new estate agency models enter the market, many where the emphasis is on the individual agent rather than an overarching company brand.
The idea isn’t new and, in many countries around the world, perhaps most notably America, the property market is based around individual self-employed agents often working alone but supported by an “umbrella” organisation who provide “back office” facilities and services such as administration, compliance, marketing, legal, training etc.
So, which is more important and successful? The brand and reputation of a company that may have been built up over decades but which then relies on employees to deliver the services to match the values and standards portrayed by the brand, or an individual who is reliant on the sweat from every pore in their body to convey and deliver service on an individual basis.
The new “umbrella” agents in the UK which include American operators such as Keller Williams and ExpRealty are successfully signing up many dozens of individual agents, all self-employed, to operate under their model and are doing so based on the premise that the individual agent will retain some 70% of the fee income rather than taking maybe 10% of the fee income in an employed model.
London, in particular, has a number of smaller “boutique” agents, often operating in the higher price ranges that operate on a similar basis. A seller’s variant of the many buying agents that exist and who take their fees from the buyer and seek property on their behalf from across the marketplace.
Of course, this comparison between taking 70% or 10% of the fee income is somewhat misleading as in the latter, the employee is not responsible for any of the business’s overheads, probably has a basic salary and other remuneration elements such as a company car or allowance, pension, health care, sick pay, maternity or paternity rights etc. Things the self-employed agent will have to cover for themselves. Nevertheless, the comparison is probably between taking 70% of the fee income under an “umbrella” model and perhaps the equivalent of 30-40% of fee income in an employed model.
The real key to success in either set up is the ability to secure client instructions. An agent without property for sale or to let is “dead in the water.” The emphasis on personal and ongoing relationships is the other key factor.
Working for a strong company and brand probably increases the amount of “leads” and opportunities that present themselves almost automatically whereas, certainly until well established, the new “personal brand” agents are going to have to be able to secure business from their own networks.
In many instances an agent will have met and developed their relationships with individuals whilst in the employ of another agent. Whilst often difficult to identify and enforce, an employee leaving an agent to set up on their own under an “umbrella” agency may, together with the “umbrella” brand, need to be sensible to avoid finding themselves subject to legal action under post contractual obligations on ownership of data.
There have been several successfully enforced examples of former employees who, before leaving their employed positions, thought it a good idea to downloaded their employer’s database of client contacts and have, rightly, found themselves the subject of injunctions and compensation payments.
No doubt employers will be tightening up their employment contracts to be better able to enforce post contractual obligations and individuals should also be aware of requirements under GDPR in regards the use of personal data.
Assuming an individual can secure enough business from prospective clients to produce enough transactions, then the “umbrella” model may well offer potential benefits in regards work/life balance and effort vs reward.
After all, we all know individuals who are extremely well connected and respected and therefore have already created a strong “personal brand” and who could undoubtedly “make it on their own” under an “umbrella” model, particularly if the central support is complimentary and robust. However, there currently remain many high-quality individuals who thrive within a company and with a brand that supports them in their activities.
The future of UK estate agency is however undoubtedly changing and the recent Regulation of Property Agents (ROPA) report which the Government has accepted will see the need for all agents to be individually qualified, regulated and licensed. Once implemented and understood by the consumer, this could potentially help the “personal brand” model emerge as a significant and credible one in the marketplace. It is also likely to see consumer fees increase based on higher levels of service and performance.
One thing for certain is that the “traditional” company brands and “High Street” models of estate agency are under threat. The first wave of online operators who spent big to grow name awareness and market share only got it partly right with low fixed fees and local property experts who were often anything but. Many have already been consigned to the dustbin of estate agency history. Many in “traditional” operations may be complacent in thinking they have already seen off the new competition, but they are wrong.
The next generation of “personal brand” agents will not need expensive “High Street” offices or large volumes of transactions in order to cover local and company overheads. They will be fleet-footed and agile. A more flexible approach to working hours will evolve that suits both agent and consumer and improving 24/7 technology will underpin operations.
Forward looking existing brands will undoubtedly look to stay ahead of the curve by reinforcing existing brand values and introducing new methods of operating and remunerating within their existing company structures. This will not be easy as the legacy of existing set ups could be costly and difficult to change.
The battle lines in estate agency are constantly being drawn and redrawn and there will, no doubt, be many more battles before any war is won on what business models are the way ahead.