1,978 home-owners* in West Cornwall made one of the worst property decisions in their lives last year…
They chose some of the most ‘successful’ agents in the area to market their homes
If you’d like to know what that mistake actually means and why you are statistically likely to make a similar mistake when you come to put your home up for sale or rent, you might want to invest a few minutes of your time and read this article. It could save you a lot of time, heartache and, possibly, even make you financially better off too.
The three key requirements most sellers have is;
1. to find a buyer
2. in a reasonable time and,
3. at a great or, at the very least, a fair market price.
All agents should be working for you towards that aim.
Let me start by saying that in 2014, my market share** of newly marketed homes in West Cornwall was just 1.5%. My largest competitor had 12.5%.
That firm, along with the other five main agents, accounted for 45% of all newly advertised properties in the area between them. Volume and turnover of property is crucial to their profits.
A higher chance of finding a buyer?
However, having taken on 45% of all new instructions you might reasonably have expected them to account for around 45% of all completions (sales). But, here’s the thing… these firms only accounted for 32%.
True, hundreds of people still sold their homes through these agents (more than my firm sold) but several hundred of their customers’ homes that, logically, statistically, should have sold… Didn’t. In retail, this sort of loss is called ‘wastage’.
For every 100 homes our competitors were given to sell last year they only found buyers for less than 60 (My clients, on the other hand, enjoyed a 75% success rate)
Despite this unfortunate (for the customers involved) loss, the volumes of scale these firms command make for great advertising and marketing war-chests so, again, you might expect the buyers for the sales that are agreed to be found more quickly and efficiently than by smaller agents.
So their customers sold more quickly then…?
The average time spent on the market until sold for the customers of the big five was a tad over 17 weeks. The area average for all agents was two weeks less. The best time? Just under 7 weeks (6.6 to be precise). Once again, customers who had chosen some of the best known names in the area had lost out.
It can be dangerous to make comparisons between asking prices and selling prices for a whole host of reasons as I’ve mentioned previously in this blog post. That said, with those caveats declared, the figures taken at face value, will not make comfortable reading for the agents involved and, even less so for the owners of the properties that may have been affected. The average selling price of the big five was 89.6% of their average asking price. The closest average sold figures to the average asking price in the area was 97.9% – a potential average loss to customers of over £16,500***
“…life’s most successful people don’t just blindly follow a crowd. They look at alternatives.”
Why did so many people get it so wrong?
Most people chose those firms because they appear successful and as humans we are hard-wired to follow a crowd. But life’s most successful people don’t just blindly follow a crowd. They look at alternatives. They consider other options that may be more beneficial to them and their families, even if that means breaking with convention and moving away from the apparent comfort of the herd.
I’ve been selling property and training estate-agents for over a quarter of a century now and I believe I’ve consistently shown that having a smaller, manageable, register of clients means a team can provide a better standard of service and, achieve far better results for those clients as a result. Chris Wood
I welcome feedback so please feel free to leave constructive criticisms or ask questions below. If you could also take a second to rate my blog and pass it on to others who you think may find it interesting that would be great. Thanks.
About Chris Wood: Chris is an estate agent with over 25 years of property experience. His business, PDQ Estates Ltd is based in Penzance and Helston, West Cornwall and was included in the Daily Telegraphs’ list of the UK’s top 20 best small estate agents “who go above and beyond to help their customers” in 2013.
No stranger to the media, he has appeared on various programs including BBC, News 24, ITV, independent and BBC radio and is a regular contributor to trade journals, local and national Newspapers. Chris is on KloutLinkedIn Ecademy Facebook and Twitter – In his spare time; Chris likes to keep fit and was a long-standing member of the Territorial Army.
In 2010 he mobilised for a tour of duty in Afghanistan with 1 Rifles as part of 3 Commando Brigade but was medically evacuated back to the UK before deploying to his forward base with his unit and is now medically discharged from the army.
*1,978 of those people who put their property up for sale last year; not all property owners. Sorry, we used a statistical sleight of hand to catch your eye in the sub-headline but, we hope you’ll forgive us. Thank you. By the way, if you are reading this, the chances are that you are one of the wise minority of people who actually take time to research their agents before they appoint one and, read the small print before signing any contracts. Even if you decide not to use PDQ after reading this, we humbly applaud your perspicacious character.
**Market data taken from agents advertising on Zoopla for all of 2014 for the West Cornwall area
*** based on an original notional average asking price of £200,000