Almost half of homes taken off market not sold but withdrawn – losing agents over £4bn in fees

[sancho panza]

More heartwarming stuff from the Pie machine.Looks like the EA's have been burning through the cash only to see people take homes off the market when they 'we'll start it at..' price turns out to be wildly wrong.

And it's the higher priced stuff that's not selling....boomers getting boomed.

DanHareReapit

July 24, 2018 at 17:17 #2

We weren’t able to make that distinction reliably from this data, but whether the properties were relisted with another agent or not, there is a very significant abortive cost being absorbed by agents.

We do have “Disinstructed” as a separate status to “Withdrawn” in Reapit, but that is not always accurately recorded.

 

http://www.propertyindustryeye.com/almost-half-of-homes-taken-off-market-not-sold-but-withdrawn-losing-agents-over-4bn-in-fees/

Almost half – 45% – of homes taken off the market last year across the UK were not sold but withdrawn.

In London, the withdrawal ratio was an astonishing 61%. If you took London out of the equation, the withdrawal rate across England and Wales was 40%.

Even more astonishingly, 38% of the withdrawn properties had actually received an offer.

The potential fee income lost to agents was over £4bn.

The statistics are in a new joint report by Reapit and Dataloft.

The research was made possible by the introduction by Reapit of a management information dashboard monitoring properties withdrawn from sale.

Introducing the new report, called Lost Potential, Reapit CEO Gary Barker said that during testing of this feature, it became apparent that agents had not been measuring withdrawn properties effectively, and many thousands of pounds of agency commission were being lost.

Reapit decided to look more closely at the data, based on over 100,000 properties that were taken off the market last year because they were either sold or withdrawn.

It also commissioned Dataloft, an independent market intelligence business, to establish a benchmark by which agents could assess their own performance.

Barker says: “The findings are quite simply staggering.”

One finding is that withdrawals peaked in July and November last year; another is that higher priced homes were far more likely to be withdrawn.

Below £500,000, sales outweighed withdrawals; above that, withdrawals outweighed sales.

For example, in homes costing between £500,000 and £750,000, just 43% sold and 57% were withdrawn. In the £1m to £2m price bracket, 38% of homes taken off the market were sold, with 62% withdrawn.

The report does point out that the mood of the nation was generally unsettled last year, with a snap election and Brexit dominating the news.

The year could have been exceptional – or typical.

Nationally, London’s high withdrawal rate was followed by withdrawal rates of 47% in the east of England and 44% in the south east.

The withdrawal rate for Wales was 35%, and in Scotland 17%.

The report also offers insight into how quickly properties were withdrawn – an average of 5.5 months. Surprisingly, almost 40% of withdrawals occurred within three months of being listed. However, the report does not spell out whether the withdrawn properties went on to be listed with other agents; nor does it go into detail as to the reason for the withdrawals – although vendor impatience, problems with sales progression, and with chains are all mentioned.

The report points out that such high withdrawal rates do mean that vendors who pay upfront “have a high chance of disappointment”.'

[Wig]

These figures are dynamite. How will the disgusting beeb impart this knowledge onto us grateful plebs I wonder...

 

Market built on lies, fuelled in part by a demographic who have been known to substitute breathing for lying throughout the year.

 

Also this bit 

“Even more astonishingly, 38% of the withdrawn properties had actually received an offer.“

how could this be verified other than through the mouth of an EA? If they’re using the SSTC metric on rightmove with no sale appearing in LR three months later then that figure to me is just another EA-lie-o-meter:

 

Basically NOTHING is selling at these insane prices (only the greatest fools in history still buying etc) so the EAs have to bang a certain percentage of SSTCs out there to create the illusion of a “buy side” so they do a soft recall of a certain percentage of their fantasy listings by removing them via SSTC or worse still the cringeworthy “under offer”

 

The alternative is that this figure is simple EA anecdotal “ what percentage of homes withdrawn from the market had offers on them?” and 38% is the average number plucked out of the air by polled EAs

 

in either scenario this figure is inflated (likely from close to zero) unless I’m missing a scenario where this figure can be in any way accurate or even understated.

 

Anyone sensible who is serious about selling their house can only conclude they need to panic first here 😂😂

[spygirl]

Transaction fell off the cliff 2002ish.

Only to be partially rescued by BTL idiots.

I did try tracking listing to sales.

https://www.housepricecrash.co.uk/forum/index.php?/topic/202565-whitby-oct-13-update/

Gave up.

 

[janch]

Well.........I'm one of their stats.  Sold house using EA and was in a chain of 3.  At the very last minute (I'd even booked the removal van) my buyer got cold feet and tried to "gazunder".  This was after his mortgage offer and most of the legal stuff had been done......we were about to exchange.  The chain collapsed and I decided to stay put for a few months as I couldn't go through all that again straight away.  This was in 2016.

I lost money on the legals but didn't pay a bean to the EA (their point about paying upfront for online is salient).  The EA must have had the cost of listing on RM and time spent chasing people in the chain etc.  Interesting to see what they have to pay out upfront to RM from the article.

[spunko]

8 minutes ago, janch said:

Well.........I'm one of their stats.  Sold house using EA and was in a chain of 3.  At the very last minute (I'd even booked the removal van) my buyer got cold feet and tried to "gazunder".  This was after his mortgage offer and most of the legal stuff had been done......we were about to exchange.  The chain collapsed and I decided to stay put for a few months as I couldn't go through all that again straight away.  This was in 2016.

I lost money on the legals but didn't pay a bean to the EA (their point about paying upfront for online is salient).  The EA must have had the cost of listing on RM and time spent chasing people in the chain etc.  Interesting to see what they have to pay out upfront to RM from the article.

Don't they pay about £1000+VAT a month for Rightmove for all properties, up to a certain number?  I always laugh when EAs whinge about RM's "huge fees", £1200 a month is an investment considering the potential ROI. They'd only need to sell one £150k a house a month to cover it.

[janch]

8 minutes ago, spunko2010 said:

Don't they pay about £1000+VAT a month for Rightmove for all properties, up to a certain number?  I always laugh when EAs whinge about RM's "huge fees", £1200 a month is an investment considering the potential ROI. They'd only need to sell one £150k a house a month to cover it.

You are probably right.....I've no idea.......

[spygirl]

25 minutes ago, spunko2010 said:

Don't they pay about £1000+VAT a month for Rightmove for all properties, up to a certain number?  I always laugh when EAs whinge about RM's "huge fees", £1200 a month is an investment considering the potential ROI. They'd only need to sell one £150k a house a month to cover it.

Well ... thats the rub.

Ask an EA how many sales complete a month.

Looking a the local area, Id guess its less than 4.

[Band]

33 minutes ago, spunko2010 said:

Don't they pay about £1000+VAT a month for Rightmove for all properties, up to a certain number?  I always laugh when EAs whinge about RM's "huge fees", £1200 a month is an investment considering the potential ROI. They'd only need to sell one £150k a house a month to cover it.

That seems remarkably cheap.

Edit - But correct

http://www.propertyindustryeye.com/rightmove-introducing-new-packages-for-agents-at-up-to-1750-per-month-for-each-office/

[sancho panza]

7 hours ago, Banned said:

That seems remarkably cheap.

Edit - But correct

http://www.propertyindustryeye.com/rightmove-introducing-new-packages-for-agents-at-up-to-1750-per-month-for-each-office/

LE2 has something like 20 EA offices and roughly 100 completions per month at an average price of £200,000.Takeaway 10% for the online EA's that's 4.5 per EA branch.@1% that's £9000 but then less RM fees £1750(I think that's the superior package),3 full time salaries @£6k, office rent @£1000 pcm, rates@£500pcm,utilities and expenses,most are relying on lettings to make a profit.

Which will work till 2019

[spunko]

12 hours ago, sancho panza said:

LE2 has something like 20 EA offices and roughly 100 completions per month at an average price of £200,000.Takeaway 10% for the online EA's that's 4.5 per EA branch.@1% that's £9000 but then less RM fees £1750(I think that's the superior package),3 full time salaries @£6k, office rent @£1000 pcm, rates@£500pcm,utilities and expenses,most are relying on lettings to make a profit.

Which will work till 2019

Purplebricks and other online agents are charged lower RM fees apparently. Not sure why, but that's what I've read a few times on PIE etc. None of those other costs you list apply to them either, albeit I'm not sure on their employment situation.

[dgul]

12 hours ago, sancho panza said:

LE2 has something like 20 EA offices and roughly 100 completions per month at an average price of £200,000.Takeaway 10% for the online EA's that's 4.5 per EA branch.@1% that's £9000 but then less RM fees £1750(I think that's the superior package),3 full time salaries @£6k, office rent @£1000 pcm, rates@£500pcm,utilities and expenses,most are relying on lettings to make a profit.

Which will work till 2019

An interesting statistic -- 1 in every 500 working people in the UK are estate agents.  I'm sure that could be cut back a bit.

[Wig]

One in every five hundred working people and four hundred in every five hundred non working people are EAs 😀

[spygirl]

1 hour ago, spunko2010 said:

Purplebricks and other online agents are charged lower RM fees apparently. Not sure why, but that's what I've read a few times on PIE etc. None of those other costs you list apply to them either, albeit I'm not sure on their employment situation.

Bulk discount.

If you have two types of customer s- Reginald Purple Cords type, spending 1k/month. And Purple bricks, spending several millions/month.

Iknow which one will get a hefty discount.

 

1 hour ago, dgul said:

An interesting statistic -- 1 in every 500 working people in the UK are estate agents.  I'm sure that could be cut back a bit.

Socialise in US suburbia.

Every other fucking wife is a realtor - or so it seems.

 

[spunko]

2 hours ago, spygirl said:

Bulk discount.

If you have two types of customer s- Reginald Purple Cords type, spending 1k/month. And Purple bricks, spending several millions/month.

Iknow which one will get a hefty discount.

 

Socialise in US suburbia.

Every other fucking wife is a realtor - or so it seems.

 

Not sure, it's something to do with being online and having preferential rates. Presumably offline agents with loads of offices like Knight Frank would get a discount but don't.  I don't know if it's true or not as I said, but I've long had this suspicion that Rightmove will one day become/buy out an online agency.

[eek]

Unless things have changed over the years Rightmove charge per branch with tiered pricing based on the number of adverts from that branch.

Hence the online agents by only have a single branch (and probably by having an automated listing management system) save money compared to the companies with physical branches.

[spygirl]

3 minutes ago, eek said:

Unless things have changed over the years Rightmove charge per branch with tiered pricing based on the number of adverts from that branch.

Hence the online agents by only have a single branch (and probably by having an automated listing management system) save money compared to the companies with physical branches.

Well, Ill guess they charge per listing.

Selling x listings for x£

[sancho panza]

11 hours ago, spunko2010 said:

Purplebricks and other online agents are charged lower RM fees apparently. Not sure why, but that's what I've read a few times on PIE etc. None of those other costs you list apply to them either, albeit I'm not sure on their employment situation.

RM charges by the Branch.For the online EAs they equate the amount of houses they advertise with an Bran ch equivalence measure...................which is clearly where the discount comes in.EA's always bitching about it.

They have to be careful or PB website will replace them if they don't let them use RM

A far funnier EA bitch fest occurred when Onthemarket insisted on it's initial joiners ditching either RM or Zoopla and then recently allowed newer joiners to stay with both.

RM and Zoopla fees must be circa early £3k pcm.............

[sancho panza]

Denial as ever in the comments

smile please

July 27, 2018 at 15:52 #3

Well the one thing we all know is hybrid / online is certainly not profitable. All of them being propped up with investors funds. 

My agency is debt free, no loans, no overdraft, no investors money. All my staff are paid on time along with suppliers and i live a comfortable life.

I am not alone. Its down to business acumen not about being the cheapest. 

http://www.propertyindustryeye.com/eye-newsflash-fifty-year-old-high-street-agency-with-ten-branches-to-be-wound-up/

A regional high street estate agency that has been trading for 50 years with ten branches is to be wound up.

Howard Cundey, in Sussex, Surrey and Kent, has made nine staff redundant.

The award-winning business, which was bought by its current owners in 2008, will now re-invent itself as solely a hybrid agent – a proposition called Howard Cundey Live, which it launched a year ago.

Howard Cundey Live charges from £599, with an upfront fee of £975 and a pay later option of £1,500. It also offers a no sale, no fee model.

 

[sancho panza]

8 hours ago, eek said:

Unless things have changed over the years Rightmove charge per branch with tiered pricing based on the number of adverts from that branch.

Hence the online agents by only have a single branch (and probably by having an automated listing management system) save money compared to the companies with physical branches.

Agents bleeding profusely.

Pie the gift that keeps giving

htsnom79

July 27, 2018 at 07:40 #3

Not so much hats off, more trousers down and bend over, parasites

Robert May

July 27, 2018 at 07:58 #4

The mathematics of this mean agents are giving Peter Brooks-Johnson  £760 profit  each month before they are putting a  single fork full of food in their own mouth, that is obscene and exploitative, it needs to stop.

Moveaside01

July 27, 2018 at 07:59 #7

If ever there was a case of ‘Biting the hand that feeds you’………………..

Whilst the very industry that props these guys up is going through hardship these boys are having it away and simply laughing in our faces. I long for the day that OTM pulls its digit out and becomes a viable alternative as there will be very little loyalty towards RM, it is an obscene set of figures in the current housing market climate!

It’s the greatest trick the devil ever played, if that’s not too dramatic?

 

 

http://www.propertyindustryeye.com/rightmove-defies-gravity-as-it-announces-another-set-of-bumper-results-with-profits-and-revenues-up/

Rightmove this morning announced another set of bumper results with revenue up 10% and operating profits up 12% for the six months to the end of June. One City analyst, Anthony Codling, said the results “defy gravity”.

It had revenue of £131.1m, compared with £119.5m for the same period last year, and operating profits of £98.2m, up from £87.6m, making its profit margin 77%, up from 76.2%.

Shareholders will be delighted with an interim dividend of 25p, compared with 22p a year ago.

Average revenue per advertiser was also up £76 with the average agent and new homes developer paying £987 per month. Rightmove said it expects its customers to be paying £80 more this full year, compared with last.

Altogether, Rightmove has 20,450 agents and developers using the site. Agents are spending an average of £940 per office per month, but some are spending more: as at June 30, there were nearly 1,500 branches spending £1,250 or more per month.

Despite speculation that agency numbers will have dropped in light of market conditions, this was not so: the number of agency branches subscribing to Rightmove was broadly unchanged at 17,585.

Agents delivered to Rightmove the lion’s share of its income, at £99.3m, up £8.7m year on year.

Rightmove also said site traffic is up 5% year on year, averaging 139m visits per month.

CEO Peter Brooks-Johnson said: “We’re focused on helping our customers succeed by delivering the most significant and effective exposure for their properties and brands and also by being the largest source of high quality leads. 

“In addition, Rightmove helps them drive operational efficiencies through software, tools and support which leverage our unique data and insight across the UK property market.

“The continued stable membership numbers and our subscription advertising model, together with the strength of the Rightmove offer for both customers and consumers, give us confidence in delivering expectations for the current year despite muted sentiment towards the UK property market.”

In this morning’s report to the City, Rightmove said it keeps investing to “deliver the most engaging experience for home movers” and said it had a “culture of restlessness”.

Rightmove also announced plans to sub-divide its shares: a general meeting to be held on August 22 will be asked to approve plans to sub-divide the company’s ordinary shares of 1p each into ten new shares of 0.1p each. Rightmove says this will be good for smaller investors, including its employees who are members of the share scheme.

City analyst William Packer of Exane BNP Paribas, who had been forecasting a 1% decline in membership, said today’s results were “solid”. He said the one small negative was a 6% reduction in enquiries, although this could improve the quality of leads.

Anthony Codling, of Jefferies, said the results defy gravity – again.

He said: “Once again Rightmove has demonstrated the power of its business model.

“Whilst estate agents are facing challenging markets and tightening their belts, Rightmove has raised average prices by £76 to £987 per month and generated underlying operating margins of 77% (which means for every £100 spent by customers, Rightmove generates £77 of underlying profits) and in the face of housing transactions falling and house prices softening, Rightmove is on track to deliver full year price growth of £80 per month.”

[XswampyX]

If only the estate agents had played Monopoly™ as kids, they would know what was happening to them. 

[Bear Hug]

1 hour ago, sancho panza said:

...with an interim dividend of 25p, compared with 22p a year ago.

Isn't that just 1% pa dividend yield?! 

Ignoring that, it's interesting that share price dropped on what looks like positive news overall.

Saying that, I have only ever looked at RM when looking for rentals.

[Bear Hug]

1 hour ago, sancho panza said:

Rightmove also said site traffic is up 5% year on year, averaging 139m visits per month.

Presumably just HPC crew pointing and laughing at BTL shitholes.

[Band]

1 hour ago, XswampyX said:

If only the estate agents had played Monopoly™ as kids, they would know what was happening to them. 

Difference being in Monopoly that one person sought to buy all the property, these fuckers have actively promoted selling property to chain free BTLers for an easy life.

At least theyll be able to use all those transferable skills learned by being an estate agent to work in other professions ... like a hotel porter and pizza delivery driver.

[XswampyX]

4 minutes ago, Banned said:

like a hotel porter and pizza delivery driver.

Police Community Support Officers...

[spunko]

11 hours ago, sancho panza said:

RM charges by the Branch.For the online EAs they equate the amount of houses they advertise with an Bran ch equivalence measure...................which is clearly where the discount comes in.EA's always bitching about it.

They have to be careful or PB website will replace them if they don't let them use RM

A far funnier EA bitch fest occurred when Onthemarket insisted on it's initial joiners ditching either RM or Zoopla and then recently allowed newer joiners to stay with both.

RM and Zoopla fees must be circa early £3k pcm.............

Onthemarket is an appalling website feature and design wise,  it'll definitely be shut down quietly at some point. there's no reason for it in a commercial marketplace.