How will 2024 be different to 2023? - Edition 4
It’s the time of year most businesses plan for the coming 12 months… two subjects no doubt near the top of the agenda in most estate agencies strategy meetings will be instruction numbers and fee levels.
Maybe, I can offer a slightly different perspective on these two, for 2024?
Average Fees:
There has been a downward pressure on fees for several years, I believe stat-King Christopher Watkin noted that this actually began in earnest even before the advent of so-called ‘online’ agencies, and with PurpleBricks now offering their service for free, it doesn’t look like this downward drag will change in 2024.
Or… does this depend on who you’re talking to?
Expert marketeer, and contributor to this newsletter, Simon Leadbetter, conducted a brilliant survey earlier this year called the Voice of the Agent, recording feedback from over 500 agents across the country. (You can view the full survey here)
He notes that average fee levels are significantly higher the further up the market you go, even looking at properties at £500,000 and above fee levels were 0.37% higher than sub-£500,000, and this increases even further as you increase the property price…and of course, when you multiply the higher fee with the higher price, it becomes exponentially more rewarding.
If you want to raise fees, why not consider ‘swimming with the tide’ and doing so in the premium market, where this is much more ‘the norm’ than the hyper-competitive residential market.
Instruction Numbers:
‘More is more’, or is it?
A vast register of instructions is attractive, without doubt, and makes for strong brand recognition and a formidable Rightmove pie chart… but I speak to more and more agents who are focussing their effort on fewer properties, at higher fee levels, turning business away that doesn’t fit their profile.
This then becomes even more lucrative, as the overhead bill reduces without the need for such a large team caring for so many clients…and with wage inflation up by 7.9% in the three months to September 2023 according to Statista, many agencies will be ‘feeling the pinch’ and considering their strategies accordingly.
And, of course, if those properties are at higher prices, then those higher average fees become easier to achieve as we mentioned earlier in this article, and the whole outlook becomes much more attractive.
In fact, many premium agents actually restrict the number of properties they take on! So they concentrate their demand, create a waiting list, manage their time and charge accordingly for such an individually tailored service...
So perhaps ‘Less is More’…so long as they are the right properties, at the right price, at the right fee!!
It goes without saying, winning those instructions requires a differentiated proposition, service, and brand, all of which By Design delivers for leading independent agents. If you’d like to find out more, or for a free, confidential, market report on the premium market in your area, just book in a 30 minute Zoom call on our website, https://bydesignhomes.com/join-us/
David Lindley.
P.S. - The Voice of the Agent Survey 2024 is open for entry... click here to participate.
