Last month in the UK an industry blog called Estate Agent Today (www.estateagenttoday.co.uk) started a visitor poll asking agents if they were going to renew there subscription with the UK’s leading website, rightmove.co.uk.
That poll revealed that 75% of UK agents would not renew their subscription with the portal when they fell due. This has lead to many weeks of hot discussion in the UK ultimately resulting in some massive changes in their industry.
Could a similar situation arise here in Australia if agents were forced with rises in fees in trying times by one of the major portals? In Australia realestate.com.au is in a similar position and has made it clear they will be increasing fees significantly.
Firstly, to put this in perspective, as Simon Baker commented on his site PropertyPortalWatch, anybody could complete the poll. This meant that the results were not going to be an accurate representation of exactly who would cancel. It revealed more the underlying sentiment of the industry and since then UK agents have been extremely vocal about the way they have been treated.
The agent complaints centre on two major issues, Rightmove’s fee structure and their attitude towards agents. Sound familiar?
Many agents started to advertise their rental properties more so Rightmove went for the jugular going so far as to increase rental advertising costs by 30% in the past year. It is no wonder that they lost 500 agents in July and has been losing around 300 agents every month since.
The Global Financial Crisis has put pressure on everywhere and since the results of this poll became public the roll on effect has snowballed.
Rightmove.co.uk have announced that 20% of their staff are being laid off.
Membership to an industry cooperative called the Estate Agency Buying Group (www.eabg.co.uk) quickly surges to 1600 trying to put pressure on rightmove.co.uk and all paid portals to reduce their fees.
Rightmove’s share price has been slammed particularly hard as it tumbled to 18% of its value since March 2008 and there is now rumours of a takeover.
Rightmove issued a press release stating :
- A reorganisation of the existing estate agency sales force and customer service teams into account management teams, each covering a region of the country.
- Greater focus on the national and regional house builders as well as the growing housing association market, with less focus on more speculative individual developments and property conversions.
- A scaling back of the Rightmove Overseas business to reflect a decreased demand for property in continental Europe.
- Exiting from direct selling of banner advertising on the Aboutmyplace mapping website reflecting the general excess capacity for on-line generalist banner advertising.
- A general reduction in overheads in line with the tough trading conditions being experienced by the property industry as a whole.
Rightmove has announced increased marketing, changes to their lead response and allocation system to improve results for agents, but it seems it is too little too late.
So what lessons are to be learnt from this??
If a poll was run in Australia and local agents sent REA the same message, would they laugh it off so quickly?
Realestate.com.au must be looking hard at this agent backlash in the UK. They fill the exact same position here in Australia that rightmove.co.uk fill over there. Despite the current conditions REA are increasing their fees at ridiculous rates. They are the significant market leader escalating costs whilst many agencies are closing their doors because of turnover round 30% of the business they did the year before. REA has also started scaling back their overseas business.
They have a reputation of arrogance and this writer believes that they have no real goodwill built up with agents, particularly over the past year where it has been one blunder after another. If the industry decides to teach them a lesson they will come out of it with more than a black eye when they get belted.
In recent months I have heard a number of industry trainers openly
Will REA learn from rightmove.co.uk’s experience or will the industry finally say enough is enough?
Should we run a similar poll?