New Property business

foleypio

Hello guys,

I'm in the process of setting up a new property business aimed at auctioneering, lettings & valuations. I live & intend to work in the west of the country. I was just wondering what would be the best way of getting new business in i.e. sellers, potential buyers, etc. Its been a few years since I worked in the field but I have previous experience & qualifications.

Apologies if this is the wrong forum & any help is greatly appreciated. Thanks

What made you decide to open to open up a property lettings business right now? Very mature market, lots of established competition.
Valuations might be a good niche BUT the government are going to put a valuation on every property in ireland soon so there will be no need for that once thats happened.
Do many people turn up for auctions these days? I know they did for Nama auctions but that could be mostly PR spin, surely they were heavily discounted properties.

If your not really clear on how your going to steal the business off the big competitors, what makes you think you can make it a profitable business for yourself?

foleypio

Deleted User wrote: »

What made you decide to open to open up a property lettings business right now? Very mature market, lots of established competition.
Valuations might be a good niche BUT the government are going to put a valuation on every property in ireland soon so there will be no need for that once thats happened.
Do many people turn up for auctions these days? I know they did for Nama auctions but that could be mostly PR spin, surely they were heavily discounted properties.

If your not really clear on how your going to steal the business off the big competitors, what makes you think you can make it a profitable business for yourself?

Thanks for your reply, I have ideas already about how I'm going to take business away from my competitors but I was hoping people might suggest some that I hadnt thought of yet.

I believe the market will be tough for the next few years but I have capital behind me & a good income from other sources. Basically I can afford the cost of advertising, getting my name out there, marketing the business in the best way possible. I can afford to take the hit of the business not being immediately profitable, It wont be do or die from the get go.

Peterdalkey

You might consider offering a fixed price model to sell property. Does it actually cost more to sell a E1Million property than a E200K one, of course not, but the fees charged do not relate to the costs involved... thus a serious opportunity to offer a big price advantage.

Link up with a couple of solicitors who are prepared to offer a similar deal on low fixed legal costs. the work is the same irrespective of the contract value. There are plenty of hungry solicitors out there who would love to be busy. Bundle this with your sales offer and you can make a big name for yourself.

Costly newspaper advertising is a thing of the past, and anyone looking for property is all over myhome.ie and Daft.ie. Listing costs have nothing to do with the property price and the reach is way ahead of any newspaper.

I would rent a display window in the locality to have a physical and visible presence and back this up with a small low cost office. The typical retail showroom that most auctioneers have is a very costly and in my view unnecessary overhead, in many cases simply a vanity.

I would hire a really talented graphic designer to come up with a striking corporate identity for your boards, website and stationary. I would be looking for a really strong bold killer design that could only belong to one company, yours! Spend money on a really decent designed website incorporating the foregoing design/logo etc.

Take all of the above and promote the living daylight out of your offering with flyers, cheap local newspaper advertising, local radio etc etc.

Cheers

Peter

foleypio

Peterdalkey wrote: »

You might consider offering a fixed price model to sell property. Does it actually cost more to sell a E1Million property than a E200K one, of course not, but the fees charged do not relate to the costs involved... thus a serious opportunity to offer a big price advantage.

Link up with a couple of solicitors who are prepared to offer a similar deal on low fixed legal costs. the work is the same irrespective of the contract value. There are plenty of hungry solicitors out there who would love to be busy. Bundle this with your sales offer and you can make a big name for yourself.

Costly newspaper advertising is a thing of the past, and anyone looking for property is all over myhome.ie and Daft.ie. Listing costs have nothing to do with the property price and the reach is way ahead of any newspaper.

I would rent a display window in the locality to have a physical and visbale presence and back this up with a small low cost office. The typical retail showroom that most auctioneers have is a very costly and in my view unecessary overhead, in many cases simply a vanity.

I would hire a really talented graphic designer to come up with a striking corporate identity for your boards, website and stationary. I would be looking for a really strong bold killer design that could only belong to one company, yours! Spend money on a reaaly decent designed website incorporating the foregoing design/logo etc.

Take all of the above and promote the living daylight out of your offering with flyers, cheap local newspaper advertising, local radio etc etc.

Cheers

Peter

This, exactly the kind of reply I was looking for, thanks very much

foleypio

foleypio wrote: »

Thanks for your reply, I have ideas already about how I'm going to take business away from my competitors but I was hoping people might suggest some that I hadnt thought of yet.

I believe the market will be tough for the next few years but I have capital behind me & a good income from other sources. Basically I can afford the cost of advertising, getting my name out there, marketing the business in the best way possible. I can afford to take the hit of the business not being immediately profitable, It wont be do or die from the get go.

That gives you a fighting chance then. I would try and carve out a niche for yourself if possible in the early days. For example student rentals near the universitie(s), foreigners moving to the area. This can help you refine your marketing and say web/SEO strategy to try and take some business from the big sites. You could do a deal with the student union, giving them a cut of your fee to recommend you to all newcomers. This could get you free marketing with the university.

With foreigners/foreign companies you could have a couple of add-ons to your service, ie. help them with new bank account setup, registering for their electricity, phone, internet suppliers and probably a few other things to make their move easier

foleypio

Some great replies/ideas here guys, really appreciate it

SeanSouth

As a new entrant to the market, my advice to you would not be to take on the whole industry by dropping your price, adopting fixed prices or anything else. Why not ? If you are successful at doing this, then all the other players have to follow your price downwards and then very shortly you arrive back at square one struggling to find business at the "new low price"

If you're going to compete, try to avoid lowering the price. All savvy business man are very aware of this. The rookies are not. Compete on service, Compete with advertising or Compete on anything else but as a new small entrant to the market, behave as a price taker, not a price setter. Take the price that is going and do everything else in your capabilities to draw the clients.

Peterdalkey

SeanSouth wrote: »

As a new entrant to the market, my advice to you would not be to take on the whole industry by dropping your price, adopting fixed prices or anything else. Why not ? If you are successful at doing this, then all the other players have to follow your price downwards and then very shortly you arrive back at square one struggling to find business at the "new low price"

If you're going to compete, try to avoid lowering the price. All savvy business man are very aware of this. The rookies are not. Compete on service, Compete with advertising or Compete on anything else but as a new small entrant to the market, behave as a price taker, not a price setter. Take the price that is going and do everything else in your capabilities to draw the clients.

That is certainly an alternative perspective, and at a superficial level it has certain attractions, in my opinion. However, it is to prefer the Superquinn model to that of Dunnes, Tesco, Lidl and Aldi. One also only has to look at the significant growth, in recession, being achieved by Penneys/Primark at the expense of the higher prices boutique style stores/groups in ladies fashions. It is obvious the they are never going to offer the leading luxury brands but they do very successfully target specific market segments. Value for money is a very complex and subjective area, whatever combination that finds favour with the consumer is clearly the correct one!

Identifying a target market and a having an attractive and meaningful USP are they keys to such a start up. The competition has generally relatively high overheads and you model on minimal operating costs. You promote to the cost conscious property vendors. You will not be getting calls from those selling multimillion country estates or Dublin 4 mansions.

This market is already oversupplied, like many markets in Ireland, so existing competition is strong and they have the capacity to offer attentive service and expertise. It is unlikely you can provide significantly better on the quality side such as to make a huge impact. Building an image and reputation for high quality takes a very long time and there is a finite market prepared to pay a premium price for that.

The OP has stated that he intends to operate in the West Of Ireland and is thus located away from the heaviest players in the market. The model that I espouse is aimed at the bread and butter house/apartment sales market but is equally operable in the rental market. it may also prove attractive to lenders looking to dispose of distressed properties. Estate agents are loved every bit as much as used car salesmen and despite this, the good ones have very successful businesses by providing a product/service that is in demand at a price that is attractive to the buyer.

I reiterate that having a low cost overhead is vital to being able to have a relatively low priced but profitable offering. I firmly believe that the typical fee structure based on property values is flawed, as there is a complete disconnect between the fee and the actual work involved. It is ripe to be attacked by a smart actual cost plus margin model. Your protection is to some extent that the high cost base existing players cannot afford to sell at your prices.

I don’t get the impression from the OP’s message that he is hell bent on dominating the Irish property sales/services market, but is keen to carve out a local niche. I would caution, that marketing and promotion of the new business are fundamental to winning a reasonable volume of new customers. The fixed pricing model is the bait, fish widely and often to catch plenty, it’s a numbers game.


Cheers


Peter

SeanSouth

Peter, I couldn't agree with you at all.......You sound like a text book advisor rather than an experienced business practitioner.

If I was selling my house in the current market, my priorities for an agent would be as follows

1) Getting the house sold in the least amount of time possible
2) Having a pro active agent who will chase down every lead.
3) Having a good negotiator on board who can achieve the best price
4) Having a good sales man on board with a good personality for engaging with clients
5) Having an agent that I feel I can trust
6) Having an agent that I am confident will get the job done
7) Having an agent that knows how to market my property
8) Having an agent with good local contacts and a good track record

These are the issues that the OP must zone in on.

Being perfectly straight these are the main considerations. If the house is worth 500K, I'm really not that concerned whether the agent gets 5000 or 8000 commission as long as he sells. A good negotiator will more than cover his fee even if he is not the cheapest. Lets say the good agent sells the house two months faster than anyone else, the owner will earn 3000 extra on interest in the bank.

If there was pressure on the price point in the industry, ie if the existing agents felt the pressure on their fees, they would have adjusted their charging structure already. The price comes from the market. You learn that in the 1st day of Marketing 101. Don't interfere with it. As a small player, you take the price point that's available to you and you compete on eveything else.

Basically, what you are advocating is that he lands in the west of Ireland like Batman, terrorises the local estate agent market there with lower fixed prices. Your view is that this will have punters flocking to his door and hurrah the rest is history. A more likely result is that his lower price mantra will raise suspicions with clients, will conjur up an impression of "lower price means inferior service" and will alienate him from the rest of the industry at a time when he should be building bridges with them. He will soon find that breaking down local loyalties to existing agents is not so easy and his new low price will have him out of business in no time.

You are right about one thing "building an image and reputation for quality takes a very long time" - It takes a long time but less so for an individual who is particularly good and particularly skilled. The opposite to this is someone who comes in using gimmicky tactics to try and short circuit his advance. This never works. Good people interested in building a career over the long term will get there in the end. The "fly by nights" will come and go. I know which category Id prefer to belong to.

SeanSouth

By the way here's my advice to the OP

Get yourself an impressive website and start focussing on building up a brand which is more professional than anything else in the local market.
Have a common theme between your website and "For Sale" boards and all media advertising,same colours, logo, trade mark etc. Get it done professionally.
Make sure that you present yourself impeccably before clients at all times.
Never promise anything that you cant deliver. If you promise to do something, then make sure to do it.
Make sure that there is someone to answer your phone at all times. Return email s in the same day

Target houses in your area that are for sale for a long time and haven't sold. Go and ask the owners for their business
Tell them that you have a new business and that you will put in a huge effort in getting their house sold.
Agree to dual agency if necessary.
As soon as you get a client, get your for sale board up as quickly as possible. For sale boards are the best marketer of your business
The more boards you have up, the more your phone will ring.
When asked about commission rate, tell them you'll match the existing agent who hasn't managed to sell.
Someone desperately trying to sell their house just wants to do business with someone who can get the job done.
In a slow market like this, the commission rate will rarely be the determining factor ( a buoyant market is different)

Let them see that you are good (not cheap) Follow up regularly with progress reports.

Peterdalkey

I have over 30 years experience in running my own distribution, manufacturing and exporting businesses, and still do. Perhaps you are an estate agent yourself? But well done on the Marketing primer. The market may well decide price points, but the market is made up of two sides, providers and consumers and both have a role. To suggest otherwise is frankly naive.

I am certainly not suggesting any Batman or fly by night operation and I have afforded the OP the credit of being already experienced and qualified in this area. He requested some alternative suggestions/ideas as to how he might enter the market. Myhome.ie and Daft.ie have significantly changed the dynamic of property sales/rental exposure to the benefit of the smaller players.

I am sure he will review the points raised by all the posters here and come to his own conclusions. Unlike you, I believe he needs to be radical in his approach to an overpriced and oversupplied market, my suggestions are but one course of action.


Peter

SeanSouth

SeanSouth wrote: »

Being perfectly straight these are the main considerations. If the house is worth 500K, I'm really not that concerned whether the agent gets 5000 or 8000 commission as long as he sells.

Not everyone thinks that way. When in negative equity that couple of K could make quite a big difference to someone

A good negotiator will more than cover his fee even if he is not the cheapest. Lets say the good agent sells the house two months faster than anyone else, the owner will earn 3000 extra on interest in the bank.

The problem is agents are a dime a dozen, and joe public really has no knowledge of who is good and who is not most of the time. Depends on if he is setting up in a town of big city. A town might have a guy everyone knows who charges high and gets the job done, a city though with all the typical brands out there its a different story

If there was pressure on the price point in the industry, ie if the existing agents felt the pressure on their fees, they would have adjusted their charging structure already. The price comes from the market. You learn that in the 1st day of Marketing 101. Don't interfere with it. As a small player, you take the price point that's available to you and you compete on eveything else.

Has the market not adjusted the business model itself, and with various property portals and websites appearing where you can advertise your property for a fraction of the end fees you would pay out to an agent? Didnt they use to charge a couple of G's upfront to advertise your property? Are they still doing that in Ireland? In overseas property for example the model has completely changed with 90% of companys going out of business because of high commissions and everything moved to direct portals and so on

Basically, what you are advocating is that he lands in the west of Ireland like Batman, terrorises the local estate agent market there with lower fixed prices. Your view is that this will have punters flocking to his door and hurrah the rest is history. A more likely result is that his lower price mantra will raise suspicions with clients, will conjur up an impression of "lower price means inferior service" and will alienate him from the rest of the industry at a time when he should be building bridges with them. He will soon find that breaking down local loyalties to existing agents is not so easy and his new low price will have him out of business in no time.

Why would he want to build bridges with people in the industry? Everyman for himself in property. If his pitch is right and he simply says im starting out, I will do my utmost to sell your property to gain your trust and build my reputation, while also reducing my fee compared to the competition, he wont build up any suspicion. People will take him at face value. We are not talking about an industry full of trustworthy people, quite the opposite, so a local guy trying to take some business off the big guys should sit well with the people he is pitching.

You are right about one thing "building an image and reputation for quality takes a very long time" - It takes a long time but less so for an individual who is particularly good and particularly skilled. The opposite to this is someone who comes in using gimmicky tactics to try and short circuit his advance. This never works. Good people interested in building a career over the long term will get there in the end. The "fly by nights" will come and go. I know which category Id prefer to belong to.

How long and how much money would it take to build a brand as well known as DNG, Sherry, Lisney etc? Years and millions of advertising euros.
If it were my business I would start the price low and once reputation is built up, raise it up more. Otherwise its impossible to distinguish yourself from the main players unless your going after small niche markets

SeanSouth

Peter

I don't know why you keep on saying that the market is overpriced.

I think if you do some research on it, you will find that every estate agent in the country is struggling, not able to keep head above water. For you to propose that the OP enters the market with a lower price than the experienced operators who are losing their shirts, is staggering

I am not an estate agent. I operate four different businesses of my own. I graduated back in 1985 and have been working in a professional capacity ever since. I have no monopoly of knowledge and will readily admit to making mistakes along the way however the issues in this particualr thread are so rudimentary, I just cant help myself from responding.

As they say, Doctors differ, patients die..........

foleypio

Guys thanks for the replies. You have raised some interesting points that I've given alot of consideration to already.

If I go in low on fees I run the risk of coming across as cheap & gimmicky but on the other hand its a good way of distinguishing myself early on from the big boys especially If I can work out a deal with established solicitors who will bring their fees more into line with mine.

One big advantage that I do have over local auctioneers is that I have capital behind me & a steady income every month from other sources. If it doesnt catch on initially I can keep marketing & advertising my business so there wont be many people in my area who wont at least have heard of my company.

If I'm honest I'm not overly concerned about building bridges with local auctioneers in my area. I'm trying to stand out from the rest of them, take their business, etc. What I intend to do is to affiliate myself with similar young auctioneers in counties close to mine but not in my catchment area. That way we can help each other with referrals, recommendations, information while not directly competing with each other.

leonidas83

SeanSouth wrote: »

Peter, I couldn't agree with you at all.......You sound like a text book advisor rather than an experienced business practitioner.

If I was selling my house in the current market, my priorities for an agent would be as follows

1) Getting the house sold in the least amount of time possible
2) Having a pro active agent who will chase down every lead.
3) Having a good negotiator on board who can achieve the best price
4) Having a good sales man on board with a good personality for engaging with clients
5) Having an agent that I feel I can trust
6) Having an agent that I am confident will get the job done
7) Having an agent that knows how to market my property
8) Having an agent with good local contacts and a good track record

These are the issues that the OP must zone in on.

Being perfectly straight these are the main considerations. If the house is worth 500K, I'm really not that concerned whether the agent gets 5000 or 8000 commission as long as he sells. A good negotiator will more than cover his fee even if he is not the cheapest. Lets say the good agent sells the house two months faster than anyone else, the owner will earn 3000 extra on interest in the bank.

If there was pressure on the price point in the industry, ie if the existing agents felt the pressure on their fees, they would have adjusted their charging structure already. The price comes from the market. You learn that in the 1st day of Marketing 101. Don't interfere with it. As a small player, you take the price point that's available to you and you compete on eveything else.

Basically, what you are advocating is that he lands in the west of Ireland like Batman, terrorises the local estate agent market there with lower fixed prices. Your view is that this will have punters flocking to his door and hurrah the rest is history. A more likely result is that his lower price mantra will raise suspicions with clients, will conjur up an impression of "lower price means inferior service" and will alienate him from the rest of the industry at a time when he should be building bridges with them. He will soon find that breaking down local loyalties to existing agents is not so easy and his new low price will have him out of business in no time.

You are right about one thing "building an image and reputation for quality takes a very long time" - It takes a long time but less so for an individual who is particularly good and particularly skilled. The opposite to this is someone who comes in using gimmicky tactics to try and short circuit his advance. This never works. Good people interested in building a career over the long term will get there in the end. The "fly by nights" will come and go. I know which category Id prefer to belong to.

Just as a matter of interest Sean, why do you think he should be building bridges with local auctioneers? Is it not a competitive environment, dog eat dog, survival of the fittest, etc. I dont really see the advantages in him being pally pally with the others in his area & afraid to step on anyone's toes.

SeanSouth

Believe it or not guys, Individuals in the same industry feed off each other and its a very important part of the business.

One example in this case might be where a buyer is buying a property from agent X but needs a valuation done for purposes of getting a loan. The same agent can't act as a selling agent and a valuer on the same deal so will often suggest or recommend another agent.

An agent in area A, 60 miles away from area B might be asked to refer a good agent in area B

An agent who only handles commercial property might be asked to refer an agent who handles residential property.

It may be more simple. An agent A is selling a house that was previously sold by Agent B. There may be a need to seek out some information from agent B

Agent A might be out of the country when a new listing comes in. If he has a good relationship with agent B they may be able to work out some level of cooperation.

The industry that you work in is extremely important and especially the good relations and contacts that you have in that industry. When Peter above says that its each man for himself in the property game, then he must be living in a completely different business world or planet than I.

This idea that you can bomb into a market with a lower price and hoover up clients is a completely naive view. First of all the existing agents will never allow that to happen. They will either squeeze out the renegade or lower their own prices to match. If they have to lower their prices to match, then everybody loses.
If you have very deep pockets then that strategy could work, however if your pockets are no deeper than anyone elses, then there will only be one outcome.
Peter in his naive view seems to think that the other agents would stand back and watch him steal their lunch. That makes no sense at all, especially from someone who claims to have 30 years experience.

leonidas83

SeanSouth wrote: »

Believe it or not guys, Individuals in the same industry feed off each other and its a very important part of the business.

One example in this case might be where a buyer is buying a property from agent X but needs a valuation done for purposes of getting a loan. The same agent can't act as a selling agent and a valuer on the same deal so will often suggest or recommend another agent.

An agent in area A, 60 miles away from area B might be asked to refer a good agent in area B

An agent who only handles commercial property might be asked to refer an agent who handles residential property.

It may be more simple. An agent A is selling a house that was previously sold by Agent B. There may be a need to seek out some information from agent B

Agent A might be out of the country when a new listing comes in. If he has a good relationship with agent B they may be able to work out some level of cooperation.

The industry that you work in is extremely important and especially the good relations and contacts that you have in that industry. When Peter above says that its each man for himself in the property game, then he must be living in a completely different business world or planet than I.

This idea that you can bomb into a market with a lower price and hoover up clients is a completely naive view. First of all the existing agents will never allow that to happen. They will either squeeze out the renegade or lower their own prices to match. If they have to lower their prices to match, then everybody loses.
If you have very deep pockets then that strategy could work, however if your pockets are no deeper than anyone elses, then there will only be one outcome.
Peter in his naive view seems to think that the other agents would stand back and watch him steal their lunch. That makes no sense at all, especially from someone who claims to have 30 years experience.

Although I agree with some of what you said & you have made some good points. I think the crux of Peter's argument is that there is alot more to be gained from standing out from the rest of the crowd by offering a service that epitomises value for money.

Most of the points you've made have been about referral's or recommendations from auctioneer to auctioneer but I think you underestimate the level of distrust & dissatisfaction the vast majority of people out there have with auctioneers currently. I would love the know the statistics of business gained by Auctioneers from refferals by others working in the same field.I seriously doubt it would be very high.

Also I think you are doing clients & potential customer's a disservice in their ability to source auctioneers & find out information about the good ones. Most people go online nowadays & most of the information they need can be sourced within a few minutes.

As somebody has previously posted, auctioneers are a dime a dozen in this country & I would say there is very little business gained from auctioneer to auctioneer especially.
Standing out from the crowd has alot more advantages than disadvantages to it. Being radical in a market where there is currently alot of dissatisfaction could be a great advantage for this business

Peterdalkey

At the risk of repeating myself, you can profitably undercut pricing in any market if you have a lower overhead/input cost structure than the incumbant players. You don't even have to be naive to work that one out.
I have never suggested as to what level of fees to charge, other than they be attractive to the norm for the service. I am suggesting that you consider offering a fixed price for the work. I think such a model would prove attractive to many in todays market. It also makes your company topical amonst your target group and should get your boards up in a decent number of locations pretty quickly.
Great professional graphic design will be a key in making your mark.

cheers

Peter

Well Sean as someone in the industry who has built property, and sold hundreds I completely disagree with you. You say you are not in the industry and are calling out Peter as being totally naive, but from my experience in property what your saying about building bridges is total nonsense. Its a ruthless competitive industry full of sharks, and 'experts' who are basically just salespeople. Your competitors are constantly trying to get one over on you one way or another.

To tell a new business entering a mature market that its crazy to undercut the competition is totally illogical. Your saying people in the industry are losing their shirts, yet at the same time your advising him to do exactly the same thing they are doing - ie. lose his shirt. Doesnt make any sense at all. How can he win business by doing the exactly the textbook things you mentioned, that all the established agents are trying to do? who have more money and more brand awareness?

The one point you make that I agree with is that the competitors most likely won't just allow someone to come in and undercut rates, and they will resort to various tactics to stop this. I have experienced this many times and its unpleasant. But if you fight hard and maintain your level of professionalism to the customer and expose the bad tactics of your competitors you can keep ahead of them.

SeanSouth

Peter

You talk about lower overhead as the key in this case to allow the OP charge less.

The Estate agency business is the one business where the overhead or input cost PER estate agent is pretty much the same for the smallest and the biggest.

An estate agent needs an office (a big agency with many agents will have a big office and a small agency with one person will have a small room. The office cost per agent will be the same or sometimes higher for the small agent

An estate agent needs a car. Same for big and small.

An estate agent needs sale boards and advertising. Same for everyone but when calculated per estate agent head is probably higher for smaller agents

So when you say that he can operate with lower overheads, I'm afraid you're not making sense again.

SeanSouth

@ El Rifle

Why do you think some existing agents do not go to the fixed price model. Is it because PeterDalkey was the 1st to think of it. I dont think so.

Why doesnt Sherry Fitzgerald adopt this tactic to win a little bit of extra business from Savilles. Ill tell you why,it's because it doesnt work and its not the way to approach a market. Lower price means a race to the bottom. I go with the lowest price today and then you put a lower price tomorrow until we reach the bottom where no one can survive. Anyone with a small bit of business sense knows that coming with such a strategy will just end with a price war which is good for no one.

If you watch the advertising campaigns of established estate agents, they never compete on price. They compete mainly on their individual effectiveness in selling houses. They sometimes put up a whole page of the houses they have sold to show they can get the job done.They never mention commission rates or pricing anywhere

If the OP has any shot at being a success in his chosen market he will need

1) Strong connections in the area
2) Good local knowlege
3) Excellent communication and client skills
4) Excellent sales and marketing skills
5) Good organisation and administrative skills

leonidas83

SeanSouth wrote: »

@ El Rifle

Why do you think some existing agents do not go to the fixed price model. Is it because PeterDalkey was the 1st to think of it. I dont think so.

Why doesnt Sherry Fitzgerald adopt this tactic to win a little bit of extra business from Savilles. Ill tell you why,it's because it doesnt work and its not the way to approach a market. Lower price means a race to the bottom. I go with the lowest price today and then you put a lower price tomorrow until we reach the bottom where no one can survive. Anyone with a small bit of business sense knows that coming with such a strategy will just end with a price war which is good for no one.

If you watch the advertising campaigns of established estate agents, they never compete on price. They compete mainly on their individual effectiveness in selling houses. They sometimes put up a whole page of the houses they have sold to show they can get the job done.They never mention commission rates or pricing anywhere

If the OP has any shot at being a success in his chosen market he will need

1) Strong connections in the area
2) Good local knowlege
3) Excellent communication and client skills
4) Excellent sales and marketing skills
5) Good organisation and administrative skills

But he's not trying to do what every else in the market is doing, he's trying to approach if from a different angle, get attention, make a name for himself for being cost effective. How is he going to do that if he's afraid of stepping on other's toes.

He's already stated he can afford to take a hit if things get tough so I think a price war would suit him down to the ground. More chance of his competitors going out of business than him in that instance. Alot of auctioneers are struggling in this current climate, he doesnt seem to be

Well its definitely not in the interest of established property agents to do this, not in the slightest. And they dont want some young upstart coming in and attempting to do it either. Hence the various tactics they will most likely adopt to stop him in his tracks. But from the 'young upstarts' perspective he doesnt have much choice, because if he doesnt do it he's not getting a piece of the market as I see it. How do you see him getting a piece of the market otherwise in a traditional estate agent model?
Its not a fixed price model I would adopt, just a lower % of the final price, build it back up later once established.
It could well create a race to the bottom if those big players followed suit with price cuts, but the market is radically changing now as I see it, I see a new property website up on a weekly basis nowadays with various new methods of selling your property. He has to go a different route to the established players one way or another

SeanSouth

I might have a different approach to most but heres the way my thought process would work on hiring an estate agent.

I live in one of Irelands bigger cities. At this stage I know most of the estate agents operating in the market. Ive become familiar with them through quite a lot of property deals of my own down through the years.

Some of these agents, I would respect greatly as being good at their job. Others I wouldn't go near even if they were offering their services for free.
I'm looking for the agent who will get me the best price for my property and who will be able to close a sale quickly. I will look at what kind of prices they achieved for other properties and i will look at how quickly they achieved sales on those properties. I will also take into consideration the valuation they put on my property and my credibility in them to achieve that valuation. The commission rate is one of the last things to be considered. For me its not the main deciding factor in choosing one agent over another. Its way down the list. I do know however that the more the agent is being paid the harder he will work to sell my property.On a few occasions I had a bonus structure for the agent which included some of the points above and I did achieve a quick sale and an exceptionally good price when using this tactic.

If I was selling a three bed house in an estate with four similar houses also for sale with the same agent, then make sure you are paying the estate agent the highest and definitely not the lowest fee. Dont make the mistake that your clients are shopping on price. I suspect they're not. My strong belief is that they are shopping on all the other things I have mentioned above.

Hunter21

foleypio wrote: »

Hello guys,

I'm in the process of setting up a new property business aimed at auctioneering, lettings & valuations. I live & intend to work in the west of the country. I was just wondering what would be the best way of getting new business in i.e. sellers, potential buyers, etc. Its been a few years since I worked in the field but I have previous experience & qualifications.

Apologies if this is the wrong forum & any help is greatly appreciated. Thanks

@ Original poster, have you drawn up a detailed Business Plan and a Marketing Strategy for your proposed new venture?

If not then I will advise you to do so, and don't go any further until this is done otherwise you are doomed to fail even before you place a foot forward, also forget about all the capital you have behind you- this could be a disadvantage as you could pump too much money into your auctioneer business to keep it afloat and keep up with the competition.

Make your business plan as if you are starting from scratch with no money and you need to pitch to investors.
Do a SWOT analyses of YOURSELF and your competitors on your area or nationwide.
Know your competitors inside out! Find out their managements backgrounds, their business model and basically every nut and bolt about their business.
Then when you have it finished get your plans critically analysed by an independant person that barely knows you or knows little about you.

Remember all business ideas sound great in our own minds until our eyes are opened by someone else.