Broken chains cost estate agencies £1m a year each, claims report
Joint research by TwentyEA and ViewMyChain reveals the damage done to estate agencies' revenues if they are at bottom of average progression times.
A new study of sales progression times among hundreds of estate agencies over a 12-month period has revealed that the slow ones are losing nearly £1 million each or approximately £90,000 per branch in lost sales from fall-throughs.
The research, completed jointly by ViewMyChain and TwentyEA, may point out the obvious – that slower sales profession leads to more fall-throughs – but delves deeper into what that means for estate agents’ bottom lines.
To assess the cost of poor sales progression, the analysis examined performance data from the UK’s top 500 estate agencies over the past 12 months, focusing on the time taken to progress a sale to exchange.
As a benchmark, the study evaluated the performance of the 100 estate agencies with the slowest sales progression out of the 500.
On average, these ‘slow’ agents took 5.2 months to complete a sale, compared to the market average of 4.0 months while the top 100 agents averaged 2.7 months.
The report says: “Crucially, what this means is that these poor progressing estate agencies turn their stock only 2.3 times per year versus the market, which turn their stock over three times per year. The best 100 agents are turning their stock over 4.5 times per year.
“Given the average sale price of properties handled by the Top 500 agents (£451k) and assuming a 1% commission, this results in lost commissions of £938,697 per agent brand or £97,274 per agent branch. That translates to approximately 21 exchanges lost per branch.
Paul Halliwell, Executive Director at ViewMyChain, adds: “The numbers clearly show that something has to give.
“Agents need full visibility of the entire chain, as well as timely progress updates on each property within it – without depending on another party’s availability or the quality of their feedback.
“This is precisely the gap that ViewMyChain fills, addressing the industry’s biggest chain visibility challenges in real time.”
