Russell Quirk: Estate agents should thank me for failing online
The controversial former boss of the original Emoov claims the industry should thank him and the other online pioneers for proving that the low-fee online model 'doesn't work'.
Former Emoov boss and now PR guru Russell Quirk has claimed that estate agents in the UK should thank him and the other pioneers of the online and hybrid model for their lack of success online.
The comments, which Quirk admits are controversial, were made yesterday during a podcast with Mark Worrall, founder of agency Love2Move and Sam Hunter, founder of property data firm Homesearch.
Russell Quirk says the past fifteen years of online estate agency development that has seen millions of pounds of investor cash burned was ‘an experiment’ that he and other pioneers such as Mark Readings and Graham Lock of HouseNetwork and Adam Day of Hatched now put down to experience.
“Estate agents all over the UK owe us all a big debt because we’ve shown that the online model doesn’t work and therefore that it’s not a threat,” he says.
“We’ve also demonstrated how the work we pioneered around technology including centralisation, operation efficiency and marketing can be taken on board by traditional agents, and we’re seeing that happen with full-fee companies such as Keller Williams.
Our loss in the industry’s gain.”
Quirk, who is now also a stakeholder in a Keller Williams franchise, predicts during the podcast that Purplebricks will eventually be the only hybrid agency left standing and that it will achieve the 10% market share that its CEO Vic Darvey recently claimed it would.
To listen to the World Class Agency podcast Quirk appears on, visit its website or listen via the Apple, Google and Spotify podcast platforms.
Russell I have always had the upmost respect for your skills when it comes to PR but personally this podcast and article is taking it too far.
Everyone makes mistakes and yourself and the pioneering entrepreneurs that pushed the online model ultimately couldn’t make it work.
The industry and the consumer just doesn’t believe this is the best model and no amount of money can change those needs and the service required to deliver the result.
Stating you should be thanked by your fellow agents for persisting and getting it wrong despite people telling you this would happen, is not only insulting to all the professionals in the industry but also the vendors and investors who lost money as a result of you gaining experience.
Your comment “Estate Agents all over the UK owe us all a big debt” makes me cringe and couldn’t be further from the truth.
I genuinely think now is the time to accept that it failed and actually be both humble and respectful about the experience and the people who lost money backing you.
Sensational PR headlines insulting your fellow professionals is not going to help you or KW.
I make these comments respectfully and I hope we can all as an industry get back to helping our clients get through the uncertainty and tough times ahead!
Over half a billion pounds spent / invested in online agents in the UK.
Profit ZERO.
Reason – the cost of capturing a new client and running the online model costs 23% – 32% more than the fee being charged.
That is why Purplebricks have just hiked their fees up by another £100 a unit, closing the gap between online fees and traditional fees.
All online agents continue off the back of upfront fees and referral fees, sale or no sale, those online agents seeking no fee or no upfront fee will be out of cash within 12-months. Traditional agents are still mainly going down the no sale no fee route.
Personally if I set up again today, I would go the ‘charge the client for the service provided’ route with regular monthly payments for work done so far.
£x for listing, £x for exposure on websites, £x for viewings, £x for agreeing a sale, £x for qualifying buyer, £x for dealing with sale up to exchange – which in terms of hours is most costly part of process, £x for exchange, £x for aborted sale. So as the weeks tick on – the vendor is incentivised to reduce price, if the property has been fully and professionally marketed without a buyer being found.
This would mean agents could charge ‘lower’ fees as they would be invoicing all vendors, rather than just invoicing the 50% of vendors who get to exchange and building in the cost of the ‘other’ property that they marketed but failed to sell.
Eg, you list 10 at £400,000 at 1% = 10 x £4,000 potential fee or £40,000. You sell subject to contract 7 and 2 fall through before exchange, so you invoice 5 at £4,000 = £20,000. So you have shouldered the cost of marketing the other 5, and got no money from the vendor as a fee.
In the alternative version you list 10 at £400,000, and you charge all 10 a fee based upon the work you actually carry out. 12 viewings, one aborted sale and then a re-sale, 30 hours of sales progressing etc.
Five sales go through and five do not, but because every vendor is paying something then the fee to all could be less, so instead of 1% payable to the 5 who exchange, you charge in real terms 0.6% to all 10, so that is 10 x £4,000 x 0.6% = £24,000 income in and each vendor as an average is paying 40% less than the a 1% fee.
Happy vendors and more income in, as well as a steady income flow, if all vendors are billed on a monthly cycle, much better than waiting five months for a fresh instruction to become a paid for invoice.
The online model does work. Only when a business spends millions of other people’s money, on marketing that has no message, is it fallible.
Russell Quirk and others deserves thanks for not being good enough at marketing. And he seems set on repeating the trick at KW.