An email arrives from a local estate agent. He wants to let me know that from November he will not be charging an estate agency fee. Nothing at all. Call him and ask him to sell your house and he will do it for free. “Any property, any value, Edinburgh and the Lothians and the Scottish Borders, zero estate agency fee.”
It sounds good. And the unusual thing about it is that, if you are selling, it actually is good. Very good. I called the agency, Mov8 Real Estate, to see what the catch was. Turns out that there isn’t one. Robert Carroll, who runs the agency, simply wants to create a bit of brand awareness and to keep working during a period of property-market paralysis (transactions have collapsed across the board in the last few months).
However, the offer is more than just a short-term gimmick. It is a step in the direction in which Robert thinks the market is going. Not long now, he says, and the days of an agent being able to charge 1.75% of the value of your house for taking a few dodgy pictures and showing people around will be long gone. Web-based services will come along that provide brochure or schedule templates so people can make them up themselves. They’ll also be able to design their own sale board online and sign their own properties up to the likes of Rightmove.
So Robert won’t charge for any of this stuff – he won’t be able to. Instead he’ll make money from the extras, from professional photography, from giving specialist advice, from analysing buyer feedback and from advertising. The big agencies will think all this mad, of course. But it makes sense. If you charge people a fee for photographs they’ll pay you regardless of when the house sells. But if you charge them 1.75% on the sale of the house, you won’t get it until the house sells. At a time when transactions have collapsed and, with the mortgage market unlikely to return to its 2007 excesses until the scars of a generation of bankers have faded, I know which business model I’d rather work with.