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Are Estate Agents More Successful Than Accountants?

1st Apr 2015
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Forget accountancy, the boom business at the moment seems to be estate agency.

It might be April 1 but this is no joke. As the economy recovers, it seems that estate agents are taking over the world.

To prove the point, in a five-minute walk from my local tube station it is possible to pass 11 estate agencies. In a half mile radius from the station the count would probably get close to 50.

This beats coffee shops hands down and there was not a single butcher, baker or candlestick maker in the three or four blocks under consideration. Sadly, the accountancy profession is also severely under-represented in a society which has seemingly decided that buying and selling houses is more important than feeding the public.

This is presumably a consequence of ever rising property prices and the slow progression out of the kind of recession that must have been close to bankrupting every estate agent in the country. Now, they are presumably getting rich quick.

Quite where these competing companies are planning to find enough customers to survive remains something of a mystery. Even with a large new development, which claims that it was sold out before the foundations were laid, there can only be so much business in a pleasant but unexceptional residential area.

Presumably, since property prices have got to the stage where a large one bedroom flat will sell (or at least be offered) for in excess of £600,000, perhaps each shop only needs a few sales a week to survive.

The situation is even worse just up the road near BDO Towers at Baker Street. There, it is almost impossible to find a property on sale for less than £1 million, while £2 to £5 million is very common.

It is still a mystery as to where punters get the money to invest these kind of sums. Things have got so bad that even a garage (not the commercial kind filled with mechanics but a shelter for a single car) is on sale for £125,000.

There may however be some hope for those of us who would like to see a few more traditional shops replacing estate agencies.

The newest kid on the local block and probably the largest chain in the area is offering 0% commission for a limited period. Since one imagines that they do not charge the vendors either, this is literally a loss leader and, if it doesn't bankrupt the company making the offer, might just closed down a few of their competitors.

The question is whether we accountants could learn a trick or two from the country's big boom business.

Estate agents have the reputation of being sharp practitioners or, to put that into plain English, dishonest. They will happily encourage customers to gazump purchasers and, it is increasingly apparent, will deliberately under-price properties in order to make a quick sale, even if it harms the vendors.

In that context, the 0% commission could leave those that accept the offer worse off than paying a standard rate and having an estate agent trying to maximise proceeds.

For those of us who are not interested in learning shady selling techniques, what else could we derive from what is clearly a highly successful business model?

These sharp-suited smooth talkers always exhibit total confidence in their abilities to sell and this might be a useful asset to many accountants who are far better at adding up numbers and offering assurance than making sales to those who don’t really want to buy.

When was the last time that you received a flyer from an accountant through your front door? On this measure, estate agents will probably even beat every political party put together during the run-up to the general election and that will be quite an achievement.

Alternatively, perhaps we should take the traditional line and turn our noses up at the kind of people who we would be happier steering clear of.

If that doesn't work, then perhaps we could stick flyers through their doors recommending that they avail themselves of our services. If nothing else, all those dodgy tax schemes that we dare not sell to most clients will probably seem very attractive to those with the reputed morals of estate agents.

Failing that, roll on the next recession when these denizens of the high street will be boarding up their shops and their might once again be a possibility of wandering along a main road that has nothing to offer but those trying to flog us houses and American coffee.


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Out of my mind
By runningmate
01st Apr 2015 21:44

Tube extension please

I live in Cumbria where the average house price (according to Rightmove) is £170,830.  The average in 2008 was a shade higher - £171,919.

Maybe if the tube extended up here prices would go up!


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By MattG
09th Apr 2015 11:47

It still mystifies me that there are so many estate agents today and that they haven't largely gone the way of the dodo. If you think about what they do I can't think of anything that your average person couldn't do themselves, yet they usually cost far more than the surveyors and solicitors who provide a much more valuable and technically complicated service.

The whole percentage based commission is a bit of a joke too, as it often has no bearing on the actual amount of work involved.

As for viewings - I wouldn't want them to show people around in my absence, in which case I might as well do them myself. Fair enough if you are the other side of the country/abroad etc, but in general this is a service that people often don't want and even don't use.

Then they have their latest wheeze - a rightmove competitor only for traditional bricks and mortar agents with exclusivity terms, presumably setup to stay outside of any regulations regarding cartels....

I can be certain that when I next move I won't be paying an estate agent! (Well possibly a little bit to one of the basic online listing "agents" just to get an advert onto Rightmove, because of course they also require you to be an "agent".....)


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