At last, the housing market is on an upward turn, which means that estate agents can forge ahead in 2015 with an optimistic outlook – but is it enough to carry on with business as usual?
Agencies have already moved on from bricks and mortar to clicks and mortar, but some are taking it even further. What’s next for the British property market?
As experts in competitive intelligence, we predict that the changes we’re going to see will become much larger than simply a shift from physical estate agents to online. This will result in a boom in PPC spend in the industry, starting now.
Although the common method of selling your property used to be meeting your local estate agent, who promised to sell your home by submitting the particulars to newspapers far and wide, a massive shift has happened in the last ten years, with estate agents promising to list your property also on one of the many aggregators on the market.
The likes of RightMove and Zoopla have taken over from the local newspaper, making it easy for punters to find their dream home and those looking for a sale to submit it to their local estate agent with the knowledge their home is getting an audience stretching the entire world rather than just their local area.
But times have moved on again, with the introduction of online-only estate agents that manage the whole process and to the benefit of the seller, reduce the fees involved in selling a property substantially.
This move is set to reboot the housing market and will result in a re-invigorated industry, encouraging homeowners to sell their home rather than opting for home improvement.
This may all be good news for mortgage lenders and the construction industry, but how will it affect estate agents and what can they do to stay afloat?
Who Are the Innovators?
At these startups, agents are local and home-based, and visit the vendors at their homes for valuations and negotiations.
Although the property details go up on their website and are collected on aggregator sites like RightMove, what really sets this new model apart from others is that the new generation of agents ask for a set fee of between £500 and £600 per sale, rather than a rate of 1% and 3% of the sale price as is usually the case.
Although the number of houses estate agents were selling a month last year reached a six-year high according to This Is Money, the rate of growth has slowed over the last 12 months, mostly due to people still being a little cautious after the housing bubble of 2009, but also because the cost of buying a home has inflated as a result of competition.
With the average UK house priced at £186,941 in the UK in 2015 according to The Telegraph, this would put agent fees at between £1,870 and £5,600 – a huge amount to pay on top of the solicitor’s fees and removal costs, plus other hidden charges that inevitably pop up when selling a home.
There’s no denying that cutting this to an average of £550 would be attractive to sellers and would make the online-only estate agents appear more transparent, growing customers.
We predict this new advent of estate agent will completely re-align the market, offering a more attractive option for those selling their homes and the traditional estate agents will either have to take onboard this strategy for fear of missing out on house sales, or use a more unique approach to attract the attention of house sellers via sponsored search.
How Can Estate Agents Stay Competitive?
These new players are completely interrupting the market and this will be reflected in PPC as the place for online estate agents to go head-to-head.
Estate agents are already battling in PPC for the prime real estate in search and with the new players having a more aggressive online strategy, it is likely that PPC will be one of the main battlegrounds when it comes to attract clients.
Additionally, mobile is increasingly becoming the platform of choice for buyers and a good combination of PPC and SEO can secure them to ‘own’ pretty much the whole screen when someone is searching.
At the moment, Google Trends shows the new innovative estate agents are lagging behind those that have been around for longer – which is understandable considering the online-only estate agents only set up shop a couple of years ago.
However, from the Google Trends graph above, you can see that against the estate agents market (the black line running through the middle of the competitors), these online-only estate agents are on the up when it comes to searches.
If we compare aggregators Prime Location, Right Move and Zoopla, it’s clear the market is not as strong in comparison to the entire estate agents market, demonstrating a strong shift since the online-only estate agents started to take over.
If you operate your estate agent business on aggregators like Zoopla, Prime Location and Right Move, you need to adapt your PPC strategy in the coming months to stay competitive.
This is when it pays to start thinking outside the box: Adthena’s competitive intelligence for search platform can help you make your PPC budget work harder and get better results.
Instead of jostling for position on a crowded playing field, we can analyse the entire competitive landscape, allowing you to sneak into keyword slots left open by online-only estate agents that others may have overlooked.
As the property market heats up for another huge year, make sure your business is taking home its share and can compete against this new breed of estate agent that will be vying for real estate spend in the PPC market.
Keep your eyes peeled for the follow up to this article, where we will be using Adthena data whether to see if this prediction was correct!
(Main image credit: oatsy40/flickr)