Mortality

All 140 staff at Emoov were expected to be given their marching orders on Tuesday night after the online estate agent collapsed into administration.

The start-up, which had engineered a £100m three-way merger with rivals Tepilo and Urban.co.uk just six months ago and had been eyeing an IPO next year, went under on Monday evening after running into cash flow issues and struggling to find a buyer.

Russell Quirk, its founder and chief executive, told the trade magazine Property Week: “All staff, including me, are expecting to be laid off today.”

The loss-making company, which charged home sellers a fixed up-front fee rather than the commission levied by traditional estate agents, had put itself…

All businesses do indeed fail. Always a bit tricky when someone charging up front does too.

17 comments on “Mortality

  1. Its an enigma
    estate agents serve the largest marketplace by value.Number one target for techie disruptors. No qualifications required….. bad reputation…. interests not aligned with client…. (viz freakanomics)….will tend to sell at average market rate……per cent of total sale not aligned with costs or performance. Can look up everything online.

    but yet here they still are.

  2. Because being on commission means they actually get off their arse and try to sell the thing (assuming it’s priced reasonably). I’ve never had an online agent phone me up and tell me about a lovely little house that’s coming into the market next week, and they’d like to exclusively invite me (and everyone else on their list) to pre-view it. That’s salesmanship, even if it’s bullshitting the buyer. Your online listings-only agent won’t do any of that.

    As for the Freakonomics point, yes the agents aren’t clamouring for the highest possible sale price once they’ve won the contract, but they still need to propose a high selling price when they’re bidding for work. So it all works out ok.

  3. IIRC the Freakonomics point was that Realtors tend to sell their own property at a slightly higher price than the average for that type of property, around 5%? That was confounded by them also being able to take longer over the sale.

  4. “but yet here they still are”: I bought my first flat in Edinburgh decades ago. Estate agents scarcely existed – the business was conducted by solicitors. By God they were good at it – business-like, brisk, competent, and not even expensive.

    My own apologised for having to apply the partnership’s scale fee – it seemed disproportionate for a simple transaction. “So why not bring in your girl friend and I’ll do you each a will without extra charge?”

    Our later experience of buying a house in England was a sorry contrast: feckless, slack, slow; deeply unimpressive.

    On the other hand, it’s my impression that at least the estate agents in England charge lower percentages than their American equivalents.

  5. Little estate agent story. Years ago we’d converted a house in Hampstead into flats. Total value well over a mil. Put the result with one of the larger & better known agents in the SE of England. Specific instructions. You’re being paid to sell the things. You’ve got the keys. You show the prospective purchasers round. Needless to say, straight away we’ve people ringing on the bell been sent round to look at a flat without appointments. Rung the office, in not the best of moods & got the branch manager round to discuss the matter, on threat of taking it away from them. Supercilious besuited child turned up to tell me it was company policy to send clients round unaccompanied yadda yadda. General drift being we were fortunate, no privileged, to have the services of such an exalted concern etc & we should pay due deference to our betters.
    Paused the conversation at this point to make a phone call.
    Went like this:
    “Hi John. Pete. Yeah fine. And you? Look, I’ve got someone here you might want to have a word with.”
    Handed phone to besuited child.
    “Why don’t you explain all this to your Group CEO?”

  6. The standard fee in France is 7% + VAT (TVA).

    Tell me about it. Mine was at least competent though, as was the notaire who managed the whole transaction. Costs aside, it was a painless process.

  7. In Texas, 6%, we got 5% by shopping around. Fairly painless process, and we were not expected to do the tour or indeed be present. The agent for the buyer does that and gets their cut from the same 5%. Title companies do the ‘conveyancing’ equivalent, no lawyer is required.

  8. I know a bloke who bought an estate agency business a couple of years ago. Thought he must be mad given Purple Bricks and the like. We fell to talking about it one day. He said he just could not see them taking over because even though the fee was much smaller, the client had to do everything for himself.

    I pointed out as gently as I could that much of internet commerce, eg. domestic banking has developed very successfully on precisely the same lines – by getting the customer to do the work, which is why so many branches have closed. But he remained quite sanguine.

    Maybe was right after all. But I remain doubtful. Purple B now markets itself as doing everything for you (don’t know how true that is) and even if they don’t it’s surely a matter of time before, I dunno, drones are flying keys to potential buyers and dropping them off at the door of the target house.

    With zoopla’s database expanding all the time and increasing transparency via the Land Registry of actual prices paid, I still think the days of offices full of estate agents are numbered – albeit I can see a role for self-employed gophers who do everything from tidying-up to showing you round. But really, how many people are going to want to pay for it?

    So perhaps tepilo and the others did not get the model right, but I think someone will.

  9. Edward Lud, the stories I have heard about Purplebricks suggest you should avoid them like the plague. They were the last to know the transaction had completed. They were even worse than the lawyers. The buyer had to send the transfer direct to the vendor’s bank account as her solicitor was on holiday.

    However, I would not have thought that BIS was a grass!

  10. A conveyancing lawyer friend loathes purple bricks, even though she gets lots of work from them. Apparently they fail at the basic admin, getting the information through, and so on

    But that doesn’t mean that the traditional commission-based estate agent is necessary. it may just be that the online ones initially undercut a bit too much, gone too far down the Ryanair model; something in between (Tesco rather choosing between than Lidl or Waitrose) may turn out to be right.

  11. I’ve never understood how estate agents can justify taking a % commission. From observation they don’t work harder to sell a £500k house than they do a £400k one and their costs are the same. I can understand that when they get in to the £ms its more work, but they go to estate agents that specialise in that market.

    The marina market is similar. In finger berths we pay by length even though once occupied it doesn’t matter how long your boat is, within reason.

  12. The estate agent we used to buy and sell last time has moved off the high street to an office block round the corner.

    Business has dropped right off apparently although they must still be advertising online.

    Just shows that a bricks and mortar presence does help.

    People I have known of who used PB were complimentary but I understand it is quite hard work as you have to do a lot of work yourself instead of leaving it to the agent.

  13. “Realtors tend to sell their own property at a slightly higher price than the average for that type of property” – my experience of estate agents (rather limited) is that they are passionate about getting high prices, but bullshit lots to all parties. Difficult to compare the ‘type’ of property the ‘realtor’ owns, as he probably owns the house with that extra bit of garden and garage that others in the same street don’t have, so he’s got the most saleable house in the street and knows how to sell it.
    I suppose i’m sort of saying that they do have a reason to exist and within that existence a certain integrity.

  14. “The standard fee in France is 7%” – i bet that’s due to qualification./ licence required. Guess ditto for the USians.

  15. @ john 77
    “This is one of the instances where Scottish Law is better than English.” A friend says that the difference is only partly in the law; he thinks it’s also cultural.

    I interpret this to mean “the English have an infinite capacity for putting up with unbusinesslike service”. Mind you, both Scots and English are currently showing a remarkable capacity for putting up with rotten government. Soon we will be challenging our American cousins in that regard. Or maybe we will reflect constructively on the French example. But I doubt it.

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