Outside of the industry few people had probably even heard of online real estate platform Purplebricks when it floated at the end of 2015 with a market cap of £240m.
The company was only incorporated in April 2012 so to be admitted onto AIM – the Alternative Investment Market – so soon highlights the impact technology has had on the sector and the way it is changing the estate agency world.
Purplebricks co-founder Michael Bruce says technology offers things that humans simply can’t.
“Tech will never be off ill, never leave, never forget – all of the things that are natural issues when you introduce humans, they just don’t arise,” he says.
This allows, he says, for a guaranteed, round-the-clock service for the customer.
“You can do anything from arranging a valuation instantly, to checking contact details, dates and times from your phone.
“You can arrange a viewing at any time 24 hours a day, make an offer or agree a sale at 7pm, or change the price online on a beach somewhere, and instantly all of the property portals change and you can be on the market in 45 minutes.
“What our tech does is allow the whole process to happen 24 hours a day on any device wherever you are in the world and the minute you do anything, things just happen.”
Bruce says the starting point for Purplebricks was finding out what customers didn’t like about the industry.
“They told us they’re not ready to hand over the sale of property entirely to tech, but that they are very willing to embrace tech to make the process easier,” he explains.
“However, they still wanted a local expert to give advice throughout.”
The team repeated this market research at the end of 2015, around 18 months after the site’s launch, and found that although people could see where technology was improving their experience they still wanted this human element.
“What we’ve done is try to break down all the barriers, all the things people are concerned about the process and provide the technology to make that work and guarantee that works, or experts to assist and support with the stuff that people can’t get via tech.
“We have a culture of people who want to win, who want to change an industry, who want to deliver to the customer, and that are advocates for an estate agent brand – it just doesn’t happen anywhere else.”
Bruce says the reason Purplebricks can attract these type of people is because of technology.
“Our business benefits from people who are excited about the seed change that’s happening and the fact we’re at the front of that,” he says.
“That’s why we find first class people who want to work for us and earn nearly twice as much as on the high street but in a wholly different environment.
“They’re not in a car rushing through traffic to get to the branch at 7:30am, they’re at home engaging the customer or out there in people’s living rooms – that’s what they do, that’s what they love, that’s what’s being built on, and Purplebricks offers that.”
eMoov founder Russell Quirk comes from a long line of high street estate agents.
His father and grandfather ran a chain of 14 agencies, and Quirk himself spent 10 years behind the wheel as director of Quirk Deakin, a chain of estate agents in Essex.
The idea for eMoov came when Quirk was forced to consolidate two of his Thurrock offices to save costs during the credit crunch, and was surprised to find that despite losing a branch, business didn’t suffer.
“The public didn’t waver. To them it was indistinct, to enquire on websites via a phone number or through estate agents with an email,” he says.
Quirk calls this his ‘Eureka moment’ and sparked his belief that the industry was heading towards ‘Amazonification’, a world where agencies would consolidate their assets under one roof, move online, and use this platform to provide next level service.
Quirk launched eMoov in 2010 and a little over five years later, at a run rate turnover of £2m a year and listing over 4,000 properties in 2015 alone, Quirk calculates the team has saved consumers £20m in estate agent fees.
“Why are high street agents seeing massive chunks ripped out of their share value?” he asks.
“I contend it’s because the investors realise they have no future – they have no strategy to compete with people like me,” Quirk tells BusinessCloud.
Quirk sees online agents as streamlining what he calls a traditionally “very murky, smoke and mirrors type business”.
Companies such as eMoov – a hybrid agency that offers all the services of a traditional agency, minus the bricks and mortar store, for a flat fee of £595 – provide a ‘best of all worlds’ approach, he argues.
Put simply if you want to change your price at 3am you can and technology makes it possible.
This doesn’t mean there is no place for the agent in the new digital world though; eMoov’s experts oversee the entire process, from setting the original asking price to arranging viewings.
This reinforces Quirk’s motto of ‘great people, great tech’. “Service is my obsession,” he says.
“This is especially important with property transactions.
“The consumer wants to drive costs down because they don’t want to pay £4,000 when there’s an alternative down the road for £600.
“You haven’t got to be Einstein to see where this ends.”
Investor Simon Murdoch – who owns shares in eMoov, Zoopla and Shazam – believes that the future of the sector lies with the online agent.
“We as investors honestly do believe it’s where the market is going,” he says.
“What’s required is for firms like eMoov and others to do a better job than high street agents can do.
“The great thing about the hybrid model is that it massively reduces the cost to the vendor.
“When you sell a property it can be a couple of hundred thousand to millions – it’s a really important transaction to anyone selling – and even though house prices have gone up enormously in the last 10 to 15 years, estate agents are still charging the same percentage – one or two and a half plus VAT – and we think as investors in eMoov that that’s not right.”
When HouseSimple launched in 2007, its co-founder Alex Gosling wanted technology to offer the customer increased control in the buying process. Using HouseSimple, a seller can dictate their level of involvement in the selling process, says Gosling.
“We use a self-learning system for our network of guys, so we’ve got ratings linked into how we allocate jobs – the better guys will get more work, and obviously it also relates to proximity as well,” he says.
“Our viewing system is also linked into Rightmove and Zoopla’s API so people can book viewings at 11pm without waiting for us to process it – that’s how we sell faster and maximise leads.
“In reality people need their hands held throughout the process. It’s a pretty difficult thing to go through so we have to step in the whole way.”
As technology increases, so do client expectations of the high street estate agent, says Elliot Jones, online marketing manager for Hamptons International estate agents.
“Tech as a broad term is becoming more and more important with every day that goes past. It’s no longer acceptable to just create property brochures – clients want digital images and for the property to be on websites and accessed through apps.
“The industry is progressing and digital is leading the way.”
Technology also enables the high street agent to hit a much wider audience than previously available.
“We’ve got bigger audiences to show properties to and we can hit people on a wider scale than the niche local marketing efforts – we are still doing that too but it doesn’t have the widespread reach that online does,” he says.
What traditional agents offer to ensure their continued relevance against emerging online agents, according to Jones, is a human element.
“I think the service you get from face-to-face interaction will always be better than a faceless, online email. Things are changing and clients are becoming more tech savvy.”
Paul Jarman, head of residential in the western region for high street estate agents Savills, says technology is bringing increased speed and convenience to the high street agency offering.
“People these days want to be able to access everything at their given time and place,” he says.
“Before you even make a call to an agent you’ve got a good impression of what the property looks like.
“We have less and less time on our hands so if you can save time not viewing a house – if you can do it online first – that’s fantastic, and these days the majority of applicants do.”
Mark Hayward, managing director for the National Association of Estate Agents (NAEA) says high street estate agents shouldn’t ignore the progress that technology offers: “They shouldn’t bury their heads in sand,” he says.
“Things have to move forward and progress is inevitable – those in the industry will have to adapt; some will remain traditional and some will offer a choice of hybrid.
“At the moment there are too many operators out there so there will be consolidation as people see whichever operating model is viable.”