Have you noticed that recently you’ve been inundated by letters and leaflets from estate agents offering you free valuations, free selling fees, free solicitors, cheap fees, competitions and no end of other incentives to sell your house with them?
If you haven’t, you’re lucky.
Estate agents are sending out more mailing than ever. One small office in a town of 50 plus agents that I know is sending out 50,000 a month alone. UK wide the number is in the hundreds of millions every year.
Why this sudden explosion? Here are the reasons:
- More Estate Agents
- More Buy to Let
- The Three Time Rule
- Diversification of Advertising
- Fewer Repossessions and Executors Sales
- The Online Threat
- Houses Selling Faster
Above all it is the lack of property. People are tending to stay in their homes longer, there’s more renting and as we all know not enough new houses have been built for decades. In most areas, particularly the congested South, this has led to a massive housing shortage and estate agents are struggling for instructions.
More new estate agents have opened up in this most recent property boom and even existing agents have added offices. Just because there are more estate agents, doesn’t mean that suddenly people want to sell their homes more often. And so more agents are fighting over the same properties.
Buying a property and renting it out has become a good investment option for many with steadily increasing rent and capital value. Unless there’s a dramatic downturn it’s difficult to see where this can go wrong. Landlords tend to hang on to their property for much longer periods than owner occupiers further squeezing the property market already short supply in supply.
Estate agents usually expect less than 1% return for their flyers. In other words, they will get one call for every 100 they send out, and this is on a good day. Usually, it takes three flyers to even register with the home owner that they are after business.
Most of them go to the recycling bin without being read before that. That’s why you’ll see the same agent writing to you numerous times, it’s not because they are particularly interested in your house I’m afraid!
Flyers have been used for many years, but agents have had to increase due to diversification in advertising opportunities. Twenty years ago, as long as you’re in the local paper this was good enough to obtain all of the properties you needed.
Now, there is a massive choice, newspapers, Google, Bing, OnTheMarket, Zoopla, RightMove, television advertising, sponsorship, the list goes on and on. So agents no longer know exactly how to reach their target audience – that’s why they use direct mailing.
Agents, particularly those linked to financial institutions, used to be able to rely on large numbers of properties coming to them when repossessed or from solicitors dealing with deceased estates. With low interest rates and longer life expectancy, even these sure fire properties are now as rare as Donald Trump’s good hair days.
We’ve all seen the rapid growth of online estate agency and whilst this is estimated to only take about 5% of the market, it is steadily growing and traditional High Street agents are having to fight harder for their instructions.
Because of the shortage, properties are on the market for less time so agents aren’t able to pick up disgruntled clients or multi agency instructions so easily.
So next time you find it hard to push open your front door because of the mountain of leaflets from your local agents, spare a thought for them. Despite a booming property market, these are actually quite tough times. You see? You’re feeling sorry for them already – perhaps.