Published: 01/08/2022 By Tom Bloomfield
Rightmove’s half year results show a massive boost in earnings and, predictably, estate agents are grumpy about it, with complaints aplenty and fresh calls from some to abandon the platform.
I’m not going to waste my breath adding to the outcry though, because in my view Rightmove won this battle back in the noughties and it’s time for us agents to adapt to the new world.
Buyers like simplicity
I’m neither a fan nor a critic of Rightmove but I understand what motivates them and I recognise the significant control they have over the attention of UK buyers.
The public would much rather view all the properties available for sale in one place as it saves them having to search on multiple platforms. This helps Rightmove, who as the incumbent dominant portal in terms of stock, retain buyer’s subliminal support. The more buyers in the market switch their preferences to searching online, the more they fall in love with Rightmove relative to the other portals.
This positive feedback loop gives Rightmove ever increasing power, which is disproportionate to its underlying strengths as a portal (its features and functionally are virtually the same as Zoopla and Onthemarket), and they know it too.
Rightmove does not care about estate agents
Rightmove’s first objective is to inflate profits for the benefit of its shareholders and they do that (mainly) by increasing what they charge estate agents.
If agents start to make supernormal profits across the board, Rightmove will simply take them away in the form of higher charges; indeed, the only incentive Rightmove have to temper their price hikes is to avoid knocking too many agencies out of business at the same time.
However, despite the above there are opportunities for some estate agents to thrive if they get themselves properly orientated.
Agents! Stay small and chase productivity
A by-product of the property market being increasingly online, is that the tiniest estate agency firms can now access the same buyer audience as the largest multi-national brands. This is a great leveller, that will ultimately bring about the end of cumbersome estate agency brands, as they are gradually replaced with thousands of tiny, owner-run firms with just a handful of staff.
These firms will deliver better value to their vendors, having reverse engineered their behaviours around the digital marketplace, with savings made as they cut away unnecessary offline marketing. Because these firms will be fronted by experienced directors and partners, vendors will potentially enjoy day-to-day support from experienced agents who in larger firms would have been drawn up the corporate ladder away from client facing roles.
The human touch
Selling property is a lot about matching a house with a buyer, and nothing does that faster or at greater scale than Rightmove; but there are plenty of other things that matter a lot to vendors which Rightmove cannot do well or even at all: providing detailed valuation advice, producing great sales details, answering enquires efficiently, attending viewings, negotiating offers and chain management to name but a few.
Agents who do the above well won’t need to spend time complaining about Rightmove’s profits - They will prosper and they may even go on to witness the day when some bright spark emerges from left field with a portal that knocks Rightmove of its perch.
NB: My thoughts are limited to my area of experience which is property sales, not lettings.