Performance based on data evidence
Would you invest £250,000 with a fund manager not proven to deliver the best returns but getting your business because of low fees?
Yet most people will choose to sell their largest tax free asset worth more than £250,000 with estate agents on the basis of a lower fee and not on their expected performance.
Fund managers will transparently display their "Sharpe ratio", their expected returns, average drawbacks and many other quantifiable performance data.
How could one measure the performance of an estate agent?
The Sale ratio
The main task of an estate agent involved in residential sales is to...sell the properties listed! Would you like to use an agent more likely to sell or less likely to sell?
The first ratio that I calculate is what I call the "Sale ratio" and it is the number of listings / the number of sales agreed. You would be shocked to hear that most estate agent had a sale ratio below 50% prior to the first lockdown! The property market has been since very buoyant and most agents have witnessed a great increase of their sale ratio without probably even measuring it. We do and we collected the numbers using data that we have access on Rightmove. As such we are not allowed to publicly disclose the identity of other agents so we have prepared two versions, one available for all without names and one that we may send for your eyes only.
In what I call the "Tendring peninsula" Home Domus has the best "Sale ratio" among the top 25 agents over the last 12 months and across the CO13, CO14, CO15 and CO16 postcodes.
Price completed versus original asking price
This is expressed as a % and shows what on average an estate agent will achieve for their customers. Of course it is great for an agent to have a good sale ratio but the price needs to be good as anyone would sell anything if it was given away with successive price reductions!
Getagent.co.uk is a website who neutrally calculates that % by matching completed prices on the land registry with the first marketing price used by each agent on their listings. It is probably not 100% accurate but it gives a good idea if agents do manage to sell over the asking price or if they keep promising higher prices and fail to deliver.
Getagent.co.uk calculates a % over 6 months but we also transparently and truthfully display our own over 12 months of data.
In that same "Tendring peninsula" Home Domus 360 has the highest "getagent" % by quite a margin. Our 12 months % is 99.7% and 60% of our home sellers achieve a completed price at or above the original asking price.
Average daily exposure on Rightmove
Selling a home is very much like advertising a product on TV, we won't do a TV commercial for a house but Rightmove is the number one portal to be seen my more potential buyers. In the same way that a top advertiser would want the ad to be seen by a larger TV audience, an estate agent would wish for the listings to have the largest reach on Rightmove.
Rightmove calculates an average detailed views per property and per day. I like to look at it over the last week, the last month, the last 6 months and the last year.
For the Tendring peninsula, we have the highest Rightmove exposure over the last 12 months, 6 months, month and week by quite a margin.
Click on the picture below to see for yourself.
My basic 3 performance indicators
As you may see on the table above there can be a huge difference between estate agents, the "worst" one has only managed to sell 37% of what they were entrusted to sell and others only deliver a sale after dropping the price by 5% or more. Too often agents may try to gain your trust by showing you how so many more properties they have had on their book but is it proof that they have delivered the best outcome to all of them?
Do call and ask for information on one of their properties, would you like this agent to talk about your property in that way? Have they got the right answer? Do they ask the right questions? You really need to have complete trust as you won't be able to monitor how they handle the sale of your property with the general public. One of my favourite question is to ask: "Thinking of selling my property, why should I choose you?..." and let them answer!
Please check their listings on Rightmove and their website, do you like the pictures? Do they have a floor plan and a nice description? Do they make an effort with a proper video presentation or a 360 tour? Do you see a difference depending on the actual price of the property?
Transparency and truth
When one is truthfully confident to deliver that they promise, one should be confident about publishing transparently a number of details proving to the general public that is the case. We transparently publish our fee structure, our agency terms, our performance data and our reviews. Check their websites for actual proof and not just words or slogans.
This industry has a number of worthless awards based on the condition of payment from the estate agent receiving that award. Agents can then advertise themselves as "award winners" and appear as the best in their area. In reality they have paid for that privilege while the actual best agent in their area may have refused to do so.
In my opinion there are only very few awards that are likely to reward some of the best agents and none that focus on pure performance. It is a bit like giving a Formula one award to a pay driver while the real deal driver wins the world championship on the track.
At Home Domus, our best award is the accolade of a happy customer successfully moving home.
I have decided to privilege reviews on "ESTAS" as they are verified as genuine. All too often estate agents do manipulate comments on google and Facebook but it is worth looking at everything.
You may check all my reviews below.
If you wish to see all the details on this study, please send me an email or give me a call.