Since we started on the road of selling homes in Cheshire, we have realised that the popular misconception amongst the public is that all estate agents have branches in order to help them sell property. Who started this myth and why is unknown but I can say, with absolute certainty, is that branches do not really help to sell homes. Branches play virtually no part in the selling process and haven't done so for many years. In fact, branches are a massive drain on an estate agents finances and one of the many reasons they fail.
Why?
We looked at opening a flagship branch in Alderley Edge, Cheshire and were shocked at the estimated cost of just opening the doors.
An annual rental of £48,000 plus business rates etc push the annual cost to over £75,000. We have to use fibre optic internet for the website, led lighting for the office, shop fitting and office equipment would have pushed the cost to £100,000 in our first year. Marketing and branding exercises in the community was estimated at £30,000 and then we have salaries, NI, taxes, company cars, stationary etc and so putting £200,000 as a starting figure is a realistic sum.
Putting that into perspective, we would need to sell a £1 million home every two weeks just to open the doors, something not even our biggest competitor is doing and they're more established that we are!!
It's actually cheaper to advertise on the local radio station or regional TV adverts than open an estate agents in Alderley Edge in Cheshire. I dread to think the cost of doing the same in Weybridge, Esher or Virginia Water Surrey.
Estate agent branches are used primarily as admin centres that deal with buyer enquiries via the telephone and Internet. They also deal with all back office tasks and their principle purpose is to function as a sales and marketing tool to sell the actual agency to new property sellers. The idea is that, if people are passing the branch every day, the agency will be at the forefront of their minds when they decide to sell, hence the agency will be invited to 'value' their property and pitch for the right to sell it.
This tactic works extremely well for some agencies, which is fair enough. The problem is that many estate agents still preach, to potential vendors, that their local branch is an excellent sales tool for selling your home, which they're not.
What evidence do we have to prove this?
Most estate agents can't fit every single property they are either selling or renting into their window displays, unless they have a very small stock and or are selling/renting properties so quickly that there's no time to display them. Therefore, if your home isn't displayed in the window how is it helping to sell your home.
Next time you have an estate agent claim their branch helps to sell property, ask them how they manage to fit all their properties into their windows?
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