eXp UK boss Adam Day wants existing branch-based estate agencies to convert to the US-style self-employed ‘umbrella model’ that can absorb both technological and regulatory costs.
As high street estate agencies feel the pinch more than ever before Day (main picture) is looking to ease financial pressures by offering a ‘brokerage’ model to all.
BRICKS & MORTAR
In the US many so-called ‘bricks & mortar’ estate agency businesses – known as brokerages – work in partnership with a larger ‘platform’ which sits above.
In the UK a similar model for financial services already exists with financial advisers and mortgage brokers working as an appointed representative of, say, Mortgage Advice Bureau or PRIMIS (part of LSL Property Services) being directly authorised by the Financial Conduct Authority.
Day wants traditional high street estate agencies with an employed workforce to become an eXp partner business, transforming their valuers and listers into self-employed agents in association with the eXp brand, whilst also keeping their existing brand.
Under this model business compliance would be supervised.”
Under this model business compliance such as anti-money laundering rules and GDPR would be supervised and guided by eXp UK while technology like lead management systems and CRM tools would be developed for agents with a nominal monthly fee.
And Day, UK Expansion Leader at eXp UK, reckons those adopting the model could expect bigger commission-split incentives for their team, lower non-performance staff costs as well as de-risking the potential loss of productive staff to the self-employed brands.
EVOLVING AND ADAPTING
He says: “Britain’s estate agency sector is evolving and adapting. Not just in technology and with new business models gaining traction but also in recognition of a return to more normal levels of house price growth and transaction numbers.
“Agency P&Ls are tighter these days and understandably, colleagues will be looking at ways of improving revenues whilst also mitigating overheads.”
He adds: “Our new brokerage partner model provides all the benefits of being a corporate business, without the downsides of being a corporate business.
“Traditional agents might be surprised at the improvement to their economics that can result from the new ‘brokerage’ partner model that we’re introducing, as well as benefits to their culture and their competitiveness.”