How to start an estate agency franchise
It's hard work but selling houses could also be the key to success
If you are committed to starting up a business, dream of fast cash and satisfaction in the workplace yet are stuck for ideas, then you’ve come to the right place.
If this appears to you to be a business proposition ‘made in America’, then you would be right. This is franchising of estate agencies and is big business in the US. However, this is now well and truly inside the UK too and is a business that generates high commissions for the franchisees.
US firms, such as Century 21, are now trying to crack the UK market alongside some of the most-established brands in the UK outside of the financial sector, including Legal & General and Winkworth.
What is it?
We have all heard the horror stories and told the jokes, but do you know what an estate agent actually does? Most of us are on the receiving end at some point in our lives as the vast majority of property transactions go through as estate agent. But maybe you have wondered what it is like from the other side.
An estate agent acts as the representative of someone who wants to sell their house and has a duty to get the best price for the owner. To get started in the business, they need to convince someone to sell their house through them – as opposed to any other agent on the high street.
Sounds easy – well think again. Buyers aren’t going to just walk through the door and give you their commission. Getting properties to list with you means spending a lot of time on the phone, becoming entrenched in the local community, being aware of what is coming on to the market and, increasingly, using mailshots to entice homeowners to sell their properties. Then you must be able to offer owners the confidence that you will sell their house better and faster than anyone else.
The second part of the process is trying to convince someone to buy from you. Part of that will be from having a high street presence and strong brand name that entices customers to walk through the door. But should also be trying to encourage people to come to you. Your franchise fee is likely to cover some form of marketing but you need to check how active each franchisor is. Then you should also be mailing flyers or even individual letters, if you can access the electoral roll, to try attracting customers to you. Advertising in local newspapers or magazines is also a must for most estate agents.
“You are listing properties and selling them. It is more about marketing and sales than a romantic notion of being in property,” says Bill Pegram, now a franchise consultant with Horwarth Franchising but formerly of Century 21. A lot of people want to be “in property” rather than be an estate agent, he added.
Who is it suited to?
Running an estate agency tends to appeal for two reasons, Cliff Hulley, IT director at Century 21 explains. “Firstly, a lot of people are already involved in the financial services sector and they see estate agency as complementary to what they do. Usually when someone is looking for a house, they will also be looking for a mortgage. Secondly, property is moving up and you don’t need any formal qualifications to get into it,” he said.
At a more fundamental level, it also appeals to a lot of people – everybody needs a house so it is a sector that most people will have some exposure to.
As the housing market continues to flourish it is also a sector that has attracted considerable interest. Even though house prices are slowing down, there are still no signs that buyers are holding back from purchases in anticipation of a big price slump.
There are no real qualifications for this business but numeracy and literacy are a prerequisite. But in essence this is a people business. You must be a good communicator, able to inspire trust and confidence in the public and reassure people as they go through the sale process. But you must also be able to carry on when things get a bit slow. So a sunny disposition and perseverance will be crucial.