Zoopla slammed by agents for fee-saving advice
British property portal Zoopla has irritated estate agents – including its own customers – by issuing advice to consumers on how to negotiate property selling fees to save money at the expense of estate agents.
Property Industry Eye reports that Zoopla’s ‘Guide to Selling’ includes tips on what to consider when selecting an estate agent to act for a consumer to sell their property. It recommends:-
“If you’ve opted for a sole agency, try and get to a fee that is as close to 1% as possible.”
“If you’re selling a higher-value property, an agent may be prepared to accept a lower fee (because their return will be higher.”
“If your estate agency is trying to build its customer base in your area, they may be more willing to negotiate.”
“You may find that smaller, independent agents are more willing to negotiate fees than large nationwide agency chains.”
The advice was called out by PropTech co-founder and CEO Bryan Mansell in this LinkedIn post. He expresses surprise and disappointment in Zoopla for the advice and suggests they are “Crazy, reckless and asleep at the wheel.” He sums up their strategy to their paying customers as:-
- “Let’s charge them for their stock”
- “Then screw them on their fees”
Mansell suggests an alternative message from Zoopla:
“How about advice such as
-Ask your Agent what they are doing to help your move be less stressful?
-What technology are they linked to so that moving can be quicker? etc etc.”
Julian O’Dell, owner, Marvellous Training Solutions gives his take: “For the sake of balance…
“Advice to estate agents when choosing a portal:
“If you’re choosing a portal, try to get a fee as close to £0 as you can.”
“If you’re handling lots of properties from different outlets, a portal may accept a lower charge (because their return will be higher).”
“If your portal is trying to build its customer base in your area, they may be willing to negotiate.”
“You may find that non market-leading portals are more open to negotiate fees than others.”
Market context
Zoopla’s advice comes at a time when the U.K. property market is short of stock, with buyers outweighing the number of homes for sale. This context is one in which the advantages of using a good agent to land a property may justify paying fees at the higher end of the scale.
Zoopla’s chief marketing officer Gary Bramall admitted the advice ‘missed the mark’ in a LinkedIn message responding to the criticism. He said “Hi Bryan Mansell thanks very much for your message and sharing your feedback. I agree that this missed the mark and doesn’t reflect the service and value agents provide. I’d like to apologise for this and reassure you (and all others who have commented and read the post) that agents very much remain valued partners to us at Zoopla.”
Rightmove Déjà vu
The tone deaf advice is reminiscent of Rightmove’s bungled response to agents forced to close their at the start of the Covid-19 pandemic. Rightmove initially offered to defer fees rather than waive them for the period of closure. Zoopla smelt blood and launched a response, offering up to five months free for most clients — but nine months free for agents who left Rightmove if the agent signed an 18-month contract with Zoopla afterward at normal rates.
The subsequent period has shown that this initiative had a limited impact. Rightmove retained most of its clients and is continuing to grow revenue, profit and average revenue per agent (ARPA), reaching new highs and growing at a record pace in H1 2022, according to its latest results.
Meanwhile, we must wait until the end of September to find out how Zoopla performed in 2021. Zoopla did release agent branch and new homes development customer numbers in December 2021 which revealed it had almost 20,000. However, Zoopla’s U.S. owners, Silver Lake, who acquired Zoopla’s owners, ZPG in 2018, don’t release ARPA numbers. AIM Group estimated Zoopla received less than $350 per agent in 2019, a figure that likely fell in 2020 due to agent support costs.
It remains to be seen if Rightmove will attempt an initiative to benefit from Zoopla’s mistake. It may be that it is not worried enough to bother. AIM Group has contacted Rightmove for a comment and will update this news brief if we receive a response.
Agent response to Zoopla’s advice on selling
The first and obvious point to make is that Zoopla makes its money from subscription charges to agents to list properties on its platform. It earns nothing from consumers, though it is fair to point out that the motivation for its ‘Guide to Selling’ is to help people reduce expenses when selling a home to combat the cost-of-living crisis. However, the property market is expected to hit a downturn as a result and Zoopla’s agent customers will probably suffer as well due to lower property sales.
Zoopla’s advice shows a lack of thought and understanding of the situation its paying customers could face.
Here is a selection of the backlash it received from agents in the comments below Bramall’s LinkedIn post:-
David Hawes – Estate Agent and Letting Agent in Northamptonshire, North Oxfordshire & South Warwickshire.
“I assume we can all now expect a reduction in Zoola’s fee? Talk about kicking your customers in the b***s!”
Clare Phillips – Residential property sales and lettings. MNAEA. MARLA. Phillips George – Sales & Lettings
“And Zoopla have just put our subscription up??? Plus, they own two of the agency CRM systems? What are they thinking!”
Sam Hunter – COO at Homesearch
“You don’t often see suppliers actively working against their paying clients. Just wow.”
Gavin Curd – Managing Director at Simon Miller Group
“This will certainly prompt an interesting conversation when I meet with my account Manager next week.”
AIM Group has contacted Zoopla for a response, they replied and said they had nothing to add further to the response Bramall made on LinkedIn in reply to Mansell’s post.
