Adam Day is a leading property industry figure but not popular with some high street agents, who don’t thank him for helping usher in the online and hybrid agency era.
After a career in traditional estate agency in 2006 Day successfully established online agency Hatched, six years ahead of Purplebricks.
The company was eventually sold to Connells in 2015 but last year the corporate closed down its acquisition, claiming that the hybrid model faced a bleak future.
Day subsequently worked for two more online agencies, easyProperty.com and Emoov, calling his time at the latter as a ‘debacle’.
But his career now has a new twist. Two weeks ago, he returned from Florida where, unexpectedly, he was offered the UK franchise for US estate agency giant eXp Realty. He is now in the process of setting it up.
“The culture is different in the US; it’s a much more helpful and supportive one compared to the UK. Here, you get hammered on industry discussion forums, although you do get private message of support,” he says.
Day has a challenge on this hands. There have been several attempts by US-based estate agencies to establish themselves in the UK over the years and not all have achieved the size and turnover they were hoping for.
Keller Williams has six offices in the UK, Remax has 11 branches and Coldwell Banker has one. Century21 is the most successful having been here for 15 years. Its franchise in the UK is owned by auction group SDL and has 49 offices.
Day says he feels the time has come for these kinds of businesses, many of which share features of both online, hybrid and traditional high street estate agencies.
He claims that hybrid estate agencies, and in particular Purplebricks, have shifted the meaning of what an estate agency is for consumers, but also disrupted the industry with their ‘work from home’ models for agents.
The significant costs of running a high street office including sky-high rents and business rates, also mean operating a tech-supported franchise is becoming more attractive to more entrepreneurial agents.
“I’ve said for many years that while Purplebricks like to talk about themselves as a disruptor I don’t think they’ve yet disrupted the consumer as much as they told their investors they would.
“But what they have done is change the UK employment model of estate agency and made it acceptable to be self-employed.
“Before Purplebricks I wouldn’t have dreamed of being self-employed unless I had my own business with my name over the door.”
Day says he has received just over 100 enquiries from former or existing online estate agency ‘staff’ since touching down from the US.
“A lot of the feedback I’ve had over the past two weeks is that they love the online model and don’t want to return to the high street, but don’t like earning a few hundred pounds per listing,” he says.
“I think our model fits [agents’] needs because they will be better motivated to get out of their bed in the morning if they’re earning £2,000 per sale instead.
“I’m also in favour of non-exclusive territories; I wonder if having a guaranteed patch makes for lazy estate agency.
“When you’re being fed leads and have a guaranteed area then where’s the motivation to really service that customer, other than your own pride and work ethic?
“eXp has an online platform and journey. There is a material different between us and hybrid agents, in that they impose the fee levels on the agents, whereas we leave them free to charge what they want.”
Day says working for a hybrid agency isn’t truly being self-employed; companies like Purplebricks for all intents and purposes treat them like staff but then don’t have the costs of employing them.
Day is also keen to ensure that eXp is not seen by the industry or consumers as Americans coming over the UK to ‘impose’ their ideas on the UK of how to sell homes.
“I’ve told them that I don’t want eXp people coming over here from the states all the time – I want to be left alone to mould it to the UK way of doing things. They’ve been very good in that respect.
“It’s why American companies have struggled here in the past – they come over with a gang of US realtors thinking they can ‘take on’ the UK, but end up leaving and handing it over to a local franchisee.
“For example, I think Keller Williams have been too ‘American’ about it in that way.”
DealMakerz put this point to Ben Taylor, CEO of Keller Williams, who in terms of business model is Day’s main competitor with a four-year start on him.
Taylor recently took over the licence for the UK and says that after initial teething problems following its launch in 2015, the business is now beginning to gain traction.
It has 200 agents and hubs in Glasgow and Leeds as well as four within the M25 including central London.
“The Americans are a lot further down the road than the UK when it comes to being a more professional industry, and as a general rule the customer is not serviced to a very high standard here, and that’s the opportunity we have,” he says.
“We’re on a rate of growth that is akin to what Keller Williams as already achieved in France, Spain and many other countries which definitely are ‘not America’.
“A lot of people refer to us as an American company, but I’m not sure how many countries you need to be in before you can be called a global 0ne instead.”
Keller Williams agents are intensely trained and the company claims to be investing $1 billion in its tech platform. Day has a busy few years ahead of him.