Industry Quake 2 - Why I think Agents' Mutual will fail and potentially damage the businesses that join it

Would you sign up to a five-year franchise agreement with an unknown, unproven company, which compelled you to promote their brand, made you into an appointed representative and took away your freedom to determine your marketing strategy

If you are thinking, what a ridiculous question' I agree, it is ridiculous yet, from my reading of the situation that is exactly what thousands of estate agents have done, or are considering doing between now and the end of the year.

Before we go on I have to say that I do have a personal axe to grind with Agents' Mutual and in particular with Ian Springett. He seems like a charming chap but I was recently banned by him from attending an AM meeting at a Savills office earlier this year for being a public dissenter.

I will put my hands up to this accusation, I have been and still am an opponent of the exclusivity rule imposed by Agents' Mutual, I think this rule is regressive, anti-competitive and not something I could be party to.

What I can't understand is why, if an agent feels they can drop Rightmove or Zoopla, they don't just do it, why do they need to sign a five year contract with Agents' Mutual first

I am also instinctively against banning non-high street estate agents, as the idea makes me feel like King Canute!

In other ways I think that the idea of an agent-owned portal is a good one. I also believe that both Rightmove and Zoopla will be very lucky to survive the next five years in their current form and that we will probably look back at this great debate as having missed the real issues that are driving change in the industry.

I was however prepared to confine my views to our community but Ian, I want you to know that it was your decision to ban me from your meeting that directly motivated me to write this article and why, over the coming weeks I intend on writing a whole series of articles on the subject.

In these articles (as with my previous article on the subject that has now been read over 86,000 times https://www.estateagenttoday.co.uk/385-industryquake-2014-seismic-forces-shake-rightmove-zoopla-duopoly) I will endeavor to explain as objectively and logically as possible why I think Agents' Mutual is a terrible, flawed idea that has the potential to damage the industry and the reputations of all who join it.

As this is going to be a series of articles, let me take a step backwards, and deal with just one issue which I think backs up my view. Here is a headline taken from an industry blog on Friday.

Agents' Mutual hits crucial 4,000 milestone'

The question that crossed my mind is, have they really

The headline ran to great fanfare; back slapping and no doubt mutual (pun intended) support. However, lurking beneath the positive headline grabbing number there is an inconvenient truth.

The truth is that many of the agents included in this figure have simply signed a non-binding letter of intent to commit to Agents' Mutual once the magic figure of 4,000 is achieved. This creates a paradox, how can one commit to a commitment that is not yet committed

Paradox aside, accepting this figure has been surpassed, I wonder how many of these agents will actually go ahead and commit to Agents' Mutual, not all of them certainly. I would ask Ian Springett, but I don't think I will get an answer. However, I will quote Eric Walker who posed these two questions in response to Friday's article.

My two questions are how many of these have signed binding agreements rather than letters of intent; and how many will actually walk away from one of the duopoly and cease advertising on all other portals but their chosen one'

Ian, please correct me if I am wrong but I have been given to believe by a source that Agents' Mutual have poached a number of the more money motivated salespeople from both Rightmove and Zoopla, tempting them over with big salaries and the promise of a commission bonanza.

I am given to believe that these salespeople are paid commission for obtaining non-binding letters of intent, irrespective of whether the firm actually goes ahead and contracts or not, is this so

If it is so, it doesn't take a genius to work out how the sales pitch could contain a phrase like you have nothing to lose'. The relevance of this point is that Agents' Mutual have made a big song and dance about the need to hit 4,000 offices to become a credible force, so have they done it I say, not until these agents have committed themselves, which brings us back to the paradox.

Ian Springett was quoted as follows:

We are now at a stage where we will mount a credible and disruptive competitive challenge, and your support will make it even more powerful.

Well Ian, if you have 4,000 offices who have signed a binding agreement, I for one want to hear you say it because there is a very big difference between a non-binding letter of intent obtained by a commission-driven salesman and a signed five year contract.

Finally - for today at least - I have one further thought, given that all Agents' Mutual's salespeople had to do was get agents to sign non-binding letters of intent, how come it has taken them so long to reach 4,000 offices

I suspect the answer to this question is that there are not that many agents out there, other than the original few who are behind this venture that are taking it seriously and I would love to be a fly on the wall of the boardrooms of those that have as launch day approaches.

Next week I will be looking in more detail at what the next five years may hold for estate agency marketing and why hitching your star to a wagon that may not have any wheels may be the worst decision you could ever make.

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Article written by Simon Shinerock, Chairman of Choices Estate Agents.
For more information on Simon see his LinkedIN profile: https://www.linkedin.com/in/simonshinerock