Agents unite to slash portal fees as Rightmove axes staff
A number of leading estate agencies are locked in negotiations with Rightmove and Primelocation about the terms of their contracts, which come up for renewal at the end of the year.
The talks come as Rightmove has revealed that it is to axe 20% of its staff.
Marc Goldberg (pictured), head of residential at Hamptons International, says that the key objective of the group, which is understood to comprise national and London-based agents, is to negotiate “significant reductions” with the portals and a number of their competitor sites.
“The portal world is changing significantly and there has been a rise in free sites. Globrix is free, as is the National Association of Estate Agents’ new site. They’re presenting a free option when free is an excellent word for agents.”
Goldberg says Hamptons’ enquiry levels from the portals have depreciated rapidly year-on-year, thus he will consider shunning any portal, which fails to offer the group “a meaningful reduction” in fees.
“We would rather not, but it is not inconceivable that we would come off if we didn’t achieve this.”
Grenville Turner, chief executive of Countrywide, confirms that he is in negotiations with most of the property portals about the group’s future relationship with them.
He says the negotiations are based on a year-long internal research project the group has undertaken to examine its online strategy, including the coverage it gets from individual portals and their fees.
“The main aim for us is to represent our properties to the widest coverage; all portals have their strengths and weaknesses,” he says.
He adds: “It is no secret that the deal we had with Rightmove was competitive given our previous relationship with it.”
Countrywide was a founding member of the portal.
Turner refuses to comment on his negotiations with the portals or his overall portal strategy, as does Lee Watts, managing director of London-based Kinleigh Folkard & Haywood.
A spokeswoman for KFH says: “We can’t comment on our negotiations with the portals as we are in discussion at the moment and no deal has been agreed yet.”
Paul Jarman, director of Savills’ residential agency group, says: “Whatever is agreed will take effect on January 1; I can’t say any more because it would jeopardise negotiations.”
The group’s negotiations follow efforts by industry pundit Henry Pryor, who on behalf of his buying group, Estate Agency Buying Group, is aiming to unite agents to tackle portals about their fees. The Negotiator exclusively revealed Pryor's campaign on October 1.
Some 1075 agents had signed up at the time of writing today.
Pryor says: “It is time for agents to do something about portal costs. With so many free-to-list sites and a market on its knees, can they really expect agents to continue to pay 2008 prices into next year
"A bit of contrition would go a long way but Rightmove has gone the other way and threatened agents who leave with even higher re-joining rates. To borrow a line from the US elections - 'Time for Change!'
“This is not an anti-portal campaign. Like most agents, I understand the value that these huge media-owned sites bring but this market isn't delivering sales which means that agents don't have to advertise even if they could afford to.
"The fact is that the portals need to show that they understand that the market is very tough and that they need to do their bit to help. These big websites may cost a lot to build but no one seriously thinks that they really have overheads that justify these charges. This is not the time for conspicuous profiteering. A fair rate is all we seek.”
Mile Shipside, commercial director at Rightmove, says: “The founder agent shareholders of Primelocation were locked into long contracts when they took the money from the Daily Mail Property Group. These companies are now naturally looking at the value they receive from their respective advertising strategies, as their contracts come to an end soon.
"We are confident that we provide a very good return on their investment. It’s up to the other advertising mediums they use, like Primelocation or newspapers, to prove the same. Importantly, the successful and established internet sites offer much better value in these tough times. Prospective buyers are still looking."
Primelocation was unavailable for comment.