The Headlines
- In 2021, a whopping 86% of all new instructions came from people whose properties were not already on the market (Off Market instructions)
- 70% of these had not been on the market in the last five years
- Only 6% of new instructions came from people who switched from one agent to another
- And the remaining 8% were multi-agency
- The likelihood of selling with a second agent is actually lower than if you only use one agent
- On average 71% of properties will eventually sell but with a second agent that drops to about 50%
- Only 4% of listings between 2020 and 2017 actually sold after switching agents!
For a number of years, there has been a stat that has been bandied around the property industry which I have always found hard to believe; that over 50% of homes sell with a second agent. It is a statistic that is often quoted by industry leaders and prop-tech suppliers (perhaps with an ulterior motive) and often goes unchallenged. I have always been highly skeptical of this figure, so TwentyEA decided to delve into our rich database to find out the truth.
The findings may come as surprise to many.
In 2021, only 6.2% of vendors actually switched agents. Even when you take into account that 8.2% of New Instructions were multi-listings, over 85% of New Instructions in 2021 were off market.
Now you might claim that 2021 was a unique year in the fact that there was such a large supply-demand imbalance that it was almost impossible not to sell a property as there were so many buyers fighting over what little property came to the market. And this argument does have some merit; so we decided to look at the numbers going all the way back to 2017 to check if this was an anomaly or not.
The full stats can be seen below:
As you can see, the year with the highest proportion of vendors switching agent was 2019 but this figure was still only 9.1% of the overall market. If you take the average over the last 5 years, only 7.7% of vendors switch agent and 10.3% of instructions are multi-listings. This means that on average 82% of all new instructions were off market (i.e. not already For Sale) over the past 5 years.
Now we all know that not every property that is listed goes on to sell, but the big question here is how many properties did sell after switching agent?
We know that nationally, on average 71% of properties listed will actually end up selling but we can see here that when listing with a second agent, that drops to an average of 50.8% between 2017 and 2020 (ignoring the 2021 figure as around 30% of transactions are yet to be concluded).
So, not only do you have a lower chance of actually selling at all, if we look at the number of exchanges from properties listed with a second agent as a percentage of the total number of instructions, between 2017 and 2020 only 4% of listings achieved a sale after switching agent - not the 50% that is often stated!!
Now we have successfully debunked this myth, my next question to estate agents is:
‘What are you doing to attract the 82% of ‘off market’ properties that come to market?’
Many agents have traditionally spent a large proportion of their marketing budget ‘prospecting’ or ‘touting’ their competitors’ properties at various trigger points along the vendor’s journey.
We at TwentyEA have our own Prospect platform for targeting ‘on market’ properties and whilst there are always going to be unhappy vendors that want to change agents, we have proven that the size of this market is relatively small.
I would argue it is much better to divert the majority of your marketing spend to the pool of people who are still off market but looking to move, rather than those who have already instructed another agent.
Traditionally this has always been quite difficult and expensive to do as nobody has a crystal ball and the only way to reach all of these people would be to do a blanket mail drop of your entire patch, which delivers low response rates and a low ROI as the majority of people you are mailing have no intention of moving.
Well times have changed and it is now possible to anticipate homeowners that are likely to sell. TwentyEA has an AI machine led data model called Forecast, which can predict to a high level of accuracy, who is likely to move in the next 6 months. So much so, that in the last 6 months of 2021 Forecast successfully predicted over 81% of the instructions that came to market.
With a more targeted approach to mailing campaigns, it reduces your costs and increases your ROI. Remarkably, our Forecast model is currently generating over 40% of all valuations for one of our largest clients.
As well as the traditional direct mail approach you can also use our Forecast audience to target these homemovers via email, social media and mobile to offer a coordinated omni channel approach.
Don’t lose out to your competitors any longer, talk to us about how Forecast can get you in front of potential vendors before anyone else.
