Is agency fee training a conspiracy to illegally fix prices?

Discussion about agency fees

I was recently accused of conspiring to fix estate agency fees, contrary to the Competition and Markets Authority (CMA) regulations, so I just want to challenge this as I am passionate about this subject. We charge the lowest commission levels in the world, yet we manage some of the most complex and unstable transactions. Anyone who has ever attended my training knows that there is always a strong bias towards raising fees – usually meaning around 2% and for many 2.5%.

Some agents have told me that they won’t attend my current RawlingsRoadshow for fear that it could be regarded as illegal collusion to fix prices between estate agents. In my understanding, illegal price fixing is where two or more estate agencies agree to adhere to a minimum fee level locally so that whoever gets the business, the consumer is prevented from getting the best deal they can. This is rightly an illegal practice.

But is a group of 60 listing agents in a meeting room being exposed to professional training techniques that enable them to protect whatever commission they individually chose to charge collusion? Certainly not! They do not discuss fee levels between themselves, most of them are not direct competitors, and there is no implicit or explicit agreement to fix fees. 

Indeed, it is the welcome presence of low cost/low value agencies that allow regular agents to shine. Internet-only agents have failed to gain significant traction and have exposed the public to the frustrations of a remote/low-involvement service. Mr and Mrs Seller would have paid much more for the right service. But agents have run scared, in the unfounded belief that people prefer cheap. They simply don’t – ever noticed that low-fee special offers don’t work?! People always pay more for the product or service they prefer. This applies to chocolate, shoes, suits, cars, holidays, bread, jewellery – in fact anything that is not a commodity (unlike say petrol where we’ll drive half a mile to save a tenth of a penny per litre!)

The problem is that agents either don’t know how to demonstrate their “preferable” traits, or they try too hard to sell the commoditised elements of their service. Then they wonder why sellers choose the cheaper agent. Let me tell you – it wasn’t because they were cheaper! It was because the agent failed either to demonstrate preferable value or, more likely, they failed to persuade the seller to choose them irrespective of the fee charged. They simply didn’t say the right words, in the right order, at the right time! 

Those who have attended my seminar come away not only with over 80 fee-protecting dialogues but, more importantly, a change in approach and a confidence that not only supercharges their commission percentage, but also their ability to secure the instruction, thereby enhancing market share – double whammy!

It was kind of Sean Newman, completely unsolicited, to record such a fabulous video about the RawlingsRoadshow and bookings are now being taken for the last remaining seats at 17 UK venues during September, October and November.