The door opens to a bet­ter deal for home buy­ers

The Scot bring­ing US meth­ods to es­tate agency says the in­dus­try is in need of a shake-up , writes Stephen Breen

The Herald Business - - Century 21 -

IF STU­ART WHITE is cor­rect, the es­tate agency in­dus­try in the UK is about to un­dergo a trans­for­ma­tion ev­ery bit as rad­i­cal as that ex­pe­ri­enced in the fi­nan­cial ser­vices sec­tor in the 1980s to be­come a prop­erly reg­u­lated ser­vice which cus­tomers can re­ally trust. From an of­fice in Coat­bridge, White is plot­ting a revo­lu­tion in the way we buy and sell houses in this coun­try as he rolls out a se­ries of Cen­tury 21 of­fices – part of the big­gest es­tate agency fran­chise in the world.

Since se­cur­ing the UK li­cence from the US-based cor­po­ra­tion in 2005, 40 Cen­tury 21 of­fices have opened – 33 in Scot­land with the rest in Lon­don and Der­byshire. White, a for­mer milk­man and ap­pren­tice welder from Glas­gow, has am­bi­tious plans to open 500 out­lets by 2010, which would make Cen­tury 21 the big­gest sin­gle branded chain of es­tate agents in the UK.It would still be dwarfed by Coun­try­wide, which has more than 1,000 of­fices, but as White points out, they op­er­ate as a net­work of sub­sidiaries, in­clud­ing Slater, Hogg & How­i­son.

In White’s opin­ion, the whole process of sell­ing prop­erty in the UK is so frag­mented and rid­dled with in­ef­fi­cien­cies that it is primed to fail clients. In a typ­i­cal cor­po­rate es­tate agency, five or six dif­fer­ent mem­bers of staff might be in­volved at some stage in sell­ing a

sin­gle house. A val­uer will es­ti­mate how much a prop­erty will achieve and agree a mar­ket­ing strateg y with the client, but will not be in­volved in sell­ing the house. A ne­go­tia­tor may or may not stick to the strat­egy, and any num­ber of staff might ar­range view­ings but will not go to the prop­erty them­selves. Some com­pa­nies hire part-time staff to let view­ers through the door, but who can’t an­swer any ques­tions about the house.

“There is no one in­di­vid­ual who takes own­er­ship of the client,” says White, the com­pany’s man­ag­ing di­rec­tor. “The cor­po­rates have made it al­most a fac­tory pro­duc­tion line with dif­fer­ent peo­ple par­tic­i­pat­ing in dif­fer­ent com­po­nents of the process. When you have a good team that de­liv­ers all the time, you get good trans­ac­tions. Not ev­ery trans­ac­tion is rid­dled with in­ef­fi­cien­cies, but when you don’t have a good team, you start to in­cur prob­lems.

“Many peo­ple com­ment that they feel like they are sell­ing their house them­selves. With house price fees in ex­cess of £1000, is it not rea­son­able to ex­pect a higher or bet­ter level of ser­vice than what’s on of­fer now?”

In 2004, a re­port into the £5bn plus a year in­dus­try by the con­sumer or­gan­i­sa­tion Which? found only one in ten buy­ers and sell­ers strongly felt they could trust an es­tate agent, only a third said they were kept well in­formed, and 70% thought es­tate agents fre­quently gave mis­lead­ing in­for­ma­tion about prop­er­ties.

In the UK, es­tate agents are not li­censed, al­though other pro­fes­sion­als in­volved in the busi­ness such as so­lic­i­tors and mort­gage ar­rangers are. In other coun­tries such as the United States, Aus­tralia, Ja­pan, France, es­tate agents are li­censed and a sin­gle pro­fes­sional deals with the seller from start to fin­ish.

When it comes to clean­ing up the in­dus­try, White, 39, is not afraid to stand up and be counted. He was sacked from Coun­try­wide North in 2004, the year af­ter he blew the whis­tle on the con­duct of se­nior mem­bers of staff. The Of­fice of Fair Trad­ing sub­se­quently found Coun­try­wide North’s man­ag­ing di­rec­tor, Mairi Eck­ford, sales di­rec­tor, Michael Miller, and for­mer area di­rec­tor, Stu­art Black, had breached the Es­tate Agents Act and the Es­tate Agents (Un­de­sir­able Prac­tices) Or­der by fail­ing to dis­close their per­sonal in­ter­est in new build prop­er­ties that they had bought and were sell­ing via Coun­try­wide. Af­ter Coun­try­wide, White, who has a back­ground in in­sur­ance and bank­ing, spent some time look­ing at de­vel­op­ing fi­nan­cial ser­vices for es­tate agents Re/Max, which gave him an in­sight into a to­tally dif­fer­ent way of op­er­at­ing, with a sin­gle agents re­spon­si­ble for the whole trans­ac­tion.

This gave him the in­spi­ra­tion to make an au­da­cious approach to rep­re­sent Cen­tury 21 – the world’s big­gest real es­tate fran­chise with 144,000 es­tate agents in 44 coun­tries – to Bri­tain.

Af­ter call­ing the multi­na­tional’s New York head­quar­ters, White got through to a vi­cepres­i­dent and ex­plained his plans. “The im­pres­sion I got was ‘yeah, yeah, we’ll send you out some in­for­ma­tion and prob­a­bly never hear from you again’. It was very cool and I now un­der­stand that, be­cause Cen­tury 21 around the world tends to be bought by cor­po­rates and sel­dom by in­di­vid­u­als.”

By Fe­bru­ary 2005, White was granted an in­ter­view and must have made an im­pres­sive pitch be­cause in June that year the Amer­i­cans granted him the Cen­tury 21 li­cence for the UK. White set up a hold­ing com­pany to buy the li­cence for 25 years for a fee in ex­cess of £1m. Share­hold­ers pro­vided around half the funds, but White was also given as­sis­tance by North La­nark­shire Coun­cil, La­nark­shire Busi­ness Gate­way and HSBC.

“I gen­uinely be­lieve that es­tate agency is now ready for change be­cause cus­tomers are ready for change,” said White. “When I look back at my ex­pe­ri­ence in the fi­nan­cial ser­vices in­dus­try in the 1980’s it was warned time and time again for not do­ing a great job for clients, for not be­ing open and trans­par­ent, and about the need for bet­ter reg­u­la­tion.

“Fi­nan­cial ser­vices sales­men were ranked along­side dou­ble-glaz­ing sales­men, but the 1986 Fi­nan­cial Ser­vices Act paved the way for reg­u­la­tion in 1988. Now there is strong reg­u­la­tory regime and ev­ery­one ac­cepts that.

Es­tate agency is an in­dus­try that waits un­til there is a prob­lem or an is­sue be­fore any­one starts to take any ac­tion, then it has to try to fit it into cer­tain cat­e­gories.”

The 40 Bri­tish fran­chisees who have signed up pay a fee of £22,500, which cov­ers five years. For this, they are sup­plied the Cen­tury 21 sig­nage, of­fice furniture, email and web fa­cil­i­ties, mar­ket­ing ma­te­rial and on-call help from the head­quar­ters team in Coat­bridge.

White be­lieves one of the main points of dif­fer­ence be­tween Cen­tury 21 staff and their ri­vals is the train­ing they re­ceive. All re­cruits must do five days of com­pul­sory train­ing and then pass an exam or they don’t get hired. They also have to un­dergo 50 hours of pro­fes­sional train­ing over the course of a year, in much the same way as li­censed pro­fes­sion­als such as so­lic­i­tors and ac­coun­tants have con­tin­u­ous train­ing.

But the key rea­son he be­lieves Cen­tury 21 will be a suc­cess is that house-sell­ers want to have a sin­gle pro­fes­sional deal­ing with the sale.

Not ev­ery­one is con­vinced that large chains are the way the es­tate agency in­dus­try should be go­ing. Black Horse sold its es­tate agency of­fices to Brad­ford and Bin­g­ley, which in turn dis­posed of them to Coun­try­wide.

White, how­ever, is bullish about the prospects for Cen­tury 21. “There is a need for some­thing bet­ter – a ser­vice ded­i­cated to the client, which is not avail­able in the High Street,” he said. “The feed­back that we’ve got from our clients is that they love hav­ing a sin­gle pro­fes­sional deal­ing with them all the way through the trans­ac­tion.”

In the next 12 months, White is plan­ning to in­crease the num­ber of Cen­tury 21 out­lets to 80 and he is in ne­go­ti­a­tions with a num­ber of large fi­nan­cial ser­vices or­gan­i­sa­tions about pro­vid­ing exclusive prod­ucts for their clients.

Few peo­ple have a good word for es­tate agents th­ese days, but Stu­art White be­lieves the revo­lu­tion he is or­ches­trat­ing from his Scot­tish base could be about to change all that.

“I came into this to make es­tate agency a bet­ter prod­uct and I gen­uinely think it can be a bet­ter prod­uct and clients should get bet­ter pro­tec­tion than they do,” he said.

Revo­lu­tion­ary: Stu­art White plot­ting a na­tion­wide shake-up

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