Punch Taverns Watch

Porty · Post by **Porty** » 14 Mar 2007, 14:56

I see Remax Estate Agency Franchsie is opening here in Portobello. It is next to Carlo's chip shop.

Dadaist · Post by **Dadaist** » 14 Mar 2007, 15:02

Porty wrote:I see Remax Estate Agency Franchsie is opening here in Portobello. It is next to Carlo's chip shop.

Any chat about them? Dodgy or sharp practise? Unreasonable terms or hopes given to franchise holders?

Are they serving up tasty treats or are their newspapers just tomorrows chip wrappers?

Porty · Post by **Porty** » 14 Mar 2007, 15:17

Don't know very much about them. However, I used to be in that business.

I do know that in exchange for a fee of around £20kwith Remax you get some training on Estate Agency, an office territory and the backing of global organisation that claims to sell more properties than any other Worldwide, which may be true but hard to substantiate.

Alternatively Dada in less than a week you can become a self-employed estate agent for about an £8k fee, you get to work from home and all you need do is go out and find properties for sale. Knock on peoples door or ring their bell, introduce yourself and ask if they would consider selling. Its a potentail goldmine.

I reckon Remax have recruited about 18-25 "estate agents" (as opposed to the office owners) in Edinburgh over the last 12 months. It may be more? I just did a quick search of all of the Edinburgh properties they have for sale. Do you know they have 178 properties listed? And once you deduct the ones that are Sold or Sold Subject to Contract that leaves about 130. I've not done the math but that could be lucrative.

Edinburgh is a tough market for Estate Agents as Solicitors have the ESPC, which probaly has more than 4000 properties for sale this week. and 6000 at peak time. Having said that IMHO there are a handful of really good agents in Edinburgh.

SoupDragon · Post by **SoupDragon** » 14 Mar 2007, 15:22

See the Plough has a for sale sign up.
Pub at foot of Bath St def. closed now

Porty · Post by **Porty** » 14 Mar 2007, 15:29

SoupDragon wrote:See the Plough has a for sale sign up.

Is it Remax?

CatzVP · Post by **CatzVP** » 14 Mar 2007, 15:34

Remax and Royale le paige are the main estate agents companies over here, http://www.mls.ca
and strangely most estate agents are minted.

Dadaist · Post by **Dadaist** » 14 Mar 2007, 15:46

Porty - fascinating, didn't even know people cold-called you to flog your house!

As an example - say there's a house worth £400,000

If a Remax dude (or dudette) knocks on the door and gets the person to sign up and put it on the market with them as the estate agent - how much do they (remax) get when it sells - is it a % or a fee?

Is it the same amount if you do it through one of their shops - sorry if this is a dumb question but I guess what I really want to know is, given a fee/% of sale price:

1. how much goes to door-knocker
2. how much goes to Remax office person
3. how much is spirited away to whoever 1. or 2. bought the franchise off

Porty · Post by **Porty** » 14 Mar 2007, 19:40

Dadaist wrote:Porty - fascinating, didn't even know people cold-called you to flog your house!

Not got time foir the rest at the mo. Cold calling will be done over the telephone too and it won't be random. The "agents" will mostly get leads from the ESPC, they will monitor properties that are sticking then approach the sellers.

If you look at the Remax site its dominated by second-owner new build properties that are hard to sell. Proactive Estate Agents can make a difference. Most Solicitor based Estate Agents are not house sellers theyare advertisers. Lets face it for a big percentage of edinburgh properties that is all it usually takes.

Porty · Post by **Porty** » 14 Mar 2007, 23:07

Catz what is the standard EA fee in Canada?

In Edinburgh the ESPC standard is 1.5% but as the solicitor is also charging legal fees this is most commonly reduced to 1%. A few firms hold out for the 1.5% if they can get away with it.

A stand alone EA cannot offer the ESPC yet they often try to charge more. Don't know what Remax charge? They will doubtless negotiate the percentage to get the business. The average house price in Edinburgh is now £194,000.

Dadaist wrote:
1. how much goes to door-knocker

The door knocker is the Estate Agent. It is common in commission only sales jobs for the sales person to be responsible for generating their own leads. The cost of a lead to the individual self-employed agent will ultimately determine their success or failure. The cost can often be best measured in time rather than money.

If a novice agent onlly recruits 6 properties in 6 months and only 2 of them sell, chances are they can't afford to eat. As I said Remax only have 130 properties for sale in the whole of Edinburgh at the mo. I'm guessing they have more than 12 "active" agents. Very few of those properties carry the "New to the Market" badge.

Agents attend all the viewings of the properties they sell and will actively try and recruit prospective purchasers; trying to persuade them to sell their properties through Remax. This can lead to acting for both purchaser and seller.

Dadaist wrote: 2. how much goes to Remax office person

I don't know but I guess 20% of the fee for admin, call answering, office support and interview space. You will notice the Remax Agents always give mobile not office numbers. They want to keep control of their own leads, prospective purchasers and any referrals they get.

Dadaist wrote:3. how much is spirited away to whoever 1. or 2. bought the franchise off

Probably 8 to 12% of the fee and there may well be a national advertising contribution too.

I'm surmising that a Remax agent gives away 35% of his/her fees to the umbrella organisation in one way or another. Therefore to walk away with £20k income they will have to generate £31k in sales revenue. They get £20k Remax get 11k and they got an £8K fee too, although that is a one off.

The Franchise Owner (Here in Scotland it is a Canadian called Reg Macdonald I think) does the same job as his self-employed estate agents. Except he recruits agents not houses. And he doesn't door knock, he advertises.

The process is great for the Franchise owner, he gets fees upfront from EVERYONE. Think about it; your sales force pays you to join and then they do all their own marketing!! The Franchise owner and can truthfully say that an individual is responsible for their own success. If people do suceed then he wins big time. All his leads are created for him and he gets a cut of everything. If they fail? No big deal, he got a cut of the few houses they do sell and the upfront fees. There may even be a condition of contract that he gets to keep any fees should the Agent decide to pack it in whilst the properties he recruited are still selling.

I would be really interested to learn if how the average lifespan of a Remax Agent compared to a Punch Tavern licensee. There may even be people around who have experienced both lives.

I may be cynical but being able to make the claim that " We sell more houses than anyone Worldwide" is off questionable benefit, as most property markets are localised.

I have never used Remax has anyone here?

Dadaist · Post by **Dadaist** » 15 Mar 2007, 07:34

Well written, very informative, thanks.

I don't think I'm going to quit my day jobs for this one just yet.

Dadaist · Post by **Dadaist** » 15 Mar 2007, 10:30

They are heavy hitters indeed :

http://en.wikipedia.org/wiki/Re/max

David Mamet's classic about real estate salesmen :

http://en.wikipedia.org/wiki/Glengarry_Glen_Ross

Epykat · Post by **Epykat** » 15 Mar 2007, 21:14

I got talking to a guy not that long ago who bought a franchise and what he does is advertises to attract either elderly people, or people who are in a lot of debt etc and he buys their house at a reduced rate, then rents the property back to them, so they don't have to move out and their neighbours know nothing. Not sure if I find this very ethical or not. Is he doing them a favour? Not sure. Have you heard of this Porty?

Porty · Post by **Porty** » 18 Mar 2007, 20:23

Epykat wrote:I got talking to a guy not that long ago who bought a franchise and what he does is advertises to attract either elderly people, or people who are in a lot of debt etc and he buys their house at a reduced rate, then rents the property back to them, so they don't have to move out and their neighbours know nothing. Not sure if I find this very ethical or not. Is he doing them a favour? Not sure. Have you heard of this Porty?

I have seen adverts from a few companies who offer to buy your property quickly and for cash. The adverts usually say something like "you can expect to achieve 20% less than the market value". I assume that this is designed to sift out people who will be disappointed with the lower price. I am unaware if these cmpanies are franchisers but it would make sense.

Is it unethical? I wouldn't say so. If the company are upfront in terms of how they do business the sellers can have no complaint. They have a need to sell and the buyers meet that need. The sellers have to live somewhere so it may be ideal to stay put. However, it could be argued that the buyers are preying on the vulnerable.

If people have huge debts and can't make their mortgage payments or other secured loans then they run the risk of being repossesed (23,000 properties were repoed in 2006). Selling the house or mortgaging it to the hilt is one way of protecting the asset. A fully mortgaged property is of no interest to unsecured creditors who are owed money. If the property is sold then it is no longer owned but at least the sellers can stay there if they make such an arrangement.

I would say that selling a property below market value is an unintelligent solution to a financial problem. However, there are lots of people who are not financially aware and who panic.

An elderly person should have no trouble raising a mortgage where no payments are made but the debt accumulates over time. There are several reputable lenders who provide "lifetime mortgages" This is perhaps one area where it could get unethical. Mortgage brokers are regulated by the FSA. If one were invited to give financial advice and offered the service to buy the property rather than mortgage it then that could be construed as bad advice. It may be unethcal and could end up with a jail sentence.

The process you are describing is I called "buy to rent" and unless i'm mistaken Communities Scotland can provide this service to those in deep debt. I imagine they are a lot fairer to deal with.

bearcub · Post by **bearcub** » 18 Mar 2007, 22:08

Porty wrote:However, it could be argued that the buyers are preying on the vulnerable.

I would say so. If they had exhausted all other options and it was the only way, then so be it, but somehow I doubt that the majority of people utilising this practice are in it to help get the best deal for the homeowner.

Porty · Post by **Porty** » 18 Mar 2007, 22:12

Sadly I suspect that many of the participators are unaware of any other options or believe that they are beyond their reach. Which is almost never the case.

Porty · Post by **Porty** » 23 Mar 2007, 14:12

Back to Remax. I did a brief count of the names of the Agents who are selling properties in Edinburgh I count 25 different people. Which means they currently have less than 6 properties each for sale on average.

Maria · Post by **Maria** » 24 Mar 2007, 18:48

Just noticed thePlough Inn for Sale notice in the EN.

SoupDragon · Post by **SoupDragon** » 24 Mar 2007, 20:05

The notice has been up outside the pub for a wee while ( see the emrty shops thread)
The amusements opposite also have for sale with planning for flats ( as Sandra noticed) Wonder how far back that site goes. Was that where the geologist lived.?