The rise of self-employed estate agents since Covid-19
Post-Covid, many buyers have got used to viewing properties virtually. At the same time, thousands of agents are now more open to remote working as self-employed estate agents, supported by out-of-the-box estate agents software like Alto.
Things to think about if you want to be a self-employed estate agent
But if you decide to go it alone, there’s plenty to consider. Agents need to:
- Register as a limited company
- Get an accountant (and pay corporation tax)
- Register for redress and with the Information Commissioner’s Office (ICO)
- Ensure they’re up to date with issues such as compliance, money laundering and property legislation
- The tech you’ll need, including your estate agents software
Purplebricks, which uses self-employed agents via a network of ‘territory owners’ or franchisees, first disrupted the established agency model when it launched back in 2014.
The benefits of being a self-employed estate agent
For those agents ready to take the plunge, the upsides include more flexible working and scope for greater commission.
eXp agents for example, earn a minimum of 70% of the commission they generate. And, up to 99% when they achieve high volumes of sales.
One agent near Newcastle has a minimum fee of £2,000 compared to the market average commission of £800. But, she’s the second largest in her area due to her high profile and personal service, according to eXp’s CEO Adam Day.
He admits Purplebricks had a massive part to play in raising awareness.
“Ten years ago, the concept of self-employment was too big a leap for many agents,” says Day. “This helped give us and others the traction we needed.”
Launched in the UK in 2019, it now has 180 agents. While the pandemic affected eXp’s growth, he believes the time is now ripe for the model to flourish.
“Agents have been conditioned to earning £40-50,000 but we’re now showing them that it’s possible to have projected earnings of at least double that,” says Day.
The Keller Williams model
Keller Williams has quadrupled its workforce in the last 14 months and now has 400 agents.
Russell Quirk, who owns the franchise for Essex, knows plenty of agents earning six figures. He reckons the earning potential is huge.
“I choose to look after the expensive properties and have earned £25,000 this year from five transactions, working about four to five hours a week – often from referrals,” says Quirk.
eXp’s Day acknowledges that the lucky ones end up working fewer hours for much more money, usually by capitalising on existing networks to win business.
For some agents beavering away in a high street office pocketing £150 a sale, that must be tempting.
The pitfalls of being a self-employed estate agent
But, while self-employment is great for those working in the prime market, agents in less lucrative areas can put in long hours to earn a decent living.
Self-employment might work for someone in a small village where you’ve been an agent for a while then you’ve got your clients when you set up on your own, according to property industry expert Andrew Stanton.
But, he has a warning for most new starters: “You won’t get any money for at least six months and probably won’t have broken even until year two,” he warns.
So how many self-employed estate agents are currently out there? Estimates range from about 600 to 2,000 in the UK. That’s a far cry from the US where self-employment is the norm and it’s all about the person rather than a brand.
To put it into perspective, in the US, many realtors sell houses as a hobby or side-line, perhaps closing a couple of deals a month.
Could the whole market eventually go down this route?
Keller Williams’s Quirk doesn’t think so.
“It’s not for everyone, like those who are used to a corporate existence. Of the 50,000 estate agents in the UK, maybe only 20% would be suited to it.”
Whether self-employed is for you or not, estate agents software solutions like Alto unlock efficiencies.
Backed by Zoopla, Alto is your agency in a box, with sales, lettings, client accounting and marketing all handled in one platform. Book a chat to find out more.