Town & Country, which launched in February this year, has launched an online estate agency franchise called zebrahomes.co.uk, designed to appeal specifically to intermediaries looking to diversify their product base.
By buying an area franchise for a one off cost of £2,495, brokers become an estate agent for T&C owned property portal zebrahomes.co.uk.
The site allows anyone selling their home to advertise on the site for free or for a small fee, which Bob Scott says generates “significant opportunities for cross selling”.
Franchisees are given full estate agency training at a three day residential course when they sign up, and T&C provides a marketing package including photography and measurement tools and training.
Day to day support is on offer from T&C centrally, and franchisees are automatically registered on a range of portals including Rightmove, Zoopla and Primelocation.
Scott said: “Zebrahomes.co.uk generates leads for the franchise owner, who can use the client contact to cross sell a range of fee generating products, including conveyancing, building and contents insurance, life cover, not to mention the mortgage.
“So far, we haven’t sold a single property in the past two years where we haven’t managed to cross sell at least two other products.”
Zebrahomes.co.uk is already in operation in Yorkshire and the north east, where eight franchisees have joined the company to date.
The business is modelled on US owned estate agencies Century 21 and Re-max, and takes advantage of consumers’ need to reduce the cost of moving house and Scott says this model is the future of estate agency as, “the high street is dying”.
Zebrahomes.co.uk offers vendors three packages. They can choose to pay nothing up front to advertise, and a 1% fee upon sale, capped at £5,000. The second option is to pay £195 up front and a 0.75% fee on sale, capped at £2,500. The third, and cheapest option for the client, is to pay £495 up front with no further fees. T&C takes 50%% of any earned income.
“The beauty of this pricing structure,” says Scott, “is that nine times out of 10, the vendor opts to pay the £495 up front – it’s fairest for them. It also generates income immediately for franchise owners – in this case, brokers.”
Town & Country sold 1,400 properties online and through three high street branches last year. The branches have all been closed, and the business is now entirely online.
Franchise areas are defined geographically and demographically to avoid franchisees operating in sparsely populated areas finding volumes challenging.
Scott says he hopes to have built the business to 100 franchisees by the end of the year, not including London.
He says: “London is a different market altogether, but we’re talking to people already about these franchises. We hope to have around five in the capital, tops.”
The business currently has 8 consultants based in the north east.
Tesco has recently moved into the online estate agency market with a trial run in Bristol this April of iSold.com, the trading name of its joint venture with estate agent Spicerhaart.
Another site, housenetwork.co.uk also offers a similar service to zebrahomes.co.uk though the model is not a franchise, limiting opportunities for brokers to benefit. The maximum up front fee to sell a property is £395 at housenetwork.co.uk and the site arranges all photography and property details on the vendor’s behalf.
But Colin Jackson, director of Essex based IFA Baronworth warns brokers to be wary of getting into estate agency.
He told Mortgage Introducer: “There has been a lot of talk of estate agents maybe having to be regulated and I would be surprised if that doesn’t become an issue for brokers and IFAs wanting to branch out into this.
“That said, Town & Country’s franchise fee does seem exceptionally low.”
He suggests that many IFAs also already have tie-ups with estate agencies and benefit from cross selling opportunities that way, without having to take on a franchise.
“Personally, I wouldn’t do this, though if you’re wanting to get more into this type of market, I do think more property is beginning to move,” he added.
