What can independent agents learn from Foxtons?
Iain McKenzie, CEO of The Guild of Property Professionals, sat down on the virtual sofa with industry legend, Peter Rollings and currently Interim CEO of Foxtons, to discuss his journey in estate agency and the ethos behind Foxtons.
Providing a brief history of his career, Rollings says that he cut his teeth in estate agency at business called Lane Fox & Partners, a London based estate agent that sold country properties. From there he joined Foxtons Fulham as a negotiator in 1985 when they had just launched zero percent. The campaign led to them gaining 370 instructions in just three months. Rollings rose within the business as it grew, being appointed as the Managing Director in 1997.
“During that time, we grew the business and focused on doing things our own way, very differently to most other estate agents. While we loosened our opening hours a bit from the previous 9am to 9pm, seven days a week schedule, we were still open longer than most and worked extremely hard, which meant we were able to keep our fees high, something we still do. Our average fee is 2.38% across our 61 London offices,” adds Rollings.
In 2005, Rollings left Foxtons and together with a partner bought Marsh & Parsons. The business was sold in 2011, with Rollings exiting the business in 2016. “After a stint investing in and working with a few smaller businesses and a couple of non-executive directorships, last December I was asked to sit on the Foxtons board as an NED. I believe that every estate agency board should have a practitioner on it, someone who has sold or let properties and understands the business from the ground up. I was excited by the prospect because I felt that the brand had lost its identity and being on the board would give me an opportunity to help turn it around. In my view it had become a big flabby corporate that had lost its sense of why it is in business, which is to provide a great service and, bluntly, to get more money than anybody else could for our clients – that is our job and that is why we charge a premium fee. Whether we are able to do that or not is totally reliant on the business strategy, the people we employ, remuneration, training, marketing and an unshakeable belief that we’re better than the competition,” he comments.
While Rollings is currently the interim CEO of Foxtons, part of his role was to find the person who would take over the role. “We hunted for a new CEO, and over my tenure with Foxtons I have probably employed most estate agents in London at various times in their lives! We identified Guy Gittins as the perfect choice. He has previously worked at Foxtons for a number of years and understands us and our culture, furthermore, he has been hugely successful at Chestertons, so he has a fabulous all-round view of not only Foxtons, but other businesses as well. He can bring all this experience together to rebuild the modern-day Foxtons,” he adds.
McKenzie says he has always been a huge believer that the wider industry needs a strong corporate. “When I was the MD of Countrywide, it was Countrywide that across the masses throughout the UK would lead fee. Independent agents would benefit from a strong corporate that put up a good performance in the living room about being able to articulate the value that they add to the process. I believe that cost is an issue in the absence of value. Clearly at 2.38% Foxtons articulates a lot of value. What is the ethos and delivery behind that,” he asks?
“It is hard to do,” says Rollings. “We turn down quite a lot of stock. In a good market, it is difficult. It is in a tougher market that we really earn our stripes and grow. So, as we head into what we expect will be a somewhat tougher market for the next few months or year, I fully expect that we will grow market share. In terms of stock, we are the biggest agent in London, but whilst we have a lot of high-end stock (over 200 in excess of £2m) our ‘sweet spot’ is the mid-market in most areas we cover. We do ‘fee match’ at those higher levels, but our average sale price across London is £580,000, which in London is comparatively low. However, £580,000 at 2.5% to 3% is like most other agents selling £1.5 million houses at 1% - that is the key. If you reduce your fee from, say, 2% to 1.5%, you have to sell 33% more properties just to stand still in a market that doesn’t hold more stock, so why bother. It is about sticking to your guns, fighting for the fee, and showing why you deserve it.”
To help ensure that standards are maintained throughout the business, Rollings says that Foxtons has area directors covering eight to ten offices, both in lettings and sales. “Lettings is a magnificent business and in fact, we have just had three consecutive record lettings weeks, which is significant considering we have been in lettings for 30 years. While lettings and sales are equally important to us, we have been more focused on lettings more recently and it has produced some incredible results for the business,” he adds.
McKenzie asks, as someone who is running a highly successful multi-chain business, what advice would you give to an independent estate agent looking to maximise their profits and grow their business?
Rollings says that potentially it might be an idea to join a mentorship group, where agents can share ideas and learn from each. “I would also say, do not over complicate your business, which is what was happening at Foxtons. Essentially, estate agency is a simple business and is about doing the right things brilliantly. Call people back, charge a proper fee, show your worth, send the best people out to valuations, ensure your marketing is smart and stands out from the crowd, and try to do things differently from competitor agents. The key when doing the tasks, is a relentless attention to detail,” he concludes.
