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  • Mal McCallion

Rightmove's Profit Pyre

Updated: Apr 26



It’s tough to sell a property.

 

Building an estate agency business up from scratch. Keeping its values strong whilst growing a team. Paying for branding, for online presence, for an office, for electricity, water, internet, petrol to keep it all going. Becoming recognised enough to be a consideration for those that are thinking of selling in the area. Securing a place in the panel, usually of three, that might – just – be chosen to list the property.

 

Then you’ve got to be the best on the day to win the instruction from the vendor. Pricing it right, getting great images, quality descriptions, floorplans, perhaps a video; making sure all of the legals are taken care of, working through board organisation and data entry. Then, once it’s finally together, paying to promote it as far and wide as possible.

 

Then fielding calls and emails, understanding who’s serious, fobbing-off timewasters, doing viewings, managing vendor expectations, recording feedback, getting into negotiations, toing and froing between various parties, bringing people to the boil and securing an agreement. And, even after all this work, up to a third or more of listings get withdrawn, mostly unpaid.

 

Then, for those that do struggle through to this point, you have all of the sales progression to work through; fielding calls from buyers, sellers, solicitors, brokers, the same parties further up or down the chain, surprise results from searches, mortgage offers being withdrawn, squabbling spouses and freak floods.

 

Finally, the deal is complete. The average fee of around £2,800 is yours.

 

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Rightmove bought 26,000,000 of its own shares in the last twelve months, for around £138,000,000. This is essentially £138m they received from agents because they could, not because they needed to. They’re not investing it in anything constructive. They’re sinking it into the buy-back because their Directors don’t know what else to do with all of the piles of money they've got lying around – and it makes their equity worth more because there are fewer shares around, boosting their own share-based bonuses.

 

The money they spent comes from agent revenues, from sales of properties. These 26m shares essentially saw Rightmove set fire to agents' commissions from nearly 50,000 completed property sales. No return from this in terms of increased service levels, in technological investment, in site tools, nothing.

 

50,000 multiples of all that human effort, stress and ultimately joy … just sent up in smoke.



 

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