19th January 2017
How much are you missing out on when it comes to PX?
We had an insightful conversation with an agent last week.
We were running through his plans to be his market’s land and new homes agent of choice in the eyes of house builders and developers and we were discussing just how membership of the Land & New Homes Network would help him achieve this.
He also shared a major gripe about something we’ve heard from many other agents on our travels, and experienced ourselves, over the years.
Now every agent knows that getting part exchange (PX) business from builders is beneficial as they are properties that, without doubt, have to be sold
Let’s qualify that last statement. It’s beneficial IF a fair commission is being paid to the agent.
This particular agent we were talking with went on to tell us that he was being offered only 0.7 per cent for the part exchanges that were offered to him from a PX Management company.
He then went on to explain that based on that level of commission it’s tremendously difficult to be able to deliver the level of service his agency takes pride in let alone get his teams motivated by such a low fee on a multi agency basis.
We’ve also spoken with agents that were offered a very small, barely workable commission and told by the PX company to basically ‘like it or lump it’ – so where does the need for a quality agent come in – as a house builder choosing an agent to sell their properties, certainly isn’t selecting the cheapest, worst performing agent in a town.
In our experience many house builders and developers are not even aware of the low commissions offered to agents via PX companies, let alone in some instances that some of these businesses charge an annual fee of between £1,500 and £2,000 for the privilege of even getting the chance to have the instructions per branch.
One house builder we work closely with said agents selling their part exchange homes were paid between 1.5 – 2% commission. He was in the practice of using PX managing companies because, in his words, they had more centralised reporting.
When told of the size of the cut often taken by the middle men he was shocked. Just like all house builders, the outcome they want to achieve is for their part exchange properties to sell quickly for a good price so that it comes away from their balance sheets as quickly as possible so they can facilitate more part exchanges to sell more plots. Remember these are houses that they haven’t built themselves so don’t have the luxury like they would if it was their own product.
We believe that well incentivised agents are their best chance of making this happen.
Now some of you may be thinking ‘the only way I can get part exchange instructions is from PX management companies’ but there are other ways.
This is something we’ve been working on with our members as part of our Insight and Onboarding days.
We work with house builders and developers all across the UK and know how to interact, build trust and rapport in order to deliver exactly what they require. No surprises our members are now receiving PX instructions directly from a range of housebuilders at sensible fees and with clear reporting mechanisms in place.
To find out more get in touch and we’d be delighted to talk to you.
Thanks for reading
Overwhelmed! Seriously, such a lot of valuable and well presented material
It is a great vehicle for learning new ways how to expand our land and new homes division.
Land & New Homes Network have helped me and my business take it to another level over the last year. The support from the whole team has been greatly appreciated with Kevin & Ian always on hand. I would recommend other forward-thinking agents to consider the network as a large part of their business. It’s not gift-wrapped for you, but the support, collateral, and connections give you an opportunity to make it a real success.
The Land and New Homes Network team are exceptionally supportive!
A very friendly bunch… full of enthusiasm and energy, giving great advice whenever you need it, allowing you to grow and develop your network.
A fantastic business that delivers everything it promises a no brainier for good independent Estate Agents
An excellent workshop. Top tip to be implemented straight away – identify developments to promote our rentals team.
I have been working with Kevin as a member of The Land and New Network since October 2017. I have found his advice and guidance to be second to none. Through Kevin’s insight and advice Orchid have started to build a strong land and new homes division. Kevin is a true professional in his field.
Always provides key improvements to our business. Thanks as always.
What’s best about the Land & New Homes Network? The firepower it brings, and the confidence it gives you. I really can’t praise it enough.
Thanks for your email outlining the next content for the iQ folder. I’ve received the hard copies in today’s post and have to say I am very impressed with all the new material you guys are producing for us members.
Subscribe to our monthly newsletter
We produce a regular email that's packed full of incisive comment and industry news.