Some people have it easy. When you’re in the excruciating midst of selling your home, you’d be forgiven for including estate agents in that number. They charge that much for a cursory sniff round and a flimsy for sale sign? Surely someone misplaced the decimal point, you think, before you eventually, inevitably accept the grim reality that if you want to move, you’ll have no choice but to pay.
Daniel Attia was thinking something similar when looking into selling his home in 2014. ‘I thought was there any way of selling this myself, customer to customer, but soon realised the process is pretty complicated. I’d need a little help, but still didn’t want to pay the fees. It was catch 22.’
So Attia and his co-founders David Jacobs and Andrew and Alistair Barclay got round the problem by doing what many an entrepreneurially minded young person would do, and setting up (yet another) online estate agents of their own, called YOPA. Things did not immediately go according to plan, however.
‘I’d never done this before, so there were a lot of mistakes, learning on the job,’ admits 27 year-old Attia, whose background is in commercial property. ‘Our business plan was about four lines on a piece of paper. It was kind of a common sense decision rather than a really analytically sound one.’
After three or four months, Attia and the others stopped trading, and decided to pivot to YOPA’s current hybrid model, which he describes as a ‘good shout’.
YOPA connects home sellers to estate agents operating exclusively on the platform as license holders. They then come to the property and meet you like any other estate agent would. They even list it for you on the big portals like Rightmove and Zoopla.
‘People still don’t want to trust the sale of their biggest asset to a faceless entity,’ Attia says. ‘And how can you possibly value a house from a call centre?’
YOPA tries to offer the best of both worlds, the human interaction but also the lower fees (in the high hundreds, compared to the low thousands for traditional estate agents outside of London, and often over £10,000 for those in the capital) that come from smaller overheads – and margins.
The business is not yet profitable but is growing rapidly. Attia hopes it will turn over £4-8m this year. ‘At the moment, online is about 5-6% of the market. We want to see that grow to at least 25-30% over the next three to four years. We’re investing in growth.’
Getting the estate agents themselves to abandon the traditional bricks and mortar workplaces for a virtual platform is apparently not a difficult component of that, despite the obvious comparison with Uber and the taxi industry.
‘The earning potential of our agents is actually higher than on the high street,’ Attia says. ‘Recruitment isn’t that difficult if I’m being honest. A lot of agents are reaching out to us. They see this as the future of estate agency.’
Though Attia is disparaging about the discrepancy between what you get from many traditional estate agents and the ‘astronomical’ fees they charge, he is keen not to tar all of them with the same brush – not least because one big beast, Savills, is an investor.
They’ve learned a lot about the industry from Savills, he says, and have also learned to have a more open mind about the competition.
‘People will adamantly defend their business model, and not look at competitors’ business models with an open mind – it’s this whole thing of hate your competitors. That’s the culture we started with, and we changed that. We’re really impressed and can learn a lot from people in our space doing good things. It’s very toxic for a company to be insular.’