Estate agency “is not broken but it smells like yesterday”, says Daniel McPeake, Managing Director of American “rock star real estate brokerage” Nest Seekers International in Europe – which embarked on an expansion drive in the UK last year.
You’ve been with Nest Seekers for seven years; talk us through how the business has established itself and expanded in the UK.
Nest Seekers International was started in the shadow of 9-11 by Eddie Shapiro in NYC and rapidly grew creating the “Rock Star Real Estate Brokerage”, always forward looking and with a deep understanding of the mechanics behind brand awareness. The firm now represents properties in the most luxurious markets in the world. Expansion into the UK and Europe was aided by fate and a personal desire to push the Real Estate industry forward in the UK.
UK agents had got into the habit of pitching a fee, not a service
I have been operating in real estate with my business partner Solly Strickland (between us we have over 50 years’ experience) running a successful boutique agency in London but we were a little miffed by the public’s view towards ‘Agency!’. I started traveling around the globe seeing how ‘Agency’ was treated in other countries – (tiring times). I would regularly fly out on a Friday and be back Monday morning (not great when the destination is Singapore or Hong Kong). We found out the problem was that the fees in the UK are too low. UK agents had got into the habit of pitching a fee, not a service, and the ‘gods‘ of service are the Americans so we reached out to a few companies in NYC and Eddie Shapiro responded. He had plans to expand into the UK but we all agreed you can’t “Copy and Paste” an American model, a lot gets lost in translation over the Atlantic, so we slowly planned out how we would enter the UK market, quietly.
Nest Seekers gained a lot of profile from appearing in Netflix’s “Selling Sunset” and Bravo’s “Million Dollar Listing” TV series; is all the publicity good for the brand?
It’s great for the brand and the clients. Last year ‘Million Dollar Beach House’ was the world’s most watched unscripted Netflix show and that’s what Nest Seekers International does – we create evergreen moments and drive thousands of buyers and sellers to our website allowing them to see the multiple markets we operate in and the connectivity of the firm across the globe. It also massively helps with expansion as when we came to the UK we were not a foreign firm with no story. Clients felt like they knew us as they had seen the shows.
The American-style “broker” business model, which eschews salaries for higher commission rate, is gaining traction with UK estate agencies. How does the Nest Seekers structure work, and why do you think it’s becoming more popular over here?
Estate agency is not broken but it smells like yesterday
Accountability! When you’re putting skin into the game and your own name to the deal, the industry moves forward. Clients are now starting to understand this and are attracted to it. Agency is not broken but it smells like yesterday. There is a revolution happening with experienced agents and young professionals who have transferable skills. They want to hold the rains and be properly rewarded for doing so. E.g. Pretend you have two agents in front of you who both want to list your house. One will make 10% of the fee when completed the other 70% of the fee when completed – who is more motivated? This model of high commission works because the agent is free to expand their own business while benefiting from years of brand awareness offered by Nest Seekers International and pulling on the power of ‘WE”, our global broker network.
How does the UK approach to property marketing differ from the US?
It’s literally ‘tomatoes / tomatoes’. The main differences are that the fee (usually 6%) which allows the selling agent to spend their own money on staging and targeted marketing as the fee is big enough to recover the cost and a profit. Also, importantly this fee allows the selling agent to co-broke which means there is enough fee to encourage buying agents to work with the selling agents. This is where the UK falls down. Agents have such low fees they are not willing to split with other agents, the reward is not there. Change this – teach agents to pitch a service not a fee. Bring in the dawn of the buying agents and turn the industry from B to C to B to B this will make the experience better for all by allowing personal involvement by the buyer and seller to be reduced, thus allowing the professionals to navigate a way to a deal.
You’ve secured some sensational listings recently, including a £65m block in Mayfair, a 9,000 sq. ft mansion in Knightsbridge, and a super-prime penthouse in St Pancras Chambers. What have been your stand-out deals of the last few years?
For Nest Seekers International, it was the fact we came to the UK and London and were the first “American brand” to crack into the super prime market, which I can tell you is very hard to do. Perhaps our most satisfying deal was not our most expensive, when we sold what The Telegraph deemed to be London’s “most unsaleable property” in South Kensington – one of the world’s biggest agencies had tried and failed but we repositioned the client into a selling position.
Prime property markets in the UK and around the world have been remarkably busy despite the pandemic and the absence of international travel – so much so that Bloomberg has warned that the risk of a bubble is at its highest since 2008. Are you bullish or bearish about the London market in the coming years?
We have one fact to cling to which is that property prices go up
Bubble and cycle! These phrases are a way to describe and understand the market! While we can watch and try to predict the way the global housing market is heading we are taught, as with the pandemic, predictions can go wrong. We have one fact to cling to which is that property prices go up. We have seen a rush to the property market, and seen an usable safe haven for investment and personal security in massively uncertain times. As long as the uncertainty remains, the demand for property will continue. Once the dust starts to settle we will see a slight cooling off of the asking prices as the world gets used to the new normal. But don’t bet against bricks!
Which property and business trends from the last year do you expect to endure after the pandemic has passed?
Working from home will be the dominating factor moving into the new normal
Work from home definitely. Before the pandemic we started to see the high street listing. Now mostly all of us have had a trial run of working from home. It feels like this will be the dominating factor moving into the new normal. Perhaps not all week but it is now a “Thing” and it won’t go anywhere. Zoom humanised and turbo charged video calling which expanded the market place for many companies. For example: we were able to set up and open Nest Seekers in Portugal (which lists some of the most luxurious properties) during lockdown and from my part this would not have been possible without video calling.
A 2% Stamp Duty surcharge for non-resident property buyers came into play in April. How big a factor is Stamp Duty for super-prime buyers, and what effect is the 2% surcharge likely to have?
With Tax there is a person willing to pay it or a person able to offset it. It’s all about desire. If you want a property you will have it and some overseas buyers expect charges to be applied.
What’s next for Nest Seekers in the UK?
We continue to listen to the market adapting new concepts that we feel will be part of the buying/selling process. Block chain, crypto all have a possible part to play so we take notice, globally. We are growing and even though we didn’t go down the route of pyramid selling to get numbers, we are now over 50 agents in London and expanding to Manchester and Cornwall with definite early success.
We have also launched the Nest Seekers Academy, which teaches the personality and psychology of sales. This has been a great success. The plan is simply to push the firm forward, make a difference by allowing free flowing agency to exist by increasing fees and in turn delivering better service and high achieved asking prices. It’s not just about Nest Seekers International, if all the UK agencies embraced the changes that we are all making, if we all took a step forward, then the industry takes a step forward and that’s better for agents the clients and the industry we love.
What’s the best piece of advice you’ve ever been given?
Eat that frog! I.e. if you have a horrible call to make – do it early.