Property Tips

If you really want to know what goes on behind the scenes at estate agents, who better to interview than the person who trains many of them! In this frank and direct interview, Boyd Mayover discusses what he sees as the fall down of both high street agents, hybrid and online agents.

What are they good at and where do they need to improve? What is the difference between them all? Who would Boyd instruct? All these questions and more will be explored in this most insightful interview yet!

Eye-opening interview with a trainer of Estate Agents

Alex: Very excited indeed to be interviewing a chap called Boyd Mayover. Now, he has a company called Sales Doctor, and what’s so incredibly interesting is he actually teaches estate agents behind the scenes. Boyd, fantastic to have you on the phone this morning. Thank you very much indeed for spending the time with us.

Boyd Mayover: That’s great. Thanks for asking me.

Alex: Not at all. Now just sort of getting straight into it, just talk me through how from your perspective, from effectively the Sales teaching point of view, how you feel estate agency as a business sector has actually changed over, I suppose, the last 10 years or so?

Boyd Mayover: Well, I think there’s a few things that have changed. I think some of the estate agents have started to realize that they’ve got to be far more consultative. The hard sell’s gone, unfortunately. I’m sure there’s a few odd balls out there, but by large the hard sell’s gone. The estate agents are realizing they have to offer a world car service now, otherwise they’re not going to keep and retain business. And when I say that, I mean to everyone: to the tenant, to the landlord, to the vendor, and to the person buying. And that service has to be from the moment somebody calls them, to the moment and after they’ve moved in.

Alex: And you feel this is one of the key areas that estate agents really need to get better at, if not the only reason that they need to get better at, in terms of keeping their clients?

Boyd Mayover: Absolutely. I think they forget sometimes, and what happens is… You know, Alex, there’s times where estate agents are very busy and life for them is pretty easy, and what I find happens then, they get lazy. And if they have a lot of inquiries, they don’t treat each inquiry with the respect it deserves.

Alex: And why is that, Boyd? Why do you feel that the agents don’t sort of… I guess that’s partly why they get a bit of a bad reputation, is this of the handling of calls and returning the calls. Why do you feel that’s the case?

Boyd Mayover: Yeah, I think it’s because they carry big, and sometimes the culture within the agency… I’ve even heard agents say things like, ” Oh, they’re just tenants.” Now think about it, the person who’s renting today, might well be renting to scope the area and then have an absolutely enormous budget to buy. So it’s a very short, [inaudible 00:02:31], Alex. And they are changing and they are getting better, but there’re still too many of them don’t treat every customer. I call it the George Clooney effect. I say, if George Clooney walked into your estate agency office tomorrow, would you treat him any differently to your normal clients? And unfortunately, over 80% of agents say, “Yes, I would.”

Alex: Yeah, I probably agree with that, having been that side of the fence myself, as you know. I mean, guess a lot of what’s changed over the last 10 years or so is very much now with this targeted type culture and key performance indicators, and that sort of grindstone mentality. And I suppose from your perspective, which is almost very much the insider with estate agency, do you feel that that’s changed the business sector for better, for worse, or do you feel that it’s just had no effect whatsoever?

Boyd Mayover: I think it’s changed it for worse with the corporates. You know, there are many companies I know that built up very nice businesses, they might have had seven or eight branches or maybe more, got taken over by a corporate, and within a year their start turnover was almost 80%, because they changed from being what made that company special and why they bought them, to just a sales machine where the only thing that was important was a number of calls you made. And it just doesn’t work. And let me tell you, Alex. Unless estate agents are careful, the likes of Purplebricks and easy property are coming over the power pit with their bayonets fixed. Unless they’re careful, they’re gonna lose the war and it will be their own fault.

Alex: It’s a valid point. I mean, it’s very much sort of seen as the insurgency, so to speak, at the moment, the pure online agents like Purplebricks. You’ve got the hybrid agents such as you, me, for example. Why are they making such a hit within the estate agency sector? Why does their business sort of seem to be growing at the moment and they’re taking more of the properties on?

Boyd Mayover: Well, I think it’s simple. If the customer’s perception is that he’s not getting a good service and in fact sometimes he’s getting a bad service – no follow-ups, no calls, etc. – he might as well pay for the cheaper service. Now, my experience Purplebricks, some of these hybrids, their service is not good. You know, people forget that when you buy a property or you’re selling a property, you need the agent to have a great deal of expertise, because it’s not the fee you pay, it’s what you get and in what timeline, Alex. It’s not the fee that’s important to the customer. I urge vendors, “Don’t just look at the fee! Look at what you’re going to get,” because some of the hybrids, they have no sales progression whatsoever. So what I mean by that is, from the moment the customer makes the offer, they’re on their own.

Now, how could the customer know about surveys, about convincing, about the fact that his buyer, if he was able to get another 1% reduction on his mortgage, would easily be able to buy his house rather than struggle? This is what a good, a world-class estate agent knows and does, and that’s the value in estate.

Alex: So very, very valid point. And I mean, I suppose it’s also been in the news, and we’re not saying anything untoward, but as an example, Purplebricks… Just talk everyone through this, because they’ve had a bit of controversy recently, just in the way that they sort of get their fee.

Boyd Mayover: Yes, absolutely. They get their fee in advance! So you paid them your money, and therefore what incentive is there for Purplebricks to do a wonderful job selling the property at the right price for the vendor? Zero.

Alex: In detail, they’re not motivated. As soon as you instruct them, you pay your money, in effect, in advance, and that goes straight into the Purplebricks account, and then I suppose they just leave you out there to dry, and that’s one of the biggest issues out there. But I suppose if you are a homeowner of seller, you don’t find out about it until it’s too late.

Boyd Mayover: Well, that’s right. And as far as the seller… If I was selling my property, the agent I want to choose is an agent that can demonstrate to me they’ve sold properties like mine at the price I want, but most importantly, they will hold my hand from the moment the offer’s in. And I want the right offer. You know, there could be two people offering the same amount or similar amounts. One could be in a chain of 10 and one could be a crash buyer. Which one would you prefer to buy your house?

Alex: Exactly. It’s a cash buyer every time, and it’s having, as I always say Boyd and correct me if I’m wrong, it’s all about the the agent’s experience, not the number of years they’ve actually done in specifically in estate agency, and obviously the front-of-house team, because those are the guys and girls that tend to take incoming inquiries and walk-in inquires.

Boyd Mayover: Absolutely. It’s hard jobs they’ve done. You know, the truth is, anybody can go on and be Purplebricks tomorrow. They could be a franchisee of Purplebricks tomorrow and many of these hybrids. Now, what experience have you had in selling houses? What experience have you had? Zero, in most cases. They’re not schooled in what helps the customer.

Alex: I mean, we’ve talked about sort of agent experience. Where do you feel that agent experience comes into your own? Why is it not akin, whereby someone just, I suppose in insurance sales, for example, feels that they’re in a sales role and they feel estate agency is very sales-led, but they don’t have any property or estate agency experience. Where do you feel that they will be let down as individuals and agents?

Boyd Mayover: Well, I think what happens is there’s lots of chunks in the chain, and in the journey of selling your house or buying your house it takes up many different components. And someone who’s running a franchise, the master book of how to run the franchise will not tell them how to deal with a mortgage adviser, how to do with a conveyancing solicitor, how to understand what the survey means, how to make sure that he’s in control of the chain. These are things that only an experienced agent will understand and will have the experience…and more important, Alex, the history of success. You know, if you and I were looking for an agent tomorrow, we don’t necessarily want the most experienced or the least experienced, but we want the one with a history of success who sells properties at the right price, in the right time.

Alex: I was about to say, you mentioned the other week to me that you’re also going in behind the scenes to these companies that say, “Well, we will buy your house now for cash.” And just talk everyone on, I suppose, the inside track on those sorts of companies.

Boyd Mayover: Well, yeah. I was absolutely shocked. I worked with one of these companies, and my perception, before I got there, was that most of the people phoning them would be people who were saying, “I’m in a res. The [inaudible 00:10:05] are due. I’m behind with my mortgage. I’m desperate to sell. Please help me.” And you know, Alex, I was shocked, over 65% of their inquiries were from people that just got fed up to the back teeth with bad service from agents.

Alex: And that was their main job. It wasn’t the fact that they were being into a forced situation. It was primarily just down to customer service at the end of the day.

Boyd Mayover: Just down to customer service, “I want someone to sell my property for me.”

Alex: Well, that is an extremely strong figure. And as you said, it’s not what you first think from first impressions. I mean, how are you actually helping? What do you actually do behind the scenes with estate agents? And by the sounds of it, you help both the pure online agent, the hybrid, and indeed the high street agents in your line of work. But what is it that you’re actually teach them? What are you giving them insight on?

Boyd Mayover: I think what we’re saying to the high street eight is this, you have to be world class in everything you do. So when somebody phones in, what I don’t wanna hear an estate agent saying is the first question “What’s your budget and have you got anything to sell?” It’s selfish, it’s stupid, it doesn’t help the customer. And if I was a potential buyer, I’ve just found out your agency and virtually the first thing you’re asking me is, “Have I got anything to sell?” Too many agents have gone through that formula for too long. What we teach them is show an interest in your customer, find out what’s important to them, why are they looking to move to [inaudible 00:11:53], where do they live at the moment, what made them choose the house they lived at the moment, whereabouts do they live, what’s gonna be important to them.

You know, I always tell the story of a lady that was looking to move, and she lived in a four-bedroom house, and she approached five agents. And they all asked her how many bedrooms she wanted. She said four, and most of the agents said, “Would you accept three bedrooms?” She said, “Absolutely not.” The last agent, world-class, said to her, “Can I ask you why is a four-bedroom so important?” She said, “Because I believe the four-bedroom houses always have a bigger downstairs than a three-bedroom and the downstairs is the most important thing.” The agent said, “That’s fine. If I can show you a property with a downstairs in a three-bed is as big as a four-bed, would you look at it?” She said, “Of course I would,” and she ended off buying through them.

Alex: So it’s all about asking the right question, isn’t it?

Boyd Mayover: Absolutely, and do an under promise and over deliver. If you tell someone you’re gonna ring them back Tuesday, ring them back Tuesday. You know, for me, I always say to people, when someone walks into your office, depending on the area, they could have from, say, a quarter of a million to well in excess of a million in their pocket. That’s what they’ve got in their pocket to spend. Now, if you were selling diamonds, how well would you treat the customer that came in with a quarter of a million pounds? Very well. Why on earth aren’t they being treated exactly the same? And it has to be from the beginning to the end. You know, I hear agents say, “Oh, thank you for looking at the property. I’ll ring you next week.” And I say, “But hang on a minute. This is someone who has an enormous amount of money to spend. It’s very important to them. Why aren’t you making an appointment to speak to them next week?” Don’t get me wrong Alex, there’s some very good agents out there, but too many are still trying to take what I call the easy route.

Alex: Absolutely. I think it’s down to you and I, Boyd, to save the estate agency sector. And I’ve gotta say thank you very much indeed for coming on probably one of the most powerful interviews we’ve had on the show to date.

Boyd Mayover: You’re welcome.

Alex: Just remind everyone your contact details and the website, if they want to get in touch.

Boyd Mayover: Yeah, the website is www.salesdoctors.co.uk. Please have a look at the website. I think you’ll find it very interesting. You can always email me at boyd@salesdoctors.co.uk, and we’re very happy to take inquiries from anyone. And as I said, our business is all built around the world-class customer service should be the minimum your delivering.

Alex: Fantastic.

Boyd Mayover: Thank you for inviting me.

Alex: No, not at all, Boyd. It’s great to have you on. Thank you so much indeed for a fantastic sort of talk through the real insider tips and tricks, and I look forward to speaking to you soon.

When are open viewings best carried out and what should you expect? Are they really all they are cracked up to be? Property expert Alex Goldstein discusses these questions and more, as part of his radio show on StrayFM.

The Pros and Cons of Open Viewings

Full transcript below:

Sam: Yeah so, I hear a lot about viewing days and how they’re quite beneficial because obviously you just have to have your house clean for one day, and a lot of people come in at once. I just want to know what your take on it is really because I wanted to know what the best thing to do is with regards to making sure the house sells.

Alex: Sam, interesting question here. As I see it open viewing days can be very useful if you’ve got an unusual property in the market and one that’s likely to create a lot of instant interest in it. It’s a very fair way to get a large number of people through the door in the most time-efficient manner. This situation often applies to properties that need extensive refurbishment because they don’t often crop up in the market. Now, open viewing days are a useful option if your property falls into this category or as part of an overall marketing strategy. However, don’t think for a minute that you’re going to get a barrage of viewings with 30-odd people storming through your home in an afternoon. This really very rarely nowadays happens, more often than not you just get a small handful of people all coming to view. The key with open viewings is to keep the timeframe for people to view quite tight, such as a couple of hours and not a whole day or afternoon, as this will now focus their efforts. Ensure that the agent can ideally accompany the viewers around and that all viewers are signed into the property so they an be followed up down the line for feedback. Personally, it’s usually best to have viewers shown around individually as you often get more out of them in terms of what they like or dislike about the property. Always try this route first then revert to an open….

A fast paced, insightful interview of Alex Goldstein and how he started his professional career. What are his motivations and what are the issues with the current estate agency sector? Why did he leave the corporate world to set up on his own?

Hear how Alex rose through the ranks of some of the UK’s very best estate agents and now has his own business helping those looking to buy and sell property in Yorkshire and London.

An Interview with Alex Goldstein

Full transcript below:

Michael: This opportunity is for everyone to understand what Alex is all about and really how he got to do what he does so well, so first question for you Alex I suppose is, what’s your background? How did you get into this sector?

Alex: I suppose it was just by sheer chance many years ago when I was at university I got some great work experience and from there doors start to open, you get a insight into the estate agency world, got a great job with Cluttons who are a big name in the South East and London and sort of worked up the rankings and quite a lot of experience over 13/14 years.

Michael: A really big company, you must have gotten a huge amount of experience looking at it from both sides of the fence I suppose?

Alex: Yeah, very much, I mean you really have seen sort of all sorts of properties ranging up to stuff you see in the press on a national scale so some stuff that you’ll remember for the rest of your life dare I say on some of them.

Michael: So, what made you start up on your own then? I mean you’ve got a pretty good job, you’re working in some pretty big organisations, you’ve got some real kudos there. What’s the reason you decided to pack it all in and start your own business?

Alex: Yes, great question. I suppose I became disillusioned with the way that estate agency was being run, it was very different to when I first started. A lot of businesses nowadays and especially estate agents, it’s all run on targets, it’s key performance indicators, its daily targets and its all about how many calls you’re doing, how many deals you’ve got and its almost that you’ve got this big stick mentality from head office and I just felt that your almost incentivised I suppose not to look in client best interest at times and it didn’t quite fit true with who I am, and I suppose morally didn’t quite feel right.

Michael: Ok, I suppose, when you say from a moral perspective, what do you mean?

Alex: Well as an estate agent nowadays, and a lot of these guys it’s all about I suppose the short-term. It’s all about short-term targets, get it in and bill it. So, I remember very well that you went to see, say you’re selling your property, I’d go to see you and before I’d even stepped through the door in the back of my mind I’ve just got to think I’ve got to get Michael to sign that terms of business, I’ve got to get his instruction. It may be conversely that the best advice to you to maximise the value of a property could be, Michael you know what, let’s go and get outline planning permission for that big extension, let’s add value by doing that, then let’s put it on the market. You’ve got to look in client best interests and now I don’t have targets, or KPI’s or anything like that, its genuinely looking in your best interests as a homeowner to get the best buyer.

Michael: It’s almost like one of those programmes that you see on television isn’t it, where you have a expert, people often call you the Phil Spencer of Harrogate. It’s a bit like that sort of situation where you have somebody like Phil Spencer who’s an expert in property, comes in, looks at the property and gives them an objective perspective. From that objective perspective people then start to build trust and understand where you’re coming from. From your point of view, why do you think that’s going to be beneficial for the client?

Alex: A lot of it nowadays is the fact that you’ve got a expert like myself, who’s got a lot of years under his belt and experience I think is absolutely key, critical on dealing with let’s face it your most important asset on this planet.

Michael: People say that it’s also the most stressful thing to purchase as well, a house.

Alex: I think divorce is just behind it and I think death probably just behind that, it is still one of the most stressful things in your life and actually the biggest key to it is actually predicting problems before they’ve happened and to nip them in the bud so again you can keep the process very smooth.

Michael: Proactivity I suppose as opposed to reactivity.

Alex: It is that but also it comes down to experience and for me it’s one of the biggest frustrations out there at the end of the day. Estate agency isn’t licensed anyone can start up, you could start up tomorrow your own estate agency and just start going and as long as you tick the right boxes legally you’re absolutely fine. The biggest problem I have to say is a lot of these online guys that sort of buy franchise opportunities. Yes, they are amazing sales people, they’re from car sales or I used to be insurance sort of thing, dealing with property is something very specialist and shouldn’t just be sort of glibly sort of thrown away and very often they get caught out because they haven’t got that foresight and knowledge and experience to see through a problem and it’s very often where I have to get involved because a sales gone completely off kilter and it’s down to someone like me to come in objectively and just get it back on track.

Michael: And the other thing of course which must be a huge issue is that it affects the confidence in the individual and in the world of estate agents selling property that they think that everybody’s tarred with the same brush.

Alex: Unfortunately, yes, I mean it doesn’t matter whether you’re an estate agent, a politician or dare I say a traffic warden, I think every sort of sector in this world you’ve got a tarnishing of sorts. Estate agents used to be I think the most hated role out in the UK, I think that is topped by the bankers and the politicians at the moment, but it is a great pity because there really are some superb estate agents and negotiators and actual team setups and it’s just knowing what to look for, with experience behind the scenes to guide a client through those sort of fairly tough times.

Michael: Ok, so let’s look at it from a slightly different perspective now, lets look at it from the consumers perspective. What is the advantage and what do you do for me having decided that I want to sell my property, what exactly is the process that you follow and what would you do for me?

Alex: So, if you’re looking to sell your property and I go as you know I cover Yorkshire and London, as I’ve intimated already it’s about where you can maximise value. Now this could be going through planning, it’s sorting the cosmetics out, it could be the finer details but also as with a lot of these it’s planning behind the scenes and actually getting the agent out is one of the last things you actually do. So, it’s sort of making sure you’ve got the solicitors lined up, it may be that we call on a surveyor to check for the roof, so we’ve got that absolutely nailed down.

Michael: So how do you get paid from the selling perspective, how does that work?

Alex: Well once I’ve sort of bought in and advised on independently the most appropriate agent, I sort of, I link in with the agents on a weekly basis, I remain proactive. So, I would ring said agent once a week on behalf of Michael who’s selling the property, get the latest from them, it takes me sort of 30 seconds to a minute to understand where they’re going because I’ve been there and done it myself and then I can report back to Michael. Twenty minutes / half an hour, Michael this is what’s going on, this is what it all means, proactively with my experience we need to, I don’t know change the online advert, agreed, great, agent please can you get on with it. So, all of a sudden, you’re now speaking weekly with the estate agent, you’re being proactive because you’ve got me on board. The key to it is the appointed agent, who’s been instructed independently of me, charges you their standard commission rate in the market, the agent pays me a cut of their commission. So, if you are selling a property you have absolutely nothing to pay me at any point to have me on board, so I suppose it’s into a no-brainer type category.

Michael: So literally the agent will pay you so the house owner, the homeowner who’s selling has got no cost for all that objective perspective?

Alex: No, the cost remains exactly the same, it just means that you’ve got extra expertise and knowledge and guidance. The agents like it because in effect I have, forgive the analogy, packaged up you and the property. We’ve got the planning, we’ve got the solicitor, we’ve got the right marketing strategy lined up, you’re ready to go. It’s win-win situation, the agent still retains a good proportion of the fee, I get paid a percentage of that, it’s win-win, and that’s where I can link in with a lot of the solicitors, the private banks, I’ve done stuff with Google in London as well because again it’s a very unusual service.

Michael: Ok, fantastic. The other week I was out and about speaking to a solicitor and the solicitor was raving about you and saying how you actually helped one of their clients. How does that one work?

Alex: That’s very kind you know thanks for mentioning it and this was actually on the buying side of things and this was actually for a client of theirs who was getting very frustrated. They were in a good position to proceed but they weren’t getting any traction with the agent, they weren’t getting tipped off early and they were very fortunate, they were all cash, there was no mortgage, they were in rented but they just weren’t being taken seriously.

Michael: Ok, so just one thing I just want to make clear here, so this is the other side of the business, where you’re actually going into the market and purchasing properties for clients. So just rewind a tad and just explain how that part of the business works. So, you’ve got the selling side that you’ve just talked about and this is the other side of the business.

Alex: It is, and again very often people get frustrated or they don’t have the time or very often they don’t know what they’re doing. It’s all well and good you hear on the TV and in the media, this is how to buy a property, this is what you do but actually putting that through into real terms. If you’ve ever done it before it’s actually incredibly daunting. So again, adding value through there and I do a lot of relocations as I said I cover Yorkshire and London so people moving between the two, I can effectively hold their hand and guide it through. But, again it’s with experience I am an ex estate agent at the end of the day and you know how the system works, you know how to get your client to the very front of the queue and sometimes and again it’s a big trend at the moment, what’s called the off-market sector. And this isn’t necessarily with estate agents and if it is it’s not on the open market, it’s not online, very often you’re going direct to the developers that have just finished a new project or because I’ve been in the business a long time I know the homeowner so if you give me your criteria, we’ll go out and search for whatever specification you’re after, we negotiate and we secure on the right terms and see it all the way through and I act on behalf of you, the purchaser, in that instance and you just pay me a fee for that service.

Michael: So, this is a service where you’re paid a fee but again you give a completely objective perspective and from what you say to me then you actually have access to properties that are probably not on Rightmove or not on other websites that most people would look at when they’re trying to buy property.

Alex: Probably just over half the purchases I have done have been completely off markets, no one really knows about it, and you are just placing the buyer, my client with a specific type of property and it’s guiding them through that. It’s also then bolting on a lot of connections that I’ve got. Again, I don’t get anything for it and I always say to everyone up front, if someone moves into a property, they buy a property and I don’t know they want to do the extension, they need the roof sorting, or they want some really nice carpeting to go through, who do you know, who do you go to, who is trustworthy?

Michael: Well that’s a whole ballpark on its own, getting tradesmen in and knowing who you can trust and getting the best price and all that.

Alex: Absolutely and again just I’ve been round the block as they say, a lot of years, I know a lot of these guys, they are completely trustworthy, and I don’t charge for it, they don’t charge any more. Again, it’s looking at the bigger picture which I wasn’t always allowed to do in the corporate world is that if I can help you, as a buyer and indeed as a seller, if I help you and the general cause, again it helps you, it helps me, everyone wins as I see it. It’s not about getting a lot of businesses to do sort of backhanders in brown envelopes and all that, I’m not into that at all and keep it very simple.

Michael: So, it’s all about really adding value to the client in every respect whether it’s from a purchasing perspective or from the selling perspective, it’s all about adding value.

Alex: Yeah very much so that’s exactly what it’s about.

Michael: So, the other night reading through the Yorkshire Post and you’ve got a column.

Alex: Yeah, I do, Yorkshire Post Property Column, I think the next ones out in about two weeks’ time, and again that’s giving you an insight into my world. It’s not selling anything as you may sometimes feel, it’s just giving really good advice and expert opinion and experience that’s what it’s about.

Michael: Well fantastic. So, in summary you’re buying properties, you’re selling properties, you’ve got 14 years’ experience, you basically have the majority of your stuff is not the kind of stuff that you would see on Rightmove, it’s something that’s offline so if people are interested in properties that they probably don’t even know that are for sale, you’re the man to speak to.

Alex: Yeah, I very much put it like that.

Michael: Thanks very much for your time Alex.

Alex: My absolute pleasure, thanks very much Michael.

When it comes to selling your home, the television personalities get some very major areas wrong! What works on TV, does not always translate to the real world. Listen to property expert Alex Goldstein give his thoughts.

Where the TV personalities get it wrong

Full transcript below:

Alex: We are focussing on where the TV actually get it wrong. Now, for example they all say paint all your walls white, remove all your personal items, clear your rooms and give it a blank canvas look, however, this isn’t actually the right advice believe it or not. Firstly, most importantly it’s very difficult to photograph a blank room even dare I say with a professional photographer. Where are the features? There’s nothing to look at and if it’s all painted white it looks like a hospital. Now, ask yourself who likes going into hospitals? Of course, the answer is absolutely nobody so why would someone want to pay you to come and live in one, they don’t. Now, remember a house purchase is one of the very rare emotional purchases in life. People are buying into the lifestyle so in other words they have the photographs of the family out, the dog roaming around by the fire, and there’s the other extreme, do not have butter everywhere, it’s more a case of having clean, clear and smooth lines throughout the property. The golden rule is the more people feel at home the better your sale will go.

Join property expert Alex Goldstein with Chris Etherington from Price Waterhouse Cooper (PwC) of Leeds in this highly topical interview based around what PwC do, tax planning, structuring and understand their thinking behind the controversial accountancy practices in the news!

Interview with Chris Etherington from PwC

Alex: It’s great here to have Chris Etherington from Price Waterhouse Cooper in Leeds. And Chris, getting straight to the heart of it, I know everyone’s really heard of PwC and Price Waterhouse, and it’s one of those massive UK names, but what underneath it all do you actually do?

Chris Etherington: Thanks for inviting me on, Alex. So, yeah, PwC, it’s one of those words that you see bandied around in the press being…we’re just a large accountancy firm. We work with huge, global conglomerates and things like that. And it’s actually, like you say, it’s a bit impenetrable as to, what do we actually do. So in terms of getting down to the nuts and bolts of it, we are essentially problem solvers.

We do a whole variety of things. I can list a whole different load of different services that we do. I do tax advice, we do legal advice, we do investment advice, we do deals to help people buy and sell companies. We do the boring stuff like the accountancy. Now, my colleagues in accounting won’t thank me for saying it’s boring, but that is what we’re known for. But we do so much more. We help people get debt funding, a whole host.

Alex: So sort of numbers and a bit beyond?

Chris Etherington: Absolutely, yeah. Obviously, it’s numbers-based, but we’re not all just mathematicians.

Alex: Possible common misconception is the types of clients that you help. And I know you’ve mentioned that you do help some of the UK’s best names out there, but just give people a feel, because obviously you’ve got those people, but I picked up that there was actually a bit of a slant and a change.

Chris Etherington: Well, I…to tell you what I do, I just work with individuals, and most people would be surprised to hear that, probably. I’ve spent the past decade of my life sitting at the same desk, helping clients of all shapes and sizes, if you like. So I’ve got clients who are guys in their bedroom with an internet business to 98-year-old grannies. So there’s all, sorts and it’s not just your high-net-worth Russian oligarchs, or what you might think it might be.

Alex: Again, yeah, a common misconception, it’s great to clear that one up. And what about companies? On the company side, because, again, you’re often seen to be acting for some of the big guys out there, but I think it’s fair to be said, at the moment, you’re quite interested, as a company, in the SMEs of this.

Chris Etherington: Yeah. I mean, if you just took what we call it as private business, and what that basically means is working with individuals, typically owners of managed businesses and privately owned businesses. And if you took that out of PwC in itself, that would probably be the fifth-largest accountancy firm in the country, just that bit of PwC. We do a lot. If you look at how many FTSE 100 companies are there in Yorkshire, there’s some, but there’s not a huge amount. So over two-thirds of what we do is working with entrepreneurs and their businesses. And that’s not just huge ones. It’s tech startups, to very large, privately-owned businesses. So it’s everything in between.

Alex: If you are a small or medium-sized businesses, why would you look to the PwCs rather than, say, accountancy firm down the street, so to speak? What is the difference? What are you actually getting?

Chris Etherington: At the end of the day, you’ve got the benefit of having somebody that is focused on the SME market but has the benefit of having a global firm behind them. So we can help you from day one as you grow and invest our time, we’re quite happy to invest time to start with certain businesses. So I’ve got a lot of guys who are tech startups, and there’s not a huge amount I’m going to be doing for them, but I just spend time with them on a day-to-day basis to help them grow with them, and in the future there might be an opportunity for me to help them with something.

Alex: And I suppose, from what you previously said, it’s the fact that you’ve got all these different departments and sub-divisions and all different types.

Chris Etherington: Yeah, say somebody’s trying to export to a European country, for example, never done it before. Well, we’ve got offices all over the world. I can pick up the phone to somebody and find someone over there that can help move…

Alex: Yeah, so you’re getting the PwC network, which you can’t obviously get from your high street guy, and you are the one stop sort of financial [crosstalk 00:03:59].

Chris Etherington: That’s why I said basically we’re problem-solvers. So if you have a problem with your business, generally I can find an expert, because it’s such a big firm. There’s usually somebody who does an everything, a little niche expert. I mean, I’ve been in the firm over a decade, I still don’t know what we do. It’s so much there, but usually if you pick up the phone, there’s somebody I can turn to or something.

Alex: And just talk us through, because it’s very much a hot topic at the moment, this whole sort of tax avoidance. You’ve obviously got all the Panama papers. You’ve got David Cameron supposedly being caught out, according to some of the papers. Emma Watson, the actress, she again bought it through the Panama company. What’s the viewpoint on this? Because, again, I think it’s very much a misconception when people sort of talk about taxation and the different structures. Talk us through. What is legal, what’s illegal, what’s the grey area?

Chris Etherington: Yeah, it’s a hot potato. They have a mine field to go through. It obviously sells papers and that’s why it’s been all over the press for the last five or so years. Before then, I think the tax world was very different. Broadly, the important point to know is tax evasion. That’s the really bad thing. That’s illegal now. Tax avoidance, that’s legal, so one is a criminal matter. If you’re doing tax evasion, there’s still plenty of people out there doing that. I mean, if you look at what the budgets and things when the chancellor stands up with his little red box and so on, he says how much I’m going to recover from tax evasion, there’s plenty of people out there doing it.

Alex: And that’s effectively money laundering…

Chris Etherington: That’s criminal. Yes, it can include money laundering, just people not paying their tax, basically defrauding the government.

Alex: Yeah, and then the difference, flipping over to…

Chris Etherington: Obviously, we don’t do any of it. Tax avoidance is, yeah, a much broader term. And, again, that is brandied around and becoming more of a dirty word in itself. It comes down to confusion. You mentioned it. How do people understand what is genuinely just financial planning and what is avoidance? And if you look at what the law says, there’s case law basically going back donkey’s years, which goes along the lines of, and I probably paraphrase badly, that somebody is entitled to arrange their affairs in a way that helps minimise their tax exposure. That’s perfectly legitimate. But if Parliament didn’t intend this to happen, are you manipulating the rules, are you finding a loophole and exploiting it, that’s tax avoidance in their view and they don’t like that, for obvious reasons. It’s not what they want. Whereas they are obviously happy with financial planning. Tax avoidance is so broad, you could say you’re investing in [inaudible 00:06:37]. That, in a sense, is…Yeah, you are arranging your circumstances to pay less tax because there is a government-sponsored tax relief that you can invest [inaudible 00:06:50] like that.

Alex: So effectively it’s your role to take and do the tax advice and take you, your clients, and their pot of money, no matter what it is, and take it up to the line, but it’s set out effectively by HMRC, but you don’t cross it because then, as you said, you’re getting into serious, sort of nitty-gritty territory and you’re bound to be caught out. And that’s where, if you like, the Daily Mails of this world and the media have picked up on it and arguably twisted the facts slightly?

Chris Etherington: Ultimately, it comes down to there are thousands of pages of legislation now. It’s impossible for the layman on the street, ordinary citizen, to understand really what the tax rules are. It’s so complex now. When I started, you had a couple of books, and it’s now 12. It’s impossible. I can’t read all of that. You have to have specialists in each individual field. And just doing stuff like a tax return for some people was impossible because there’s absolutely no way you can self-assess without some help. So a lot of what we do is actually to try and help people understand what the rules are.

Alex: It brings, as some might suppose, nicely, in terms of, again, another term that’s sort of bandied around, predominantly by the media, in terms of offshore funds, whereby you say, “Well, I’ve got my pot of money and it’s held in the Channel Islands or it’s over in the British Virgin Islands and all of that.” And, again, it’s tarnished with a similar sort of brush. Are those sort of setups legal, illegal? What are the advantages, what are the disadvantages? Again, it’s a term possibly misunderstood. But where are we at, at the moment, in terms of legislation and what’s possible?

Chris Etherington: Yeah. Like you say, there’s a lot of potential in things like Panama. Before then, there was non-doms that came up in the election campaigns and stuff, and a lot of these terms are thrown out into the press and it’s like, oh no, non-doms are bad, Panama is obviously bad, offshore structure, that’s awful. And the trouble is, a lot of people aren’t really interested in the detail. I love tax. A lot of people don’t. Yeah, I know. I’m fairly unique and I chose to do this. Most people fall into the profession. Unless you get really into detail, and that’s not gonna sell papers, is it, if you’re going to get really into the detail of it.

So it is quite easy for things to get misconstrued. I mean, just turning to the Panama situation and David Cameron’s. So he invested in, essentially, shares in an offshore vehicle and it was set up by his father. I don’t know all the details. I haven’t looked at it that much in all the specifics, but broadly it was an entity which paid UK tax. It was distributing its income each year and David Cameron would have had to declare that on his tax return. That is the same as you investing on a blue chip company on the stock exchange as anybody else would. You could do that in an ISO or whatever. If it’s paying the same amount as UK tax, as it would be in a UK entity, then what’s the problem? But people say offshore and tax evasion and tax avoidance…

Alex: All together.

Chris Etherington: Yeah, you just read the headline, don’t you? There are things to be uncovered and it’s perfectly legitimate for people to look at Panama and things like that and see if there is…I’m sure there will be untoward things that are in there to be uncovered. It’s 11 million documents, I think. It’s gonna take somebody with a fine-toothed comb to go through it all, but…

Alex: Time will tell on that one, time will tell. Bring it back ’round. In terms of property investment, again, the buzzword is how you structure it for tax efficiency, capital gains, inheritance tax, company structures, how do you actually sort of structure purchases nowadays? Because, again, there’s so many obstacles of their sensible ways, obviously above board, as we’ve said, that you can actually structure that to purchase. What should one actually look out for as a property investor?

Chris Etherington: Okay, ultimately, it’s a bit [inaudible 00:10:38] a little bit. It really comes down to your personal circumstances. There’s not a one set of rules. This is the right thing for a property investor to do. One person’s situation may be completely different to another person’s. You might have somebody who’s married and in a property partnership, say. You might have somebody who’s just doing it by themselves. You have to take all of that into account. I mean, if you’re married, you might think about things like who’s earning more. A lot of the changes at high level, some of the bigger ones that were announced were around restricting the amounts of relief you can get on your mortgage payments. So that’s gonna be restricted to basic rate, 20% relief essentially, whereas in the past you would’ve got 40%, or if you’re an additional rate tax payer, if you’re lucky enough to be one, 45% relief. So that’s a big dip in terms of how much…It’s coming phased in, so over the next couple of years it’ll become 75%, 50%, 25%. I won’t throw numbers around.

But in those circumstances, you might think, “Well, okay, if my wife isn’t earning anything, well, maybe she should own some of the properties. If we’re going to acquire some more, maybe she should do it rather than me.” The issues with Stamp Duty Land Tax are interesting. I mean, you’ve got obviously this new 3% surcharge. From people I’ve spoken to, it’s not necessarily something that will change the behavior that they’re looking at. It’s more a case of, “Oh, this is an extra cost we’re gonna have to incur.” It’s like a business expense. It’s just something we have to take into account when we’re setting our events and so on to try and get the right sort of profit in the long term. So, unfortunately, I think whilst the idea is to disincentivize, I guess, the landlord [inaudible 00:12:14] market, I suspect it will just be passed on to the tenants in due course.

Alex: That’s my fear, but again, we will see, because it’s very early days. Talk us through, Chris, because I know a lot of people are bandying around ideas of if we’re looking to buy property, we’ll put it in a limited company structure. And there’s limited liability partnerships and all of that. If one is looking to acquire properties, what are the things you actually need to think through in the structures as well?

Chris Etherington: Yeah, well, I mean, you’ve got to think about what’s commercial first, what’s good for you. I mean, there are benefits to being in a company, there are benefits of being in a partnership, things like limited protections, one, but there’s also things like who’s gonna lend money to me. It’s easy to obtain finance when you’re an individual. If you buy to let mortgages it may start to get harder, but it’s my understanding is it’s harder to do it through a company even it is. The tax things to think about are, well, yeah, there are some tax changes and not all of those tax changes apply to the companies. In particular, that mortgage interest one’s a big one.

So there’s a distinction there. If you can get lending through a company…and actually some people are so worse off that after these tax changes come through, in earnest, once they’ve been phased in, you could end up making a loss after the tax cost. That, in itself, could mean that basically there’s no point in being in business, frankly. So what are you going to do about it? One of the considerations might be, well, can I incorporate? Well, that might be one [inaudible 00:13:43]. You’ve got to think about what the other implications are, the Stamp Duty Land Tax issues and so on. Like I said before, what you’ve got to do is look at your individual circumstances and then decide which structure is best from the outset.

Alex: Yeah, and take some pretty specialist advice as well, because, again, the great thing with PwC is just so many different departments and areas of expertise. You’ve just got to declare everything from your personal circumstances and really, I think, hand it over to you guys for you to navigate.

Chris Etherington: Obviously, I’d be happy to do that. The key thing is taking that sort of advice earlier on rather than later. It’s much easier to plan for the future than it is trying to unravel something from the past.

Later life and elderly care is one of the hottest topics currently both in the media and on family’s minds. Property consultant Alex Goldstein talks with carehome finder specialist Fiona Gilbert on the pitfalls to avoid when searching for a carehome for your relative, what you need to do and how to go about it. A highly insightful and educational discussion about what to look for in a carehome search.

What To Look For In A Carehome Search

Full transcript below:

Alex: Fiona sort of tell everyone a bit about the business and your involvement.

Fiona: I’ve been involved in the property sector now for over 35 years and more recently since about 1995, I’ve been involved with the elderly care home sector. And a few years ago, my husband’s mother needed to go into a care home and we found it very difficult to find the right place for her but at least we had the experience and we knew what sort of questions to ask. What we’re finding now is that fewer people have that experience and it’s a very daunting prospect, if you’re looking for a care home for a elderly relative perhaps or just a parent, so we felt that there was a gap in the market there and people needed help.

Alex: I really think they do, even more so at a time when they really need some handholding and I think everyone is sort of aware this is a growing concern. We’ve got a aging population, I mean is that sort of a fair comment?

Fiona: Absolutely, I think people are living longer, they’re generally healthier as they get older but then we found out this week that over 200,000 people per year are diagnosed with dementia and its probably that stage where a lot of elderly people feel they can’t cope at home, even with carers coming in.

Alex: And how do you go about the process because obviously if you’re living at the other end of the country to your relative and they’re looking at possibly contemplating going into care, what can you actually do because I think this is actually a really important point because I don’t know anyone else that does what you do.

Fiona: We help people who maybe have the long distances to cover because it’s very time consuming if you’re looking for a care home for somebody who’s at the other end of the country or even overseas. A lot of our clients have children who are abroad and so its very difficult, it’s costly, they’ve got to come over to the particular region they’re looking for the care home, they need their hands holding really and we can do that research for them, we can provide reports for them, we can take the relative into a care home to have a look round when they might not be available to do so.

Alex: How does this sort of all work into fees? I mean everyone sort of talks about care homes and costs involved. What does it actually equate to in sort of real terms and how do you look at financing of it if that’s an option?

Fiona: Well the vast majority of people will be self-funding because they’ll probably have assets in excess of £23,250 which is the current threshold. So, if they own a house then obviously they’re going to have to self-fund their care. The care home fee rates are going up all the time. The average is probably around the £600-700 per week and that can go up depending on what type of care is required to £1,200 a week if they’re needing nursing care and potential dementia care. And it does vary around the country, down south around London you could be talking over £2,000 a week.

Alex: I mean that’s some serious expenditure and I guess on the back of that, are you able to provide financial and legal advice or do you know the right people, how does that side of things work?

Fiona: We know the right people to signpost our clients in their direction, so we have a panel of reputable IFA’s and solicitors who specialise in the elderly care sector.

Alex: Great, so ok it’s all part of the service of holding the clients hand. I personally don’t know of anyone else, is there anyone else out there that offers this sort of service? I can’t believe that there is.

Fiona: There aren’t any in the Yorkshire area that I’m aware of. There are one or two people that do a similar sort of service elsewhere around the country, they’re quite difficult to find. We offer a national service to shortlist and analyse care homes all around the UK and carry out research and it’s up-to-date and it’s unbiased. You’ll find that a lot of websites actually take advertising from the care homes so inevitably those care homes are going to feature closer to the top of their recommendation list. We don’t recommend we just provide the information for people to make an educated decision.

Alex: I’m assuming if you’ve got a specialist requirement, onset dementia to name one of them, I guess there are specific types of care homes that one should and should not look at, and you’re able to sort of guide people and differentiate between the pros and cons of that.

Fiona: Yes, in the main you’ve got residential care, you’ve got nursing care and then you’ve got both of those with dementia as well. There might be other homes that offer facilities for people with Parkinson’s disease or other requirements to that person, so we can make sure that the homes that we look at and shortlist for the clients are relevant to their particular needs.

Alex: And you’re able to help with I’m assuming again access to these. I know there’s sometimes waiting lists for some of the better ones, is that something you can work on that side or is it providing the information, how does that work?

Fiona: Because we are familiar with the system we can very often speed the process up, which means that obviously if there are waiting lists, then we don’t jump the queue but obviously we can perhaps pull a few strings in the right area. And the other aspect that we can help people with is to potentially negotiate a reduction in the fee rates because they’re not always set in stone.

Alex: That’s a very valid point, I thought it was a set rate, most people assume that it is what it is. I didn’t appreciate that it was a game like buying a house and you can negotiate. I thought it was a set thing.

Fiona: No, if you know how to negotiate as we do then you can save quite a lot of money and you know when you’re talking about £1,000 or there abouts it’s good even if you can get 5% off.

Alex: It makes all the difference on that sort of scale. Obviously, I’m assuming that’s one of the pitfalls but what are the other sort of possible areas that you need to be mindful of when looking at a care home?

Fiona: Well a little bit like yourself when you’re looking for properties and you see the glossy brochures, you know what to look for behind the scenes and care homes in the main have lovely glossy brochures with happy smiling faces but behind the scenes there could be all sorts of things hidden and we know what to look for. We also when we go round the homes we actually see how the carers engage with the clients, it’s not just about the surroundings, you know you might have a beautiful home with a nice large bedroom with a lovely en suite, but you might find there are elderly people dotted around with no engagement with the staff at all and leads to depression and ill health.

Alex: And that’s the error that always get into the news and as you said it’s looking beyond that glossy brochure as on my side with property and seeing what’s happening behind the scenes. Obviously very very similar that you’re under a lot of pressure because obviously you’re trying to source the right care home and sometimes you come across as quite blinkered in your approach, you always need a third party like yourself to see through all of that and guide you in the right direction.

Fiona: I mean the Care Quality Commission provide reports but sometimes they might only happen once a year and things change. So, because our information is bang up to date then we know that home on that particular day might be better or worse than it appeared in the report.

Alex: Absolutely, and I suppose the obvious question is how much your services cost?

Fiona: We have a free service initially for the shortlisting of up to 30 care homes or nursing homes in a specific area. Thereafter it’s really now a question of bespoke service but put it this way it’s actually a lot cheaper than the weekly fees.

Property consultant Alex Goldstein gives his personal thoughts on the property market post Brexit. What should you do if you are now looking to buy or sell property and what does the future hold for property?

Brexit Update

Full transcript below:

Alex: Hello, I’m Alex Goldstein from Alex Goldstein Property Consultants. I’ve been inundated recently following the UK’s departure from Europe, which is still in the current throws. And I just felt should talk through if you’re looking to buy or sell property what should you do. Bottom line is don’t panic. It’s very easy to get bought and buy into this media frenzy at the moment, but we’ve got to remember a couple of things. The laws of property rely on supply and demand, we’ve also got to remember that George Osbourne and the Bank of England, Mark Carney has set aside £250 billion pounds to ensure that markets remain stable. We also have to remember that the UK start Article 50 and the proposed departure from the EU, it’s got nothing to do with the EU, so it’s on our timescale. It’s also the UK’s and the EU’s best interests to start sensible negotiations because after all we’re in it together and we’re both equally vested. The end of the day if you’re looking to buy a property as always, as I’ve always said get yourself into the best possible buying position. There are always people that need to buy and there are always people that need to sell. So, make sure you look out for those properties where the vendor is keen to sell, and you can form a bit more of a deal. If you’re looking to sell your property, again as I’ve always said make sure that marketing is absolutely perfect, and again judge an offer by its individual merits. Yes, of course it’s the offer amount, but it’s also the basis of the offer and if that’s right, again make an informed decision. Yes, there is some short-term turbulence, we knew that was going to happen. Don’t worry about it and I’ll see you in a couple of months when hopefully the dust has settled. If you want to chat anything through, feel free, give me a call and drop me a line and thanks very much for watching.