Perspective by
Sam Patterson, Co-Founder of KIRE
From Strategy Consulting to Real Estate
It was 2016, and I had just stepped into a meeting with the Chief Financial Officer of the $30 billion Verizon Business Group. In a boardroom with all her executive team and seated at the head of the table, she addressed her team sternly. You could see more than one person sliding lower in their chairs as the blood rushed to her head. We were in the middle of an intense project delivering a product line profitability reporting tool and strategic recommendations based on the findings. Her tech team was in the line of fire because they needed to run our model more often; however, legacy systems and lack of control over their master data meant that running the model was highly manual, and she needed her team to develop a more permanent solution. She stopped and said to me across the table, "Sam, what would you prioritise?"
This was a poignant memory for me because after spending several months working alongside a Fortune 100 company CFO, I had earned my place as one of her trusted advisors. It was also memorable because it was one of many data points gained during my Strategy Consulting experiences that shaped my understanding of the complexities of transforming large organisations. There is a lot of gravity and hesitation to change, in part because people resist it but also because it is difficult to govern and manage change across large organisations, often with histories of mergers and acquisitions that, in this case, didn't do the data and enterprise architects any favours. Sometimes, it is better to start with a clean slate, to define new services and value propositions that are not encumbered and held back by bureaucracy, and to build new processes and systems to support a unique way of being. When done well, the result is not a version of the original but rather a whole new species that can solve the problems for its clients better than the alternative.
Why KIRE Stands Out in the Real Estate Market
Fast forward eight years to the present, and I reflect on the past three years in which our young, agile, and disruptive company, KIRE, has been in operation. Unlike the Fortune 100 telco or the incumbent estate agencies, we have been free to chart our course with software, ideas, and services not formed within a large organisation, and it has made all the difference for our clients. What, you ask, have I observed about the market and industry through the lens of my cross-industry experience and global perspective? Whereas my market analysis can be found in the previous section, I will share a few of my observations about how the industry operates and how it may impact you here.
My first observation may seem obvious, but the implications are far-reaching for sellers. There are two sales for real estate agencies. The first is to get the contract to earn the right to sell your beautiful home, and the second is selling it to the next owner. Unfortunately, the incentives of those two sales are not always aligned.
The Hidden Dangers of Overpricing Your Home
To get properties to sell, agencies must be good at networking, marketing their company and services, earning your trust, and telling you they can get you the best price. It is natural for a seller to want to use the agent who makes them believe they can walk away with the most money. That is fine if they can get you a better price for the property than another agent (by methods such as knowing who the property will appeal to most and marketing to them or having access to better buyers or negotiation skills); however, if the property is overpriced, it will significantly impact the time it takes to sell your home and the price you ultimately get.
Having your house on the market for too long is not ideal for several reasons. First, it’s stressful because you constantly have to keep your home showroom clean and coordinate with agents for visits. Second, having the property on the market for too long is like having milk on the shelf going stale. Longer time on the market creates a more negative perception of the home as people start to think there must be a reason it hasn’t sold, that there is an opportunity to get the property at a low price, and worst of all, it erodes urgency and exclusivity, which we find are two of the most important factors that help motivate people to commit to making offers on expensive assets in the first place. By overpricing, your negotiation position is compromised, and from our experience, you will most likely settle for a worse outcome than otherwise.
A real estate agent’s second sale is finding a buyer for your home and completing the deal. The second sale becomes more challenging if they win the listing by giving you a high (and unrealistic) price. So, you say, their incentive is to price the house correctly! Well... not necessarily. Some agencies don't mind if your property sits on the market. True, they are not getting their commission until it sells; however, when a property is up on a portal, it acts as a lead magnet for them to get contacted by vendors who have similar homes, and buyer inquiries, helping them expand their buyer list to use across their portfolio.
So, it is not as though they don't want to sell your home, but other incentives exist. The process and strategy around selling the house are critical in delivering the desired result. And unfortunately, you really only get one chance to launch it correctly (with the right price). You don't want to be in a situation where you have had the property on the market too long because it was overpriced, only to have to take it off the market again for ~1 year+ to get a second chance to relaunch.
The Importance of Correct Pricing for Maximum Buyer Interest
Pricing properties correctly allows us to:
Get more people through the door, and increase the chances of the best buyer falling in love with it and paying the maximum market value.
Increase the chances of drawing multiple bids, so that we can run a process that drives the price up through competition and urgency.
Ensure that the sale will happen more quickly than it would otherwise. At the end of 2024, over half of the properties for sale in NW3 had been on the market for over 6 months (see: Area Overview Q4 2024). You do not want to be in that situation!
For these reasons, we spend a lot of time ensuring the pricing is right, given your unique property. When shopping for an agent, insist that they justify their price with concrete evidence supporting their price. Make sure they did their homework and can justify their recommendation! It will also be easy to tell which agents put effort into your valuation and, on that basis, who are more likely to be dedicated to your sale from beginning to end. At this point, we typically say: at £10m, every 1% of your property value is worth £100,000+. Wouldn't you expect to have a professional analysis of your property's value to ensure you are not gambling away your prized asset?
The Role of Intellectual Capacity in the Real Estate Process
My second observation is how critical it is to ensure a high level of intellectual capacity throughout the Estate Agency you choose. In any organisation, the quality and intellect of the people operating it translates into a smoother experience, especially if the process goes off the "happy path".
My first job out of university was in a rotational leadership program at McMaster-Carr. They had a highly advanced operation that was so fine-tuned that we would hold meetings over errors that represented 0.03% of all orders (and there were 20,000+ orders leaving this warehouse per day!), to continuously improve the processes and continue to drive the mistakes down and value and consistency for customers up. Because of this competitive advantage (and others I can share with you over a coffee), they commanded a premium in the market because of their efficiency and accuracy on their orders. As a rule, everyone in their company, down to the hourly forklift and warehouse workers, had to have a college degree. Now, not all degrees are created equal, but their bar was set at a level where the weakest link was much stronger than the weakest link of their competitors, and they knew that hiring people with a certain standard of intellect would support good decisions throughout their organisation and pay back dividends. Throughout the selling process, ensure your agent has the highest quality people to support you, make the selling process enjoyable and as frictionless as possible, and represent your property in the best light.
Why Local Knowledge Is Crucial for Property Sales
My last observation is how varied the residential property markets are in different pockets of London, and for that reason how valuable it is to have local agencies with in-depth local expertise supporting your sale. For example, it is essential to be able to explain to a buyer why Glenilla as a road will achieve a different price per sqft than Glenmore or Glenloch Road will, when all else is equal. It is also essential to understand why Hampstead market for homes above £3m has been somewhat insulated from interest rates and non-dom policies compared to other areas to reassure and inform buyers about their decisions to buy in the area.
For NW3 and NW8 the answer to these questions lies in the nature of the community – it is not a location which is more of a store of wealth for foreigners who visit for a few months a year like Knightsbridge is, but rather a location that has unique architecture, buildings with expansive gardens, excellent schools, and proximity to financial centres that make it very desirable for families. When people buy a home to live in with their family, their priorities around the property investment and returns vastly differ from those of other buyers like property developers. Agents who understand these factors are better positioned to showcase your property and what the neighbourhood offers, and effectively communicate and justify its value to prospective buyers.
KIRE’s Approach to Consistent, Reliable Results
These types of observations and factors we control at KIRE have contributed to our ability to deliver great results for our clients consistently. If you would like to talk to Michael McHale or me about our process and how we can help you achieve your property goals, please send us an email at hello@kire.co.uk, we would love to speak with you.
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