INHOUS A Passion For Property And Service
Fri 15 Jan 2016
By Alexander Fiske Harrison
Two words crop up several times during my interview with David Johnson, MD of London-based boutiqueproperty consultancy INHOUS , and those are challenge and independence . As does a third, and one whichis too often misused in the interlinked worlds of sales, marketing and PR, and that is passion . However, whenDavid says it, he means it.
He began his career with one of Irelands most prominent property firms, Hooke & MacDonald, at the beginning ofthe millennium. During those years of plenty, The Irish Times said, the rise and rise of Hooke & MacDonaldparalleled, in many ways, the rise and rise of the Celtic Tiger . In the midst of this boom, David did hisapprenticeship in the twin trades of marketing and sales, before moving on to a smaller brokerage which providedmore varied work and allowed him to develop the knowledge and skills at the higher end of the Dublin market to
which he found himself naturally migrating.
However, after the global financial crisis crippled the Irish economy in 2008, David seized the opportunity to lookfurther afield, and central London seemed the most obvious destination with its apparently bullet-proof bubble ofa prime property market.
David learned this new territory at Marsh & Parsons, working among the packs of Londons young and hungry agents, but all the while he observed with slightly older and wiser eyes. He maintains that perspective to this day,sitting back in his offices opposite Roman Abramovichs Chelsea Football Club stadium, talking with the softcandour of a man explaining a good idea, rather than selling an expensive concept.
London was a surprise to me, he says, it is completely unregulated, unlike Ireland. During my time in agencyhere I noticed the competition was so fierce, with so many agents fighting for the same limited stock, we wouldcome up against other agents completely overvaluing properties just to win the instruction. They werent trying tovalue the property at the price they could actually sell it at, they were being misleading and over-promising. This
would inevitably lead to frustrated vendors and landlords.
I remember a case when I was asked to give my opinion on a property that was on the market with anotheragency, it was a small two bedroom that had been on the market for 700,000, and they were not getting anyviewings. The owners just had a baby and needed more space. They had moved in with their parents thinking itwould be temporary, and, as they were expecting to achieve 700,000 they were also trying to buy for this price.
After visiting the property and studying comparable evidence the real value of their property was 470,000, theoutcome was they had to move back in. That really saddened me. I felt for them, they had been wrongly served .
It is recounting stories like this that the passion in Davids voice comes to the fore.
So, seeing the space in the market for an independent intermediary between vendors or landlords and thevagaries of the most aggressive and lucrative property market in the world, he set up on his own at the end of2012.
I always explain what we do with my first case study. It was a property I took on in Earls Court. We wererepresenting the vendor. I got all the agents in and straight away I cut short any sales pitch from these agents asId heard it all before: I generally advise joint sole or multi agency to introduce competition and I know from myown time that we worked so much harder if we thought a rival might sell it before us.
I valued the property at 1.2 million and we went with two agents. After six weeks the highest and strongest offerwas still only a million-fifty. That agent was trying to convince me this was the best offer that could be achievedand strongly advised we accept it. However, it was clear to me that what he wanted was his commission.
I had studied the local area and wasnt comfortable with his price. He said to me well, weve done eighty-oddviewings, this is the best offer we can get you. But of those 80-odd, how many actually wanted to see it? Howmany were viewers were suitable? The client doesnt know these things and, what is more, they are emotionallyinvolved. They worry if they dont take the offer theyll be missing out. Im not emotionally involved and bystudying comparable evidence I felt we could get more.
So the agent suggested dropping the price to 1.1 [million], but I couldnt see the sense of it. I instructed them toknock 50,000 off, and the very next weekend we got that full asking price of 1.15 million. Our client was100,000 better off than if they hadnt gone with us. And it didnt cost our client any more to avail themselves ofour services as our fee is retained from the successful agent.
Progressing the business, David began advising corporate bodies on their distressed asset portfolios, using thesame concept as he would for a private client: looking at each asset and devising a strategy to maximise itsfinancial potential.
I recall another great case study, an apartment which a bank came to INHOUS to advise them on. It had beenon with various top agents for over a year with no interest. The property was looking extremely tired, so weimmediately proposed some minor refurbishment work, along with getting the property staged which meantrenting furniture to turn the property into a show house. Within a 6 week turnaround, we put it back on the marketwith the right agents and achieved 20,000 a week rent for the property .
Dealing mainly with overseas or time poor clients along with corporate bodies, David says his greatest difficultywasnt finding new clients but finding the right personnel for the rapidly growing business.
I was looking for a surveyor to diversify our capabilities in that direction, but ended up being so impressed whenI met Valerie Nestor, who was doing corporate relocations at Knight Frank, that she came first, bringing her skillsets with her. Valerie instantly had the same vision and most importantly the passion to want to build the businessand to make a mark in Londons property market and weve havent looked back since. Our corporate relocation
service has proved to be a massive success, beyond our expectations to be honest.
Having turned over 31 million worth of property in 150 transactions in the past three years, we are now a teamof eight and growing, with plans to open a second office in 2016.
Our services have expanded to property management, but as we are so hands on we have to limit the amount ofproperties we take on. We do not charge the high fees agents charge because we dont have the overheads theyhave. And, because we limit the stock we take on, we try to give the tenants renting the property the attentionthey might not get from the bigger agents out there, which in turn leads to longer tenancy.
David dislikes the word concierge, with its connotations of exclusivity and luxury only, but the way INHOUS hasdeveloped is a complete service of that order, from giving a valuation you can rely on all the way down the line tomaking sure the lights are on when a viewer comes to call (an agents task which is almost never fulfilled.)
Our goal is to make the estate agents job easier, by staging the property and making sure it is competitivelyvalued before bringing it to the market. This all leads to a shorter turnaround time while achieving maximumreturns. Were not anti-agents, we were agents, and we work with them now. When we give an agent a property,and they perform, we bring them another one, and these are properties they might not have been instructed onotherwise .
Our clients are happy as we take on each project as if its our own: we deal with every aspect of the processuntil completion, we give them complete reassurance along the way, and we do not charge anymore for ourservices .
David thinks its simply a matter a time before we see more businesses similar to INHOUS, and looking at theminefield for vendors and landlords the market is today, it is hard to disagree with him. However, for the momentINHOUS is certainly the lone independent voice rising to Londons challenge.