What is an Online Estate Agent?
Whenever an article appears in the press specifically about ‘online’ estate agents and the services they offer, a raucous debate normally ensues in the comments section. The high street agents staunchly defend their service and reputation, fiercely opposed to the new low-cost entrants in their industry. But does lower fee necessarily mean lower quality service?
Websites such as property broker have been around for a number of years, and the concept is simple. You list your property for a one-off low fee on their website. There are no bells or whistles, and there isn’t much in the way of advice or guidance and you are effectively left to your own devices. For the uninitiated or less experienced property seller, the task in hand could appear a little daunting.
If you browse the internet you’ll find a host of similar websites, however they all have a common failing. In the bigger scheme of things, they don’t attract much internet traffic. If you really want to sell your property you need as many people that are looking for a property like yours, to find it.
An ‘online’ estate agent
The distinguishing feature between an online estate agent and a high street estate agent is simply the lack of a high street based, customer facing office. Online agents aim to replicate as much as the service provided by a traditional high street agent as is possible, however for a lower (and better value) fee to their clients. Unlike do-it-yourself style websites, online agents are able to advertise your property on the leading UK property portals such as Rightmove, Zoopla and Find-a-property, which offer marketing services to estate agents. In fact a recent survey carried out by The Academy concluded that a combined 84% of home hunters use Rightmove repeatedly or regularly. Since its introduction, Rightmove has changed the way in which home hunters operate. It’s much more convenient to search for your new property online. There’s no need to spend an entire day visiting multiple agents offices and no need for any dirty fingers searching through numerous local paper property supplements. It’s so easy to use Rightmove that you can even register your property requirements with every agent in your chosen area with just a few clicks of the button!
Good and bad in equal measure
There is good and bad in equal measure in any industry. Stop and think about it for a second. We receive brilliant services (a favourite of mine being Dell Computers customer service) and not so great services (that time I was left sitting at my restaurant table for an hour without so much as a drink being offered). It’s no different in the real estate industry. Whether an agent is a high street service or an online one, there is going to be a huge void in difference between the very best and the worst services available. Look out for qualities such as experience, their qualification or any accreditations they belong to; are they transparent and honest in conversation? Do they appear knowledgeable? Have they been recommended by a trusted source? Have they explained exactly what their service constitutes? Are you happy with the fee being quoted?
The Online alternative
Online estate agents are certainly not going to be for everyone. Many people value the service a good traditional agent offers. A good quality online agent will attempt to replicate as much of the service of a traditional agent as possible, however some elements of the service are simply not practical to offer (especially given the disparity in fees being charged). An example of this is the way in which buyer viewings are handled. Many online agents offer their service nationally, so it would be impossible to be able to provide hosted viewings for their sellers. Therefore, if having your viewings conducted by the agent is important to you, it’s more likely you will require the service offered by a high street agent or an online agent that’s based locally that provides this.
Why do we think Online agents will begin to gain a bigger market share?
Some of the factors we think will play a part in the growth of Online agents over the next few years are:
Broadband and the internet is still growing in the UK
People not only look for a new property on the likes of Rightmove, but they use Google to search for services that they require. Therefore if you have a well structured, concise and easy to use website that can easily be found by sellers and landlords alike when searching for services on the internet, you have a chance of winning some of the business that might have ended up with a high street agent.
Online buying and selling is becoming the ‘norm’
Younger more tech ‘savvy’ generations do everything online, from their social activity (Facebook and Twitter) to buying clothes and groceries, due to the convenience factor. They are also more confident and trusting in dealing with website based businesses which are often faceless (such as Amazon or Ebay).
Online valuation tools becoming widely used and more accurate
Sellers have access to an array of online valuation tools, such as Hometrack , Zoopla and Mouseprice/Calnea. This is eroding the advantage that the traditional high street agent had when offering a property valuation. Any advancement in technology should further reduce the need for ‘human’ advice. Also portals like Rightmove provide statistics for properties that are marketed and this ensures it’s easy to assess if the marketing price is too high, simply by monitoring the number of page views and viewing requests a property attracts. If the price is reduced, and the viewing requests increase significantly, then it’s an indication that you are much more likely to attract a buyer. This bit isn’t rocket science.
Online agents market properties in much the same way as a traditional agent
As already mentioned online agents advertise your property on the UK property portals such as Rightmove, much in the same way as a traditional agent. These websites are used by almost all home hunters. If your property is priced attractively and marketed well, it’s likely to get noticed. localised Online agents even advertise in local press and distribute leaflets, exactly like a traditional agent.
Many new online agents have previous experience as a high street agent
The better online agents are experienced estate agents, and know their profession well. Some are even NAEA and ARLA accredited. This ensures they are industry qualified and adhere to strict codes of professional conduct. Just because they have chosen to run a business with lower running costs and therefore can reduce their fee, does it mean they offer an inferior service? It’s an old fashioned way of thinking.
Agency conducted viewings are not required by everyone
It’s the one element of a traditional service that many web based agency models will not be able to easily replicate. But is it an element that you would want to pay a much larger fee for (likely to be many thousands)? If you reside at the property you are selling, is it really such an inconvenience to host your own viewings? Are you not able to tell a prospective buyer about local Schools, transport, or what the local town has to offer as well as any agent could? The internet has a wealth of information, and you could easily prepare a simple guide sheet for any would-be buyer. When you consider that much of the wider public do not like to be ‘sold to’, we’re not so sure that the addition of an agent in this part of the process (especially if trying too hard to sell the property) is such a key attribute in obtaining an offer of purchase.
Value for money
The average estate agency fee in Britain today is 1.8% (source OFT). The average online agency fee is just under £1000. On a typical London property where a sale is agreed at £393,000 the traditional agent fee to the seller inclusive of VAT is £8488.80. That’s a lot of extra cash available for more important things.
Good post and very informative. I’ve been thinking about using an online agent and so far have looked at House Network and i-sold to compare their respective services. I’ve now checked your website, and like some of the things you offer. Ive used normal agents in the past and found them Ok’ish (because I didn’t always feel I was getting the truth), but I thought they were a bit expensive. So far the online agents I’ve reviewed are quite a bit cheaper. I just worry that they won’t be able to sell my property because every other property nearby to mine is being sold by a regular local estate agency.