Who wins in the battle between online Estate Agents vs. traditional agents? There have been many changes in estate agency over the years, most notably over the past 15 years when Rightmove first made its appearance in the UK property market. Taking us traditional, high street agents, kicking and screaming in some cases, online. The term disruptive technology, is in this case, quite appropriate as it has shaken up the status quo and left us somewhat rattled!
So, how do online only agents compare with traditional agents?
The obvious place to start when making a comparison between the two is fees. The single biggest draw for using an online only agent for most is likely to be the difference in cost.
Online only agent fees start in the hundreds of pounds for the most basic of packages with many citing the perceived savings against using a traditional agent (based on average sole agency fees) into the thousands.
This is not always as it seems however, with these lower cost packages often being a fixed fee, payable on signing up for the service, whether you sell your property or not. This is in contrast to the usual, no sale no fee basis from a traditional agent. When you use a high street agent, if they do not perform (sell your house), you are free to use another agent once you are outside of your agreed agency period. You will not have to pay the agent who did not sell your house. If you have paid money in advance and your property is not selling, your choices are either;
No doubt realising that taking money upfront is a source of complaint from sellers if they fail to sell, many online agents now offer a more traditional, no sale no fee deal as an alternative.
Online only agents often also charge extra for photography, viewings, premium listings, floor plans and more – pushing up the cost from the headline figure considerably. These services are usually included in most agent fees on the high street.
Online agents make a virtue of their lack of a local presence, after all, this is one of the reasons why their fees are so much cheaper. With no expensive offices to maintain they have lower fixed costs, which enables them to pass these savings on to the consumer.
One of the great benefits of using a local estate agent is that they are local. They will know their patch well, which areas command the highest prices and what buyers are looking for. This local knowledge is invaluable when it comes to accurate property valuations. Local agents are also on the spot for viewings and can advise prospective purchasers about other things which may be of interest to them such as schools, transport links and local facilities.
Online estate agents operate at a larger scale than your average high street agent, this is one of the ways they can keep their fees low. Scale enables them to have a call centre, often open longer, some even offering a 24/7 telephone service. The downside to this though is a lack of consistency and accountability. We all know how frustrating it is to tell the same story to several different call operators when you are trying to get something done.
We believe that estate agency is a people business. Successful agents understand that dealing with people’s homes can be an emotive business and build relationships with their clients. You will generally be able to deal with the person who came to value your property all the way through the process of selling. You may not be able to call them at 4.00 am, but they will know who you are if you call them at 10.00 am!
Both online agents and traditional agents are advertising your property online. There are probably no estate agents left who don’t have a website of their own and hardly any who don’t advertise their properties on the major online property portals like Rightmove. Online agents have a disadvantage here in that they don’t have access to the other places where a local agent may promote your property – a shop window in a prominent location being the main one. Many agents will also feature your property in local newspapers and magazines. Far from being less visible, your local agent has a wider reach and offers more opportunities for buyers to see their properties.
Whilst it may be true that online agents are able to charge lower fees, we believe that the traditional estate agency still offers an advantage to sellers in terms of local knowledge, customer service and visibility. In short, you get what you pay for! For the moment at least, it looks like most sellers still agree with us with online agents currently only enjoying a 6% market share, despite growing by 61% last year.
For more advice on selling, get in touch with us or call in to your local Seddons Branch for a chat!