Hello Jason, I recently read a BBC News article which was very negative about online estate agents. I know high street agents aren’t their biggest fans, but was very surprised by the BBC! What’s your view on the high street v. online offering? Peter Hardwick.
Hello Peter, I saw the BBC article you mention which talks about out lack of customer service and gross over valuation as the biggest regrets that those who had used online agents have had.
Now I know I’m one of those traditional high street agents you mention, but the fact is, this piece was not simply a matter of opinion. It was based on actual customer experience.
Some people are turning to online estate agents to try and sell their homes because their fees are lower. A high street agent charges commission on a no sale, no fee basis. Online firms charge their fees, irrespective of whether they sell your home or not – some even ask for them upfront. So that fee might seem like a ‘bargain’ – but if your home doesn’t sell, then it’s your money straight down the drain!
This way of charging a seller has always left me thinking ‘where’s their incentive to get the best possible price for your home – after all you have already paid them’ so you might end up selling for thousands less than an experienced high street agent could achieve. Most high street sales negotiators working on your behalf are commission paid so it’s to their advantage to get the best price. The ‘local property expert’ from an online agent hasn’t got to bother trying to get that extra three or four thousand pounds that could make a huge difference to your overall moving costs.
Let’s say your home is worth £300,000. A high street agent is going to charge you around 1% + vat (£3600) and an online agent around £1000 (once all their hidden extras are added to their base line fee). On paper an instant saving of £2600. So where do I sign?!
You put your home up for sale at £315,000 allowing for a bit of negotiation room. A buyer comes along and offers £300,000. Now I know they were looking up to £325,000 as I have registered them as a buyer on my system and know they can pay more for your home. You tell me that you’d like £305,000 so I start negotiating on your behalf and finally settle at £310,000. We’re all happy.
An online agent knows very little about the buyer as they came via rightmove and has no incentive to negotiate. You say you’d like £305,000 you end up at £303,000.
High street agent £310,000 minus fee (£3720) = £306,280. Online agent £303,000 minus fee (£1000) = £302,000. So the high street agent has made a huge contribution to your moving costs.
I also have an issue with the way they promote the ‘local property experts’ side of their offering. This is very misleading. The folk who work for these companies do not have extensive local knowledge – how can they when they cover such large areas? They might be able to quickly pull off some information from the internet if they are asked a question about a local school but do they really know? A good high street agent will have expert local market knowledge, extensive local contacts and a waiting list of potential buyers. Having sold homes for nearly 30 years I know how important this is when helping people move.
Then there’s customer service – in my view the most important thing of all. There is a lot more to selling your home than simply sticking it on the internet and waiting for buyers to come along. Someone has to arrange and conduct viewings; negotiate the best possible price; suggest changes to the marketing strategy if the first flurry of interest doesn’t produce a buyer; provide expert advice and support every step of the way. The list of things good traditional agents routinely do for their clients just goes on and on.
Now some online agents do more than others, and some high street agents are far from perfect. In estate agency, as with everything else in life, you get what you pay for – and at the end of the day the low fee business model the online agents use works (for them) because they do the bare minimum! For some this is fine but for most people with busy lives using a high street agent makes the move so much easier and in all probability more cost effective.
Kind Regards Jason
For regular readers of my Q&A page here’s the BBC article. www.bbc.co.uk/news/business-37677444