Whilst the use of online estate agents is still relatively low in the UK (just 5% use virtual agents), it is expected to grow by the year 2020. As a result, the media has been touting the benefits of using online agents instead of high street estate agents. We’d like to give another perspective on whether online estate agents are the right decision for the typical UK home owner.
If you’re wondering whether you should use a traditional high street estate agent or an online one, this comparison of the two may help with your decision:
The True Cost
Let’s look at money first. The major, well-known and frequently cited appeal for using online estate agents is the cost saving they offer, but it is worth investigating this benefit in more detail.
In my personal experience, and that of most people I know, low cost isn’t always the smartest option. In the case of pretty much every purchase we make, value for money is always the better way to go. In the case of property agents, there’s a lot involved in the sale of your home and the value comes at many stages. It’s up to you to decide which is most important to you – and whether you want to sacrifice that for low cost.
Where’s the Incentive?
Online estate agents don’t operate on a commission basis. They charge a fixed, upfront fee, which is typically less than what you would expect to pay out to a high street estate agent. Sounds great, doesn’t it? It can be – but no commission can greatly affect how your home is sold.
There’s a reason why the commission model still works – and why the upfront fee sometimes doesn’t, and it comes down to incentive. Many argue that the upfront fee charged by online agents simply pays for listings and adverts rather than rewarding them for viewings, interest and sales, and that it encourages minimal effort and performance by the agent – after all, they’ve already been paid so why would they then want to work harder to sell your home?
There is a positive to that, of course. For those that feel confident in their ability to sell their own home, and have the time to do that, it makes financial sense to choose the online option. Buyers often view homes online first, after all. It is then simply up to you to convince those buyers that your house is better than all the others they’ve added to their shortlist. You may be a natural property mogul and you may secure a sale in short time. But, you may not.
You may find yourself in a situation where you have to make yourself available to meet many different people, at different times of the day and week, only to find you no one shows any interest – and you probably won’t know why (because there isn’t a third party who has met those people to give you any feedback or advice).
Traditional estate agents operate differently. They are driven to sell your home for the best possible price in the shortest possible time – which benefits both you and them. They go far beyond relying on the interest generated from a 50-word description of your property and a few images online; they compile a strong case for your home.
Not only do they have a deep knowledge of the local market (which enables them to generate the smartest valuation of your property), they also know what people are looking for from a house in your specific community – and why other properties are selling well (and not so well). They combine that local market insight with the buying signals and feedback they gain from observing and speaking to the people as they show them round your home, which is incredibly powerful, when used by an experienced property sales professional.
Online agents don’t typically accompany interested buyers to your property unless you pay extra (upfront fees are rarely as good as they seem, after all). You are expected to show people round and sell the merits of your home in the best way you can. Again, if you are confident in doing this and are completely comfortable letting strangers into your home without knowing anything about them in advance, this option will work well for you.
Remember though, you are not necessarily selling to people like you. What you will need to do is consider the needs of your buyer. The reasons you love living in your home may not motivate others in the same way, so take care to consider how your home will appeal to different people. You also need to consider that many people don’t like being shown around a home by the vendor and actually prefer to do the viewing with the agent.
If you aren’t comfortable with the DIY arrangement, or you are older or have children in the house, you may well prefer the traditional estate agency approach, whereby they get to know the viewers first and stay with them throughout the visit to your home (which can happen while you’re there or out of the house). In this case, the agents will sell every advantage to living in your home; often in ways you haven’t even thought of, promoting the benefits to every viewer in a different way to appeal to each individual and family in turn.
It is this personalised approach that often secures a buyer faster, which brings us on to the next point…
It comes down to incentive, again. If you’ve already paid an online agent to sell your property, where’s the urgency to find a buyer?
An online agent is relying on your property being seen online. A traditional agent uses those same online websites to advertise your house (Zoopla, Rightmove, etc.) but also has a list of people on their books who they already know are looking or a house like yours. This can dramatically speed up the selling and completion time of your home.
A major online estate agent has recently come under fire for inaccurate advertising, taking much longer than claimed to find buyers, with a high percentage never actually making it to completion. This could be due to many reasons, partly as an effect of vendors being required to sell their own homes without experience of doing so before, and partly because the online estate agency model is still a relatively new one.
It pays to look deeper, beyond the initial and alluring cost savings, to consider whether you really want to sacrifice effort, security, convenience and time in the process.
The case for traditional
As a traditional agent with many years’ experience selling and renting homes in our local area, we hope we have shown why there is still a place for real people in combination with the benefits of online advertising. There is a place for all of us; it just depends on who you are and what is more important to you.
If cost is your driving motive, online may look better initially, but the knowledge, network and effort of an experience, local estate agent is worth a great deal more than the cost savings you could make early on. There is simply no substitute for having someone on your side driven to set the right price, qualify buyers, manage viewings, liaise with solicitors, negotiate prices and handle the process right through to completion on your behalf.
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