Online Estate agents offer enticing prices, often much lower than the traditional high street estate agent. However, recent events have led people to question which is best.
For a one-off upfront fee, these web-based organisations are offering a product which promises to put traditional estate agents out of business.
There is something very appealing about a new competitor, shaking up a traditional market. But when it comes to selling your house, which is usually the most expensive thing you own, why would you want to take a risk?
Traditional estate agents do charge more than their online competitors, but there’s a reason for that. When you look at the service they provide, there’s added value at every step of the way. For instance, they’ll take great photos which the average person wouldn’t have the equipment or the know-how to achieve, and they are practised at “staging” a property, so it looks better to prospective buyers.
One of the most important factors for an estate agent is local knowledge. A traditional estate agent knows its local area inside out, the staff there will have a detailed understanding of the community. They’ll know which properties are selling and for how much. Conversely, they’ll know which properties are not selling and they’ll have a good idea why. This is an area where online estate agents, in their current form, simply cannot compete.
A recent report found that traditional estate agents get their customers more viewings, more offers, more security in a sale and a better sale price in the vast majority of cases (see the full report here).
The online estate agent’s business model, as it currently stands, is fundamentally flawed. They take your money before they’ve actually done anything, and once they have received payment there’s little incentive to achieve a sale, let alone going above and beyond. Most traditional agencies don’t charge a fee until a sale has been agreed so they live or die by the number of sales they make.
Last year one of the most popular online estate agents made around £18 million in fees from houses which where unsold, and quite likely remain unsold to this day. During that time the online portal withdrew 21,380 listings of properties that were not moving so these organisations can actually take your money and after a while just give up and move on.
The fact of the matter is this: selling a house is not at all easy, it’s a complicated, detailed process which can have many unforeseen twists and turns. It’s far better to have an experienced expert helping you through rather than just doing it all alone. If you consider that an online provider can just take your money and have no incentive to find a buyer, there’s a good chance you’ll just be wasting your resources and you’ll have to go to a high street agent after all.