How you sell your house has changed dramatically in the past 15 years. Instead of traipsing down the high street looking in estate agent windows and going in to discuss what you are looking for, most of us simply sit at home searching for suitable properties on the internet.
As a result there has been an explosion in the number of online estate agents pledging to sell your house at a fraction of the price of a traditional estate agent. This is causing big problems for traditional estate agents, with new research showing that one in five high street house sellers are at risk of going bust due to online competition.
“Traditional high street estate agents’ profit margins are being squeezed from both sides, fro cut-price online competitors, to their larger counterparts on the high street who are forcing them to up their spending or give up the race,” Mike Finch of Moore Stephens told the Guardian.
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Profits at the big estate agents are plummeting – Countrywide has reported a 98 per cent collapse in pre-tax profits in the first half of 2017, while Foxtons pre-tax profits over the same period are down 64 per cent.
So, should you follow the crowd and list your property with an online estate agent?
Pros
You could halve your costs. The biggest plus point of an online estate agent is the cost. You can market your property for as little as £99 with online estate agents, but typically you’ll pay between £500 and £1,000. Compare that with a traditional agency that will charge between one and two per cent commission, which on an average property would be worth at least £2,200 plus VAT.
You can get the same service - the agents claim. Some online agents now offer local experts to help you sell your property. These people will help with viewings and progressing your sale to completion, so you're buying more than just on online listing and a similar service to the high street chains.
Cons
You pay even if you don't sell. Use an online agent and you usually pay your fees up-front, while traditional agents typically don’t get paid until your house sells. So you take a risk with an online agent that you could pay all that money and not sell your home.
You will get fewer services. Online agents make a big fuss about being much cheaper than the high street and still offering local experts, but it isn’t an accurate comparison. In fact, the National Trading Standards team has issued a warning to online agents.
“We’ve seen many examples of online agents making unsubstantiated claims about fees when compared to traditional or high street agents,” says James Munro, spokesman for National Trading Standards, in the Daily Mail.
“It’s wrong to make general claims about savings when the headline price does not include facilities such as sales board, floor plans, photographs, accompanied viewings or other facilities normally included with traditional firms.”
Use an online agent and your property listing may not have a floor plan and you won’t have professional help with pictures and viewings. To get these things you often have to pay extra, so keep an eye on your final cost as you don’t want to end up paying more than you would with a traditional agent.
After-sales support is limited. Anyone who has sold a home will know that a lot of the hard work happens after you’ve accepted an offer. A good estate agent will employ a ‘sales progressor’ whose sole aim is to move sales from the point where an offer is accepted to completion. You don’t always get that with an online agent – and you usually have to pay extra for it if it is available - and it shows in the stats.
eMoov users completed on just 51 per cent of listings and Tepilo 48 per cent, according to GetAgent.co.uk.
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