Online estate agents first emerged over 10 years ago now. Run via websites and call centres, the first generation of online estate agents required the seller to do a lot of the work themselves. Since then, some of these services have become more hands-on with some even boasting local property experts. These so-called hybrid estate agents offer similar services to a traditional estate agent, albeit in a more stripped back form.
With many buyers starting their search online, and with both traditional and online estate agents having access to the most popular online property portals to market properties, what are the differences between them, and which is better?
Undoubtedly the biggest selling point for online and hybrid estate agents is the price. Most charge a fixed fee which tends to be lower than the commission you would pay a traditional estate agent. This perceived cost saving is instantly appealing.
However, there are a few things to note here. Firstly, some online estate agents will charge that fee up front. And in most instances, you will be required to pay the fee within a few months regardless of whether you’ve sold your home or not.
You need to watch out for hidden extras too. Many online estate agents will offer a number of packages which does give you the benefit of flexibility. But it can also mean that the advertised price isn’t what you end up paying. In some instances, you have to pay extra if you want them to prepare the property details, take photos, put up a “for sale” sign, and even conduct viewings. It’s important to be very clear what’s included and what the extra costs might be as they can soon rack up.
It’s also important to check whether you have to use the online estate agents’ own conveyancer or mortgage broker. It helps to keep your options open here, otherwise a cost saving made at one end may be lost thanks to overpriced services elsewhere.
And one final word on price. Research has shown that the best local estate agents will, on average, get you a 5% higher sales price than the best online or hybrid estate agents*. Could you be unwittingly leaving money on the table by being drawn in by the initial lower fee?
We’ve written before about the value of local knowledge when it comes to selling your home. This is particularly valid when it comes to valuing your home. How can an online estate agent value your home without knowing the area? They use online data available to them, but this does not always reflect reality.
The introduction of “local experts” to hybrid agencies is a bid to bridge this gap. However, how “local” are these experts? It’s worth finding out the size of the geographic area they cover to find out if they really have detailed knowledge of your area, and ask for details of similar properties they have successfully sold, and probably most importantly – where they were selling double glazing the week before?
Level of service
What’s included in your package from an online estate agent can vary quite widely. The same could be said to be true of traditional estate agents. This is where conducting some research pays off. Have a think about what is really important to you and then make sure you will get the level of support you want.
With a traditional estate agent, you get a true face to face service that can guide you through every step of the process. You can wander into branch at any time and get answers to your questions. Due to the commission-based fee structure, there tends to be a greater incentive to get the very best price for your property. They will therefore put effort into proactive and focussed engagement with the target market. They will also be there to negotiate the best price for your property and push through sales progression on your behalf.
With modern online estate agents, you may have a local contact who you can call and speak to. Their involvement in the negotiation process and sales progression is likely to vary more widely, however. It’s worth finding out how proactive they are willing to be when it comes to looking after your interests during negotiations.
Viewings is often one of the “add ons” for online estate agents. Many of them will be happy to take care of viewings for an additional fee, but are you happy handing your keys over to a complete stranger? At least with a traditional estate agent you are able to meet the person conducting your viewings in advance. If you have the time and willingness to conduct viewings yourself, this may be a non-issue.
Trust and security
Both online and traditional estate agents are governed by the same set of regulations, so the same advice applies here – make sure they are a member of The Property Ombudsman or the Property Redress Scheme. This is likely to be one of the most important financial transactions of your life. You need to be 100% sure you can trust the people you’re dealing with. Traditional estate agents may have been around for much longer and therefore seem like a safer pair of hands, but it’s still important to do your due diligence.
So, which is better?
It would be very easy for us to simply say traditional estate agents win, hands down. We believe that the value we add at every step of the house buying and selling process far outweighs any possible “cost” saving that online estate agents can promise.
But the reality is that some people who are willing to do a bit more of the legwork themselves have had very good experiences with online estate agents. The “best” option is therefore likely to depend on your individual set of circumstances, the saleability of your home and how much time and willingness you have to take care of things like viewings. The key is to be clear on what is included and what is not, and to consider all the pros and cons we’ve mentioned here.
At Templewicks we do both. We can tailor our services to strip it down to the same as an on-line agent and charge you a flat fee if that’s what you want, but you can still call in for coffee whenever you like. So, if you’re based in our area, maybe that’s likely to be your “best” option?