There’s been a significant shake-up in the way we sell our houses, with the major plus being big savings for sellers.
It’s due to the mini-boom in online estate agents such as housesimple.com, purplebricks.com and property guru Sarah Beeny’s tepilo.com, which charge much lower fees than the traditional high-street agents.
Some 5% of all properties in the UK are now sold via online estate agents. These websites offer similar services to a traditional estate agent, but by choosing a basic service and doing some of the work yourself – such as conducting viewings – you save money.
How do the costs of online estate agents differ from high street estate agents?
What all online estate agents have in common is a fixed-fee, low-cost alternative to the average 1.5% commission that high-street estate agents charge.
For example, if you sold a property worth £250,000 using an estate agency charging 1.5% commission plus VAT, you’d pay £4,500. Whereas online estate agents typically charge a flat fee of around £500, regardless of the value of the property.
Comparison site sellingup.com has useful filters to help you compare the price you’ll pay for each part of an online estate agent’s service, from simply putting up a For Sale board to conducting viewings, producing photos and floorplans, and listing your house on property sites such as Rightmove and Zoopla, and final-price negotiation. You can also read customer reviews.
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How do online estate agents work?
Online estate agents are simply those without a ‘shop’ on the high street and generally charge flat, lower fees than a traditional agent.
Most agents will send someone to your property to take photographs, compile a floor plan and an Energy Performance Certificate, and provide a valuation.
The house is then advertised on the biggest property search websites such as Rightmove, Primelocation and Zoopla.
The agent arranges your viewings, but you usually show people around the property and answer their questions. The agent should then negotiate a price and oversee the process until moving day – for example, by ensuring solicitors are instructed and a memorandum of sale is sent.
Can you sell your home yourself?
What are the benefits of using online estate agents?
The biggest advantage is lower costs. If you are selling an expensive property you can save tens of thousands of pounds.
The vast majority of buyers now search for properties online, instead of in high street windows. And if you have the confidence and time to deal with viewers yourself, you may actually be happier cutting out an expensive middle man.
Just be sure to choose an online agent that is a member of the Property Ombudsman and the National Association of Estate Agents.
Online agents are confident about their service. Online estate agents eMoov says its current average selling time is 20 days, compared with a Rightmove average of 65 days for all agents, while it achieves on average 99pc of the asking price in comparison to agents’ average of 96pc.
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What are the disadvantages of using online estate agents?
High street estate agents say you get what you pay for. They say they offer a superior service because they have the local knowledge and contacts that will ensure you get the best possible price for your property.
While many buyers do search for properties online, they also like dealing face-to-face with a local agent.
With high street agents the fee is paid once the house is sold, but most online estate agents charge fees upfront and this is non-refundable if the house does not sell.
You also usually show viewers around yourself – not ideal if you do not live near the property you are selling.
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Is an online estate agent right for you?
Those against argue that even online estate agents with regional reps could struggle to compete with high-street agents who know the neighbourhood and property prices inside out.
Consider, too, the human approach: the personality and approachability of a good agent can secure the best price and right buyer – you need to weigh these factors up against the extensive savings to be had by going online.
Just how accurate are valuations by online estate agents?
Oliver Lewis, sellingup.com’s founder, says: "Some people will be sceptical about an online agent’s ability to value property with true local knowledge, but increasingly they are recruiting reps on the ground who really do know their local markets."
Money expert Annie Shaw answers a reader's question on using an online estate agent:
We are thinking of selling our home in order to downsize.
My husband is keen to use an online estate agent rather than a local one to save money on fees, but I am dubious.
What do you think?
Online estate agents are disrupting the property market, just as the price comparison sites once disrupted insurance broking, loans and mortgages.
For selling an ordinary urban or suburban home, virtual agents’ 24-hour service knocks spots off the sleepier high-street chains.
The new breed of agent will value your home, list it on the main property-search portals and charge a flat-rate fee – a fraction of what you would pay a conventional agent.
On the downside, you may need to pay the fee upfront, and may not get it returned if the agent fails to sell the property. While a flat-rate fee may seem attractive, the agent has less incentive to get you the best deal than if he received a percentage of the selling price.
Expect to do most, if not all, of the viewings and don’t expect timewasters to be screened out.
While your house will receive a professional valuation, the person who carries it out may not have local knowledge. That’s OK as long as properties are selling at a reasonable rate in your area; check that your asking price is comparable with other similar homes.
If, however, your house is unique – in location or style – so difficult to value accurately, or if it will be priced at the top end of the market, or you’d like more hand-holding with your sale – as downsizers often do – then you will value the personal service of a traditional agent.
Although you may pay far more, if the agents are doing their job you should achieve a higher price from which to remunerate them.
Next article: 10 things you need to know before putting your house on the market >>>
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