Famed for their low upfront fees and ability to divide opinions in the industry, online estate agents continue to be controversial.
Just last month, Housesimple became the first of the major online agents to do away with fees completely. Many commentators were quick to claim that this was ‘cheapening’ the industry further and was a move doomed to failure.
But, what is it that homeowners actually want from an online estate agent?
For the past 6 months, we have been running a quiz on Property Road for those considering using an online estate agent. The quiz asks 5 simple questions and makes a recommendation as to which online agent might be best for that individual, based on their answers.
With 3,186 responses, we thought now was the perfect time to reveal the data that shows exactly what homeowners are looking for when choosing an online estate agent…
Only 20.7% Prefer To Pay Upfront
The first question in the quiz has actually shown one of the strongest, and perhaps most surprising result. A significant 60% of people prefer to pay their estate agent on completion with only 20.7% preferring to pay upfront. The remainder had no clear preference.
The question clearly stated that upfront tends to be cheaper whereas on completion means less risk. Yet, despite this, it’s clear that the core model of online agents offering low upfront fees goes against what most people are looking for.
This may explain why more and more online agents are now offering no sale, no fee as an option. The stand out exception is Purplebricks who, despite dominating the online market, only offers upfront pricing.
Perhaps even more surprising, of those considering Purplebricks, 59% still preferred to pay on completion. If these statistics are a fair reflection of the bigger picture, it means the runaway market leader could actually be missing a significant chunk of potential customers.
65.3% Of People Are Prepared To Pay Up To £1000 Upfront
Of those who answered that they would prefer to pay upfront, a staggering 65.3% of people said they would be prepared to pay up to £1000 to sell their home.
Only 15.5% of people said they would be prepared to pay more than £1000 upfront, suggesting the sweet spot is definitely a figure sum.
‘Pay On Completion’ Sellers Not As Price Sensitive
When it comes to those who answered that they would prefer to pay on completion, the results are pretty evenly split.
Paying up to £1000 on completion just edged the biggest share with 35.5% of people. However, 32.4% of people were prepared to pay up to £1500 and 32.1% were prepared to pay up to £2000.
That suggests that those wishing to pay on completion are perfectly happy with paying more for the privilege and are somewhat less price sensitive than those preferring to pay up front.
72.6% Of People Are Happy To Conduct Some Viewings Themselves
When it came to who should conduct the viewings on a property, 42.7% said they were happy to do viewings themselves while a further 29.9% felt it should be a combination of themselves and the estate agent.
Only 27.4% said that they preferred their estate agent to conduct viewings for them. This suggests that perhaps the bulk of online agents have got this right by offering hosted viewings as an optional extra.
26% Of People ‘Unsure’ Whether They Need An EPC
There still seems to be some uncertainty about the rules regarding Energy Performance Certificates as 26% of people said they were ‘unsure’ whether or not they required one.
The remaining 74% of people were split down the middle as to whether they required an EPC or not. This suggests that the current approach of offering EPC’s as an option extra that many agents favour is probably the correct one.
‘Achieving The Asking Price’ And ‘Selling Properties Quickly’ Are The Most Desired Traits In An Estate Agent
As the final question we asked respondents which trait in an online estate agent they valued the most. Significantly, most people opted for either the ability to sell properties for their asking price (43%) or the ability to sell properties quickly (35%).
Only 9% of people felt that customer service levels or paying lower fees was the most important. This suggests that online agents who focus their marketing around performance will outperform those who focus on fees.
Interestingly, only 5% of people felt the option to pay on completion was the most important thing to them. This somewhat dilutes the strong response to the first question where paying on completion was by far the most popular payment method.
Instead, it seems, while paying on completion is desirable, consumers attach far more importance to getting the best price for their property as quickly as possible.
The online estate agency model was born very much on the belief people wanted lower fees and were prepared to pay upfront to get them.
If the results of our survey are anything to go by, this is not true, even for people already considering an online agent. That may also explain why more and more onliners are moving towards offering ‘no sale, no fee’ pricing.
The exception being Purplebricks who, alongside aggressive advertising campaigns, are able to buck the trend. How long the leading online agent can continue to operate without a ‘no sale, no fee’ option remains to be seen.