Online Estate Agents vs High Street Agents – it’s an increasingly important question as to which one home sellers should opt to use for the most efficient and cost-effective way of selling their home.
While vendors will save thousands of pounds in commission when using an online estate agent – because they offer a full fee and not a commission-based service – what will home sellers be signing up to and are there any catches?
Here, we explain the pros and cons of traditional estate agents and their online rivals.
Rapid rise of online estate agents
There’s no doubt that the rapid rise of online estate agents has had a big impact when it comes to selling our homes.
The traditional high street agent offers a service that’s based on a highly personalised offering that will help the seller from the beginning of the property selling process, right through to the finish.
They then receive a commission – as much as 3% of the property sale – for their efforts and on a £400,000 property, this will cost the vendor £12,000.
The problem facing traditional agents is that their online estate agent rivals are also promising a personalised service as well but without the hefty commission fee.
Instead of this, vendors will be paying a fixed cost upfront, which tends to be a lot cheaper.
A typical online estate agent will charge between £495 and £1,500.
While this is a tempting offer, potential home sellers need to appreciate that for some online agents this fee is non-refundable whether their home is sold or not.
This then brings a positive for traditional agents since they are only paid when the house is sold.
Online agent versus a high street agency
Indeed, most of the pros for using an online estate agent versus a high street agency is usually down to cost.
The best online estate agents are offering homeowners the opportunity to save thousands of pounds when using their service rather than a high street rival.
Benefits of using an online agent
In their offering, Housesimple says that a vendor could spend £6,000 in fees because of their costs structure and, they claim, that they achieve close to 99% of a property’s asking price. They also point out other benefits of using an online agent:
- Vendors get a 24/7 service. Since the Internet never sleeps, home sellers can manage their own selling process when they want to. Many online agents offer a dashboard which acts as their personal agent and means they are a ‘virtual estate agent’.
- On call. Online agents may also offer a contact centre, so there’s always someone to speak to. For example, the offering from eMoov has a dashboard which allows clients to track and arrange viewings and also manage offers being made on the property. The agency also has a call centre available Monday to Friday between the hours of 8am and 8pm with shorter weekend hours. However, most online agents also offer a personalised service that will assist vendors.
One of those doing so is Purplebricks, so the seller is connected to a local expert who they can then meet with and liaise the viewings and offers as well as the property’s selling price.
Which online estate agent is best?
When it comes down to deciding, ‘Which online estate agent is best?’ then there are positives for using them, including that the vendor is free to use several agents at the same time.
While there may be fees attached, most online agents don’t have a contract period so it’s possible to use other agents if you want to.
Having discussed the pros of using online agents, it’s also worth appreciating that there are some downsides. They include:
- Paying upfront. The biggest downside for using many online estate agents is that their fee is payable upfront and you will be spending this money, whether or not your home sells. So, while their offering may appear cheaper when you begin the search for an online estate agent, you could end up paying should the sale fall through. However, there are also a growing number of online agents who allow vendors to pay their fees on the sale completion.
- Variety of services. Keeping in touch can be an issue – for online agents offering a telephone service that is available 24/7 means you may end up speaking with different people each time.
- Extras add up. The online estate agent will have a flat fee but there are extra costs that quickly build up such as having a floor plan created or having professional photographs taken. It’s worthwhile monitoring the potential final cost because the vendor will need to avoid paying more than they would if they used a traditional estate agent. Having said that, these extra costs may help sell your home more quickly.
- Viewings. This can be problematic since the basic offering from online agents means the vendor will have to carry out the viewings. Most people will be happy showing a stranger around their home. There will be some property sellers who are not so comfortable with that prospect or may not have the time to do so. Most online agents will offer the opportunity of accompanied viewings as part of a package or as an add-on when necessary.
Using high street estate agents
While we’ve examined the pros and cons of using online estate agents, we should take a closer look at the offering from traditional agents.
There’s no doubt that using a traditional estate agent will bring peace of mind because you will be dealing with a professional who has lots of experience in selling property.
They should also build up a rapport and learn all they can about your home to sell the benefits of it to a potential buyer. The pros include:
- Service. The high street agent will have employees to negotiate and accept an offer and then deal with solicitors and the chain you may become involved with.
One London estate agent, Jeremy Leaf, says: “Traditional agents check the purchaser’s financial background, and their viewing history before making an appointment and then carrying out the viewings.”
“The agent also asks questions of buyers that the vendor may find uncomfortable, including what they earn and the type of mortgage they require and carry out money laundering checks.”
One survey carried out by Haart, an estate agency, found that trust also played a big part in people using traditional agents.
The chief executive, Paul Smith, said: “Most people like to walk in and speak to a real person before handing their keys to someone they trust.”
“The high street agent will also act for both parties to protect them from fraud and also see how serious a buyer is about a property.”
Mr Smith also points out that vendors can trust an experienced traditional agent to get the best price for their home and deal with the negotiations – plus handle the sales process and bring reassurance that potential problems will be dealt with.
- Knowledge. One of the benefits of using a high street agent is they have lots of local knowledge, something that an analysis by the consumer watchdog Which? found. They say that online firms have experts who may live miles away, while high street firms are close to homes they sell.
Also, in addition to knowing the area’s pricing levels, they will also understand the local market trends that an online agent may not know.
- You get what you pay for. The same survey from Haart found that 78% sellers said they would prefer to get a high price for their home than pay a small fee.
Mr. Leaf said: “Paying less to an online agent may be tempting, particularly for those on a limited budget but it could be a false economy. It’s only cheaper using online agents if they sell. A high street agent will achieve the best price when selling without upfront risk costs and deliver a quality face-to-face service.”
Downsides for using traditional high street agents
The downsides for using traditional high street agents include:
- Cost. Nearly one in three home sellers said that the price of the agent’s service can make or break the decision to use one, a survey by Purplebricks found.
- Buyers search online. Since high street agents and online agents are using websites such as Zoopla or Rightmove, they are meeting demand from buyers who begin their search online. A growing number of buyers begin their search for a home online, that’s the audience that online agents will be targeting.
- Viewings. While high street agents will manage viewings for a client, this will be restricted to their own schedules. For out of hours viewings, then you may have to conduct the viewing for yourself.
Choosing between online agents and traditional agents
The online agency eMoov has published a helpful guide for vendors to decide which online house sales service they would like, whether it’s traditional or an online offering.
There’s no doubt there are good and bad estate agents working today, and while the best will find a buyer at the highest price for your home, the worst agent will price your home higher to attract you as a client and then be unable to find a buyer.
However, the issue of deciding between the two types of agent has become clouded with the rising popularity of online agents and that’s the choice of a hybrid estate agency. These tend to be a high street agent that offers a cheaper, fee-based service to attract those vendors who may be tempted to use an online agency.
Whichever agency you choose, these tips of selecting either a traditional high street or an online estate agency will prove useful:
- Reviews. Always check reviews from previous clients and there are several sites available for this purpose.
- Read the small print. Read everything your agent gives you, particularly the small print. Also, opt for a free no obligation valuation from an agent and then use this to compare with your own research.
- Know what you pay for. You should thoroughly check the website of a potential agent and also visit other sites, such as Which? to ensure that you get what you are paying for.
- Quality. Regardless of the online agent’s fee, or the commission from an agent, it’s the quality of their service that the vendor should use to make the final decision. Check whether there are any hidden charges or questionable tactics and whether you will be tied into other add-ons including using their own conveyancing service, which may be much more expensive than others are offering.
- Don’t be afraid. Always challenge an estate agent to back-up their valuation and ask for examples of any previous property they have sold like your home and the price that was obtained.
This last point is very important when it comes to anyone considering using online estate agents versus high street agents and – as highlighted in this article – you’ll need to build up a rapport with someone selling your home to get the price you want to achieve.
Don’t be blinded by an agent’s promises of obtaining a higher price and a quick sale since you need to trust the agent to handle your property sale in a professional way.
There should also be someone you can contact to discuss issues and problems and be reassured that you are not wasting time and money with an offering that fails to deliver.
For more help and advice about deciding between using an online estate agent or a traditional high street offering, the Property Road website has lots of information and resources to help you.