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?
We’ve used both online agents and high street ones to sell our previous homes. Using our first-hand experience, 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.
Often, online estate agents will charge a fixed fee to sell your home. If you’re willing to pay upfront, you could pay less than £1000.
If you prefer to pay on completion so there’s less risk, you’ll be looking at paying around £2,000 with an online estate agent. This is a significant saving for most people verses the percentage based fees high street estate agents charge.
When we sold our last property, we had quotes from both online estate agents and from high street estate agents. The high street agents all quoted around 1.5-2% (around £4500-£5500), whereas the online estate agents were priced at less than half of that.
The only real difference other than the price was that we had to do our own viewings with the online agent. However, for us, that wasn’t a problem. In fact, we preferred it as we knew we could ‘sell’ our home better since we had experience of living there!
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
Other than the potential to save a lot of money, there are other benefits to using an online estate agent beyond money…
24/7 Listing Access
Since the Internet never sleeps, home sellers can manage their own selling process when they want to. Many online ones offer a dashboard which acts as their personal agent and means they are a ‘virtual estate agent’.
We had this when we used Yopa and were able to accept viewing requests and even exchange messages with potential buyers at any time that was convenient to us. We found this much more preferable to having to wait until we could call our estate agent to pass a message on.
Online agents may also offer a contact centre, so there’s always someone to speak to even if your local property agent isn’t available.
When we sold via Yopa, our local property agent was very responsive even on evenings and weekends. This is very different to our experience with high street agents who tend to turn their phone off as soon as 5pm arrives.
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 agencies if you want to.
Having discussed the pros of using online agencies, it’s also worth appreciating that there are some downsides. They include:
To get the best possible price from an online estate agent, you might have to agree to pay the fee upfront, meaning that you’ll be paying even if you don’t manage to sell your property.
While many do now offer ‘no sale, no fee’ options, that will usually cost you more (though it’s still usually much less than high street estate agents) and some do not offer it at all.
When we sold with an online agent, we were able to take a ‘pay on completion’ option so it wasn’t an issue for us.
Extras add up
The online estate agent may have a flat fee but there can be extras to add on that push the price up. For instance, most online estate agents do not include hosted viewings in their cheapest fee. You may also have to pay extra for floor plans or For Sale boards depending which one you choose.
However, we have found that most of the more reputable online agents offer most of the key services you’ll need, even in their cheapest package.
If you’ve sold with a high street agent previously you’ll be used to the idea that the estate agent will show people around your home. However, with online agents, it’s usually assumed that you as the homeowner will do this.
The larger online estate agents will offer hosted viewings as a service, but it will usually cost you extra to add it on, sometimes as much as £500 or more.
When we sold with an online agent, we wanted to do all our viewings ourselves as we knew we were good at it.
When we sold our first home through a high street estate agent, we did some viewings ourselves and the estate agent did some for us. We got offers from everyone we showed around, yet none of the estate agent hosted viewings resulted in an offer.
We put this down to the fact that, as we lived in the property, we knew what the best bits were and could explain to people what it was actually like to live there. This made all the difference and we’d encourage you to try hosting your own viewings when possible. We even found we enjoyed doing them!
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.
Though we should add at this stage is that our own research indicates that most online agents now provide a very similar level of service to high street agents.
- 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.
Again, while a lack of local knowledge may be an issue with smaller online estate agents, most larger firms like Yopa and Purplebricks have a nationwide team of local property agents. That means they operate in a very similar way to high street agents and have comparable knowledge levels.
In fact, when we had valuations from online and high street agents, it was the online agents that demonstrated the most knowledge to us, not the high street ones!
- 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.”
However, there is no strong evidence that high street agents are able to achieve higher sale prices than online ones.
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 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
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 agencies and that’s the choice of a hybrid estate agency.
These tend to be estate agents that offer a full traditional service alongside a cheaper, fee-based package 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.
When we sold our first home using a high street estate agent we felt like we got a really good service and we achieved a fast sale, however, we were always unsure whether we could have got more for the property.
However, we had no such regrets when we used an online estate agent. The fee was much cheaper than the high street estate agents we had value our property and the online agent valued our property the same as the high street ones.
We enjoyed the flexibility to arrange viewings directly with potential buyers and the fact we could easily communicate with our local property agent on evenings and weekends.
We felt the support after we agreed our sale could have been better, though in fairness we were only just coming out of the pandemic and so the service levels weren’t at their usual level. Overall, we wouldn’t hesitate to use an online estate agent again if (and when!) we decide to move again.
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.