Opinion: are high street estate agents a waste of money?
With more and more online agents popping up, we explore whether or not traditional estate agents are still valuable in today's market.
When you next come to sell your home, will you use a traditional estate agent and pay a hefty fee?
Perhaps you would consider listing your property via one of the many online estate agents that have recently sprung up. They charge a fraction of the price it but means you may have to do the marketing yourself.
It’s a pertinent question because the house selling market is undergoing a seismic shift. Recent research carried out by netanagent.com, an estate agent comparison website, reveals that nearly a third of homeowners view estate agents as ‘poor value for money’, while 85% of people would consider using an online agent to sell their home.
While traditional estate agents typically charge anywhere between 0.75% and 3.5%, online DIY estate agents can charge fees as low as £395, no matter what price the property eventually sells for. Some charge much more, depending on the amount of support the seller requires.
However, with a vast and growing number of websites to choose between, increasing numbers of sellers are opting to do it themselves.
Alex Thorpe, netanagent.com managing director, says: “Estate agents have often come under the cosh in the past and are an easy target for consumers who think they aren’t getting value for money as part of one of the biggest sales or purchasing decisions they will ever make.
“With more savvy consumers who are willing to shop around and the rise of online estate agents enabling sellers to do more themselves, the pressure is really on to show people that they are getting value for money.”
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‘Take the stress out of the process’
The HomeOwners Alliance has long campaigned for the reform of high street estate agents, accusing some of being opaque, charging a large amount of money and sometimes having a “scant acquaintance with truth”.
Yet it argues that buyers and sellers genuinely need estate agents to provide information and expertise.
A spokesperson said: “If you are new to an area, they can give you the local inside knowledge – which is the right side of the street in the right neighbourhood for people like you.
“If you like browsing the local properties, you can look through their windows. If you’re keen on the area, you can register with local estate agents and get them to give you a call to tip you off about properties before they come onto the market. If you are a first time seller, they can hold your hand to take the stress out of the process.
“If you want to sell your house without everyone knowing, they can put it in for a discreet sale, matching it with those they know are looking in the area. They are the only ones who can cause a local buying frenzy by having an open house.”
Of course, some of those benefits can be recreated with the internet. It’s possible to check nearby schools and their performances via Rightmove and Zoopla; to discover more about neighbourhoods online before you browse homes there; and to register for alerts as soon as relevant properties are advertised.
However, that industry knowledge and local expertise potentially can’t be recreated. Nor can the value of the work estate agents do to keep a sale on track and moving forwards, often liaising with both parties to ensure everything runs smoothly.
Yet many people are prepared to abandon that in favour of going it alone and potentially saving thousands.
‘Had it too good for too long’
Property guru Sarah Beeny launched online estate agent Tepilo.com and argues that online agents have a definite place alongside the traditional alternatives:
“98% of all property searches now begin online, so that's where you need to be,” she argues.
“Traditional estate agents can work well, but they charge a percentage fee for a sale rather than the lower, fixed fee of online agents.”
Michael Bruce, CEO of Purplebricks, says that the increased competition can only be good for homebuyers. He comments: “Traditional high street estate agents have had it too good for too long.
In 2000, the launch of Rightmove and Zoopla changed the way that people looked for property forever, but for those actually paying the estate agents’ bills, the sellers, there was still much room for improvement, both in terms of process and cost. A hybrid approach, combining people and technology, was well overdue and it massively benefits consumers because it’s a more convenient, transparent and fairer way to buy, sell or let property, 24/7.
“The hybrid business model is very successful – we’re proof of that, we have an average Trustpilot rating of 9.4/10 from over 11,000 reviews – and it is here to stay. That doesn’t necessarily mean the death of the high street, it just means that consumers have more choices, which can only be a good thing.”
Room for improvement
Perhaps our willingness to abandon traditional estate agents in favour of online selling platforms like Purplebricks and Tepilo is because we do not actually understand the level of work involved in effectively marketing a property and getting the best price for it.
Netanagent.com’s Alex Thorpe says: “What’s clear from our research is that homeowners don’t necessarily understand the sheer amount of work that goes into selling a property.
“From local knowledge and an understanding of the marketplace, to an awareness of what a target audience is looking for and an understanding of how best to promote property, estate agents work very hard for their fee to deliver the best price for homeowners.
There is a real need for estate agents to better promote the value they can bring consumers, so sellers can truly understand the best estate agent for their needs.”
Maybe we do still need estate agents, maybe the slow-moving housing market would grind to a near halt without experienced, knowledgeable professionals chivvying it along. But if estate agents don’t start doing more to actively demonstrate their worth then the industry faces even greater disruption and, ultimately, the risk of being superseded by online alternatives.
What do you think? Have your say using the comments below.
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