Are online estate agents a good option for house sellers on a budget…and in a hurry?
The internet and property were made for each other, for sure. The increasing popularity of house-owners selling privately is not dissatisfaction with traditional estate agents, as media pundits would have you believe, but something more profound: More people have easy access to the tools to make a private house sale viable. And the tools required are not much more than an internet connection and a digital camera. The barriers that prevented large numbers of people from seriously contemplating a private sale simply no longer exist. Perhaps some estate agents didn’t see it coming.
What is an online estate agent?
Somewhere between the two options are online estate agents. The internet has opened up more opportunities for both house sellers and property professionals alike. But do online estate agents really offer a viable alternative for house sellers looking for a cheaper option than traditional agents but not prepared to go it entirely alone? And equally important, will it get you a quick house sale?
An agent describing themselves as an online estate agent is typically characterised by two things:
the absence of a network of branches
they compete on the basis of a price advantage
To some extent all estate agents are now ‘online estate agents’. Many of the smaller independent estate agents with perhaps only one or two branches will describe themselves as ‘internet based’. This is because the smaller independents have been able to extend their ‘geographic reach’ while keeping a small number of branches.
Many of these independent estate agents are very competitive on fees. In our neck of the woods
1stavenue is a good example of this kind of approach.
Many independents also realised quite quickly they don’t need a high street presence to thrive. In some areas of the country, where property is in short supply, these flexible businesses are well placed to thrive. Many of the web sites operated by independent estate agents are at least on an equal footing with the high street and in many cases, easier to navigate. And finding estate agents online has never been easier.
Meanwhile traditional high street chains are left to compete on branding and service…and some do it well but in very competitive markets, life is tough.
The hidden benefit of online estate agents
Online estate agents are not always directly comparable with traditional estate agents. Depending on the exact nature of the service you choose you might have to do a bit more work if you take this option. For example, you may have to conduct viewings although you won’t necessarily have to arrange the viewings. In our book, an online estate agent should really be operating a full service to qualify as an ‘estate agent'. Different online estate agents work in different ways.
One big advantage we can see from the seller’s perspective is that if you go the online route the agent doesn’t have to try to win your custom by being over zealous with estimates of a suitable asking price.
In fact one leading online estate agent we spoke to, Housenetwork, actually provides data from Hometrack after they have made a site visit. This we like. Valuations grounded in a sensible methodology. While another leading light of the online estate agents, Halfapercent operates in a more limited geographic area so you can have more face to face time if that’s important to you.
Will an online estate agent deliver a quick sale?
To some extent ‘you pays your money and takes your choice’. Some people are simply ‘high street shoppers’. Others aren’t cut out for selling privately because they won't make the effort or won't be realistic.
Our advice is that if you go the online estate agent route make sure it is ‘full service’ in the sense that the agent will handle everything from marketing through to negotiations with buyers and beyond.
In practice this means at least compliance with the Estate Agency Act 1979. And as with any agent make sure that they are members of the requisite professional bodies such as the NAEA and the Ombudsman Scheme. Between 50%-60% of estate agents are currently members of the Scheme. For this kind of service expect to pay in the region of 0.5% plus VAT although some online agents like Housenetwork has more than one pricing option.
You also need to assess whether your house is a suitable candidate for some types of online service. In our view prestige properties or properties which might be tricky to sell for one reason or another are better suited to estate agents who are close to hand whether that's high street or internet based. But with sufficient effort on your part anything really is possible.
Using an online estate agent to get a quick sale
Don't turn picking an online estate agent into a false economy. Just like other ways of selling your house you need to do your homework.
This means you still need to make an assessment of whether it’s a viable option for your property. Just as we advise with traditional estate agents, and property web sites for selling privately, you need to evaluate whether the service is geared to delivering within your timeframe.
Good questions to start with are:
How much traffic does their web site deliver in terms of unique visitors? Can they break that down by location?
Where else will your property details be listed e.g. will it appear on Rightmove?
How long does it take to sell a property like yours in your area?
How proactive will they be on your behalf?
Are you free to use other selling options alongside theirs?
Would they have sole selling rights?
Do they keep a database of current buyers? How do they qualify buyers?
What is their approach to valuations?
How flexible can they be with how your listing is presented on their website?
Getting a quick, hassle free sale isn’t just about having the right ‘shop window’ but has just as much, if not more, to do with active promotion, thorough qualification of buyers and first-class negotiation. And for that you need to make certain someone is ‘on the case’ throughout.