Are Online Estate Agents Good Value

Do you actually know how much it will cost to sell your property by using an estate agent? A recent survey carried out by Low cost estate agents showed 32% though estate agents charged 1.5%, 45% thought 1% while 12% though 2% and 11% though something different.

In the same survey a whopping 68% thought estate agents actually charged too much. One other question asked 104 recent buyers of property if they had actually walked into the estate agents office that sold them the property. Only 4 of these buyers ever visited the office that was selling the property they bought. Well known statistics show over 90% of buyers looking to buy property use the net [/spin} as their first starting place. So if [spin] no one actually walks into high street estate agents these days, do estate agents need to be there?

More and more estate agents seem to be moving their operations online and taking their office off the high street and you can understand why. An average shop on a UK high street can easily cost over £100,000 per annum in rent and rates alone. Add on top of that staff wage, cars, etc a high street office can cost £300,000 to run. So a high street agent has to pull in £300,000 just to break even.

You have to remember that English and Scottish estate agent work on a different basis. The vast majority of English estate agents carry out all the viewings on all the properties they are selling, while in Scotland an estimated 85% of sellers do the viewings. Estate Agents in England tend to charge more that their Scottish counterparts but as they probably do more work that is understandable. Certainly in England online estate agency has taken off faster than in Scotland.

So if 90% of buyers look online first if very few buyers ever visit an estate agency office, why do we need agents on every high street? Some established estate agents in Scotland are now moving off the high street and online like Traditional estate agents will argue that they have the local knowledge and have a large list of local buyers. But if this was the case they would sell every property in under a week and we know they don’t. Having a high street office is now really a high priced marketing tool and this means estate agency fees on the high street will still average about £2,000. Online agents by and large make a one off charge of hundreds of pounds and this is paid upfront.

What about private for sale websites that you can sell your property for at nor cost on? Probably the best known is Channel 4 property Guru Sarah Beeney’s website topilo and this has thousands of private seller’s properties on it. There are many more out there. The issue here is as these sites make no charge there is no marketing budget to advertise their sites and they remain very much anonymous amongst property buyers out there. If internet users have never heard of your site they will never visit it and therefore the private seller will not sell their property.

The arrival of the huge property portals like rightmove, prime location and zoopla who between them have over 2 million properties for sale, means that they can spend a million pounds on brand awareness. They make sure purchasers know their websites are the places to look for property in the UK. These websites are only open to estate agents, so private sites are not able to advertise on them. Online estate agents and traditional high street agents spend thousands of pounds advertising with portals.

So will online estate agents conquer the world or will high street agents continue to have 95% of the market? Certainly there is more awareness of online estate agents and in Scotland Home Reports providers are also moving online to lower costs. In my view it will take numerous years for the online estate agent to be king but with the market in the UK being subdued for the next few years, more and more experienced agents will more off the high street and online.

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