The recent stamp duty cut has given the housing market a boost and months of pent up demand may now finally be released.
Estate agents are no doubt chomping at the bit to usher in a new rush of customers, none less so than the online agents such as PurpleBricks and Yopa, which have grown in popularity over the past few years.
And with people more inclined to stay indoors these days, an agent that you don’t have to meet face-to-face in a high street branch may seem more appealing than ever – especially as most charge a flat fee that can be as low as £99 rather than take commission that can be several thousands of pounds.
Is it better to use a traditional agent, perhaps at a higher cost, to get a better deal?
But is using an online estate agent when selling a home a false economy, or is it better to use a traditional agent, albeit at a higher cost, to get a better deal?
We take a look at the pros and cons of going online, and what you need to look out for when using an online agent.
What’s the difference?
There are a few key differences between online and traditional agents to bear in mind when selling your home.
A traditional high street agent will charge you only if you sell, whereas an online agent’s fixed fee often needs to be paid whether you sell or not and could be needed upfront.
Some offer the chance to pay later, but watch out as this may require signing up to a credit agreement.
Fees can vary from £99 with agents such as Doorsteps or 99Home, to £999 with better known firms like Purple Bricks or Yopa.
Others meanwhile don’t charge anything at all, but instead earn their money from third party companies.
For example web-based Strike, formerly House Simple, offers a free-of-charge service in the North of England which allows movers to sell their homes without paying any commission.
The types of service that all of these agents offer vary substantially. Some offer simply to list your property, while others will deal with viewings and negotiations as a traditional high street estate agent would.
If you are thinking of using an online agent, double check on their website the exact service they offer.
Also pay particular attention to the quality of their photographs and floor plans. These are vital in attracting buyers browsing online – especially now that many buyers opt to view a property virtually before seeing it for themselves.
|Agent||Fee||Average percentage of asking price achieved|
|Source: This is Money / Homeowners Alliance for % asking price achieved|
Angela Kerr from Homeowners Alliance said: ‘We would always recommend speaking to a few high street agents to compare packages with the online ones.
‘It’s also helpful to get a few local agents giving a valuation of your property, as the online agents may lack knowledge of your local housing market.
‘Online estate agents are a great option for people worried about costs, which could be most people right now, as they are almost always cheaper.’
Make sure they’re offering virtual viewings
The Government lifted its ban on viewing properties back in May but ‘virtual’ viewings remain a key component of the Ministry of Housing’s guidelines.
Lots of estate agents are now offering these viewings, which give prospective buyers a video tour of the property.
The Government says that people should use virtual viewings before visiting properties in person where possible, in order to minimise the risk of spreading coronavirus.
How much people are actually following this is a matter of debate.
However, the coronavirus viewing rules take up time and mean agents can do fewer physical viewings in a day.
It’s likely that these measures will remain in place for the foreseeable future.
Despite their rise, online estate agents still only have a small share of the overall market
What are the downsides?
Despite their rise, online estate agents still only have a small share of the overall market. Supporters of the traditional high street agent will tell you that this is because there are significant downsides.
Some claim that the problem with a fixed fee upfront is that there is no incentive for the agent to sell your house – they’ve already been paid. You’re basically paying someone to list your home, not sell it, and this is a gamble.
Other agents will tell you that it is their local knowledge and years of experience that you are paying for.
They may suggest that they have a list of interested buyers, know the right levers to pull to get your home sold, and are better placed to get the sale all the way through to the all important completion.
On the flipside, almost everyone who has ever bought a home will know that not all estate agents are good.
The thing to balance is whether you think a high street agent will get you a higher price that outweighs the extra money that you will pay them.
And if you do opt for a high street agent, negotiate on the fee – and potentially even ask to cap it.
Is it worth taking a punt?
Some online agents are offering their services for free, while others are extremely cheap compared to traditional agents.
Former RICS chairman Jeremy Leaf
With this in mind, is it worth trying out an online agent, in the knowledge that you can always go to a traditional agent if it doesn’t work out?
Jeremy Leaf, estate agent and a former RICS residential chairman, warns that this could backfire if your initial listing isn’t priced correctly.
He said: ’The problem of marketing your home with an online agent for a low fixed fee before switching to more traditional route is that you lose market advantage if your property is priced wrongly. It will not be taken as seriously when you remarket it.
‘Our experience is that those who overprice from the outset nearly always have to reduce their price to a level even lower than the traditional agent suggested originally to achieve a sale.’
Angela Kerr from Homeowners Alliance said: ‘To access the best deals with online estate agents you usually need to pay upfront, so it’s not really something you should just have a punt on as you won’t get your £99 back if you don’t sell.’
What different services are on offer?
Each agent offers a slightly different service so it’s best to do your research before picking one.
Yopa for example offers a dedicated local agent and listings on Rightmove and Zoopla, with professional photographs and adverts, a for sale board, and online dashboard.
Aimed at those who find the idea of a full-on DIY sale a little daunting, Yopa assigns a local agent to sellers for face-to-face valuations and help with negotiations. If you want them to do viewings it will cost £300 extra however.
When it comes to the bill you can pay upfront or after selling. Yopa markets your property until it sells but you pay after six months if it hasn’t been sold by then.
Purple Bricks is the most famous online agent after a mostly successful marketing drive. It was launched in 2014 by Northern Irish brothers Michael and Kenny Bruce as ‘the first 24-hour estate agent’.
Purple Bricks puts you in touch with a local property expert who gives you a valuation and gets professional photos of your house and details arranged.
Each agent offers a slightly different service so it’s best to do your research before picking one
For an extra £300 – or £399 in London – Purple Bricks will conduct viewings for you.
You get a dashboard on their website where you can track viewings and listings on all the top portals. Unlike some online agents, which can cancel listings after a certain time, Purple Bricks markets your property until it sells.
After the deal is done you get a post-sales team contact to help you all the way to completion.
Doorsteps is one of the cheapest of the online agents, offering a valuation and marketing on hundreds of websites including Rightmove and Zoopla for just £99.
Most sellers will need the £199 package which includes photos and floor-plans but this is still far cheaper than the other agents.
A big plus is that they keep all properties online until they are sold – which the site claims takes 16 days on average. Purple Bricks and Yopa also offer this.
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