The cat’s out of the bag when it comes to online only estate agents
Stockbrokers Jeffries have released some research into a leading online only estate agent that confirms what proper estate agents have been saying for some time.
Jeffries estimate that online only estate agents sell as little as 50% of their listings compared to traditional estate agents who tend to sell about 80% of their properties. This is only of any importance because traditional estate agents only ask you to pay them if they achieve a sale, whereas online only estate agents will take your money whether they sell your house or not.
The online model has been with us for as long as the internet so this low-cost estate agency business model is nothing new. What is new is the amount of money being spent on nationwide television advertising. As a consequence, the Advertising Standards Authority have taken more interest in the leading players in this sector of the market. In fact the big players who advertise regularly are very well acquainted with the ASA who have wrapped them over the knuckles repeatedly for misleading consumers, firstly into thinking that they won’t pay for the service on offer, and secondly for overstating the savings consumers can make by using online only services over the traditional model.
The BBC’s Watchdog programme has also featured several online agents pointing out that their Local Property Agents are in fact commission only salesmen and not full-time employees of the agent at all. What’s more Watchdog criticised online only agents for training their Local Property Agents to exaggerate the number of listings they have in each area and the proportion of these properties that they actually sell.
As there is rarely any smoke without fire, I think it’s fair to say that Jeffries, the ASA and the BBC can’t all be wrong about online only estate agents. There is something very fishy about asking a call centre in Milton Keynes or Solihull to sell your house when you could use an established local business who might charge you a few hundred pounds more to sell your house but is more likely to sell your property and achieve a better price.