With the rise of new estate agency models we did a deep dive into how do Online estate agents work? We investigated the different types of estate agents here.
When it comes to selling your home, there are a few different routes that you can take. You could hire a local estate agent to market and sell your home for you. Tech enabled estate agent models have been threatening to make traditional estate agents redundant for the last decade. It’s proving much more difficult for them to achieve than they’d like to admit so lets dig into what an online estate agent is and how they work.
If you’re thinking of using an online estate agent, you may be wondering how they work. How involved will they be in the process? Will they handle all of the marketing and advertising for you, or will you have to do some of it yourself? And most importantly, are they any good?
In this article, we’ll take a look at how online estate agencies work and what you can expect from them.
What to expect when you instruct an online estate agent
When you use an online estate agent, expect to typically sign up to a fixed-term contract. This could be for six months, twelve months, or even longer. During this time, the agent will list your home on their website and any other relevant property portals.
That may be the most they do without you paying more. You can expect to pick up most of the labour intensive and administrative tasks like writing a description or taking photos. Both of these are incredibly important parts of the sale so ensure that you are confident with this.
If you receive an offer on your property, it will be passed over to you to decide whether or not to accept it. Once you’ve accepted an offer, the online estate agent will then help to coordinate the sale and manage the paperwork involved.
Advantages of using an online agent
One of the biggest advantages of using an online estate agent is, that they typically charge less than traditional high street agents. This is because they have lower overheads and don’t need to pay for things like office space and staff. But remember, the cost of a traditional agent is taken out of the final selling fee whereas the online models typically charge upfront regardless of completion. It means that although cheaper, it may not necessarily be cheap if they end up doing a bad job and you have to switch to another agent.
Another advantage is that you’re in control of how much or how little to be involved in the sale process. If you’re happy to do your own marketing and advertising, you can save even more money whereas traditional agents are less flexible because they are experts at what they do.
List of the advantages of using an online estate agent
– They’re usually cheaper than high street agents although are starting to match the traditional costs as they realise that the model isn’t too profitable
– They’ll list your property on all the major property portals such as Rightmove and Zoopla.
Disadvantages of using an online agent
Of course, there are disadvantages to using an online estate agent as well. One is that you won’t have the same level of service or support that you would from a traditional agent which can be stressful during what is an already stressful time.
An agent removes that personal element between you and the buyer. Selling a house is an incredibly personal process so prepare for a buyer to be quite brutally honest to negotiate a better price.
An online estate agent has no incentive to sell your home if you pay them a lower fixed fee upfront. One in three house sales fall through so if you pay £999 upfront, the actual risk weighted cost is more like £1,500. Due to the probability of fall through – then you have to find a new agent and you may have done irreversible damage by listing your property too high or too low.
Listing your property at a lower price than it’s worth is a tactic that some have found online agents employ just to ‘shift’ the house quickly. Remember they don’t derive a commission so their fee isn’t house price linked which creates a disincentive.
List of the disadvantages of using an online estate agent
– You won’t have the same level of service or support that you would from a traditional agent
– It can take longer to sell your property if you’re not using a well-known online agent
– There is no incentive to sell your property if you pay a fixed fee upfront.
So how do they work?
Valuation
The first step in selling is to get a valuation. This estimation will help you understand what asking price you should set your home at. Online estate agents give you a valuation purely based on data found on the internet. They do not come and physically look at your home and the condition it is in. They will look at what price homes in your area have sold for in the past, what price homes are on sale for now and the local property market to get an estimation.
The problem with this method of getting a valuation is it might not be reliable. This is because not all homes in your area will be like yours. For example, the overall condition of your home might be better, or you have added features such as an extra bedroom or a conservatory which will add more value to your home. Also, the agent is likely not local to your area, so they won’t know school and transport you have in your area which could effect the estimation. Therefore, it is hard to get an accurate valuation without a local agent coming to look at your home.
To read more into valuations, read our blog post here ‘A guide on how to get your home valued’.
Marketing
Online estate agent marketing is more basic than using a high street agent. The main marketing they will do is creating the advert and description of your home to put on property portals. Some, online agents will take photographs to market your home. However, a lot of the time this isn’t included and you will pay extra. So, be sure to check with the agent what is included in the marketing.
Viewings
If you sell through an online agent there is a chance you will have to conduct viewings of your home yourself. You need to make sure you are comfortable showing potential buyers around your home and be ready to answer any questions they have.
If you are looking for a more hands on approach and you want to show your home off to buyers online agents are for you.
What experience can you expect from an online estate agent?
The experience customers have with an online only estate agent can vary greatly depending on the company. Some companies are very reliable and experienced in the industry, others are new to the market and still learning the ropes.
Generally, the feedback for online estate agents is mixed. Customers appreciate the convenience and affordability of working with an online agent, but transactions sometimes don’t go as smoothly as working with a local independent estate agent who is incentivised to get the best deal for you.
Will an online estate agent get me the best price for my home?
This is a difficult question to answer. It depends on a variety of factors specific to your property and the market. Generally speaking, online estate agents are able to offer lower fees than traditional high street agents, which can save you money on your estate agent fee.
However, it’s important to remember that an online agent may not have the same level of local expertise and knowledge that a high street agent can offer. So, they may not be as effective in getting you the best price for your home. They do not earn commission for getting the best price on your home so there is a genuine agency problem.
Do your research before choosing an agent to make sure you’re getting the best possible value for your money.
Independent estate agents are typically more consistent in terms of the service they offer and the prices they charge. Because they’re not tied to a specific company, these agents offer a wider range of services and pricing options. This gives you more flexibility when choosing an agent.
Local independent estate agents have more local knowledge and expertise than online estate agents. This can be helpful in getting the best price for your home. Overall, independent estate agents offer a more personalised experience and tend to have a higher success rate than online-only agents. If you’re looking for an agent who will work hard to get you the best deal for your property, it’s worth considering an independent agent in your area.
