Those who have sold a residential property recently may have noticed an alternative to their regular realtor when searching for the best companies to go with. This alternative is the online real estate agency – and that means no physical location or window shopping. Queue mass uncertainty.
We are split in the Elevation office about which is better, online or traditional. And mostly, when working out the pros and cons, it is a little of column A, a little of column B. They both have their benefits. But today, we’ll focus on why online real estate agencies can be beneficial.
Firstly, let’s take their nature into account. For someone to visit a property on an online portal (in the UK this would usually be Rightmove or Zoopla) then they must have some sort of intent already. Whether they are just seeing what is available, or looking to buy, they are one step further than the opportunist at the shop window of a traditional estate agency.
But since traditional agencies can also place a property on these portals, the benefit of using an online agent is lost. So why are people turning to these online companies in droves?
In a word. Fees. Yes, it comes down to money, as always. An online business can break the mould. Not only do they have fewer overheads, but an online business can be set up for very little, experiment with new business models, and pivot at a moment’s notice. This reduces their costs – by improving profit margins and reducing overheads, they can help customers by charging less. See a full list of what they charge on Which?.
Take Purple Bricks, the industry leader in the UK, for example. They charge a flat fee of £798 or £1,158 in central London. Seriously – just £1,158 in central London, for any size property! This is a hell of a saving, and can mean £10,000s in savings for customers. Of course, you are relying solely on online traffic, and forgoing the local knowledge and the customer base of traditional agents, so we’re betting the sales may take longer in less demand driven areas.
In addition, you do not have the benefit of an experienced valuer who visits your home and can give an accurate assessment of market value. Traditional agencies will also take care of the photography and the required EPC ratings. They are also on hand for qualified advice and help with the subsequent negotiation process. In all, that’s a lot to lose.
But there are companies that merge the two practices. EweMove, for example, is an online agency that uses the traditional percentage fee model, but with a lower fee than most traditional agents charge. For this, you get premium listings in major online portals, as well as local advertising in the area for which the property is sold in.
So, while the benefits are debatable – lower fees, but perhaps less local knowledge, help and qualified advice, we fully expect this industry to continue disrupting the property selling industry. What do you think? Let us know on Twitter @ElevationComms.