How do online estate agents work? Are they worth the money?
The ‘online estate agents VS high street’ debate is a hot topic in 2021, not just amongst buyers, but agents too.
Ask a high street agent to justify why you should sell through them opposed to an online agent, and this will become apparent. You’ll see a fire ignite in the agent’s eyes, as the thought of proceedable buyer taking their business online causes their blood to boil. Almost instantly, subtle insults will start to fly, various claims will be tactically weaved into the conversation, fingers may even be pointed – the lot, as the agent slips on their boxing gloves on and prepares to fight their corner (Ching! Ching!)
Pose the same question to an online agent (but in reverse) and you’ll likely be met with a similar response. Although, their tactics may differ. Your typical online agent will be far less defensive, and in some cases may even laugh off the thought of any high street competition. Being a large corporate company may have something to do with it, as well as the fact online agencies are witnessing record levels of growth. Today everyone's chasing convenience, so in their eyes, they already have the upper hand.
Or do they? Are online estate agents really the future? Or is the entire estate agency model outdated and in need of a refresh? We spill the beans…
Looking to compare online agents against the high street? Or just searching for something specific about the difference between the two? Find the info you need FAST by using the menu below…
- What are online estate agents?
- What is a hybrid estate agent?
- How do I choose an estate agent?
- Online estate agents VS high street - which is best?
- Are estate agents worth the money?
- Are estate agents even the way to go in 2021?
Online estate agents are nothing new - they're just traditional estate agents, who wear a slightly different hat. Their aim is still very much the same: sell your house in the quickest time for the highest price. As is their process, which is essentially a carbon copy of the 'hands off' approach used by the high street, only with a few DIY requirements factored in for sellers. Not that it's put them off though.
In fact, the concept of online estate agency has grown significantly since online property portals saw a spurt in popularity during the early 2000s. By 2010, a whopping 80-90% of properties were discovered via the internet, hence the swift migration of estate agency services online... it's the way the world's going.
Online OR high street? We're neither... we'll buy your house in 7 days!
Unsure who online estate agents are in 2021? Here's a few of the most popular...
Before you gallop on into the world of online estate agents, hold your horses. Online agents aren't as clear cut as you'd imagine. There's another breed that you need to be aware of before you get all wrapped up in the 'Online Estate Agents VS High Street' debate.
Hybrid estate agents are essentially a crossover between the two. They're an online estate agent in the sense that they operate online and market properties purely online. However what makes them different is that they offer services that the high street agent would offer too, like viewing support from a property 'professional'. But, don't be fooled - hybrid estate agents come in more than one type.
The first, and most obvious form of hybrid agent, is an online estate agency which has decided to go a bit off-script and offer customers a slightly more personalised service. A privilege that will usually come at a cost, so read up on the Ts & Cs before you sign anything!
The second being a high street agent, who decides that evolving away from a shopfront is a wise idea. So basically a home-based agent. A ever more popular business model, as many agents look to escape the high rents of city centres in an effort to lower their expenses. It's also worth bearing in mind that what with all the working from home caused by COVID, as well as the success of virtual viewings, that becoming a hybrid estate agent is more viable than it ever has been.
There’s over 20 thousand estate agents in the UK, so narrowing that down to just one is no easy task. Especially when no two agents are the same, and online estate agents have added yet another realm of possibility into the mix. In an ideal world you need to whittle this down fast, and be able to spot that golden agent who’s going to get you the best price. So, to assist you on your quest, here’s five tips for when choosing an estate agent, be they high street or online…
Go undercover – Agents can be characters to say the least, so covertly investigating how they work before entrusting them with the job of selling your house, is a wise move. Gain an insight into how they operate and you can be reasonably confident of choosing the best route. Now of course undercover is a broad term, so naturally you have a few options at your disposal.
Phoning in and impersonating a buyer would be one of the easiest. Do so and you should get a real feel for how the agent operates and be able to gauge how they interact with customers. Ask them specifics about their current stock if you want to test their knowledge. Quiz them on parts of their service and if you're feeling brave, ask about offers and see how they react. Do they disclose what a seller would accept and side with you as a buyer? If so, they might not be out to get ‘you’ the best price after all.
FYI: Also, don’t forget to subscribe to the agent’s mailing list. While it may clog up your emails, it'll give you a real sense of how your property will be marketed. How often will it be pushed out? Will it land under the nose of the right buyers? If the answer to these is 'once in a blue moon' and 'nope', then we'd suggest you move on.
Quiz them on a valuation - When it comes to instructing an agent, be they online or high street, you need to be clear on what you’re getting in return. The absolute last thing you want is to instruct an agent only to find that by probing them slightly more you’d have realised that they’re not actually the agent for you.
At the end of the day you have to remember that agents are salespeople. So while they’re out to sell your property, their intention isn’t always for you to achieve the best price. In some cases they may know that your property won’t be popular with buyers, but will kid you into thinking that it will be just so you sign their contract. Not that speed bumps like this aren't something you can avoid by asking the right questions.
Want to know what these questions are? Here’s 30 questions to ask an estate agent when selling.
Online agents are good... but we're better. We'll buy your house for CASH!
Read up on their rep - Don’t just take an agent’s word for it – ask around and get a feel for their reputation. First and foremost ask for some RECENT testimonials (make sure they’re dated). If they pass the testimonial test, move onto the next step – the online perception test. Sounds complex but it basically means is stick your nose into their online affairs. Is the majority of their online presence positive? Trustpilot and Google reviews are good places to check. It’s likely for online agents especially, that you’ll find uncover quite a bit about online agents with this method.
And don’t forget, the news can also be a good shout! Poke your nose into a few articles and you may find their CEOs speaking out on the latest property-related issues. An encouraging sign! Or on the flipside, that they’ve got a couple of company secrets that they’re struggling to cover up.
Before taking sides in the ‘Online Estate Agents VS High Street’ debate, you need to be well informed of the pros and indeed the cons of each sales method. Do so and only then can you determine which is right for you, as well as be aware of what to look out for.
Know the shortfalls of each method and you know what to push for when negotiating your sales agreement – i.e. how to eeek the best value out of the agent. Otherwise you run the risk of tying yourself into a bad deal, simply because you weren’t equipped with the right information. So to help you minimise the likelihood of any of these school boy errors, we’ve listed the advantages and disadvantages of online and high street agents below…
Advantages of online estate agents
Are online estate agents any good? Here's a couple of advantages to help you work that out...
- Price - Typically online estate agents come in cheaper than their high street rivals and more than often charge a fixed fee. All of which means the actual cost of selling through them is also more predictable. Handy for budgeting!
- Buyers and influence - Being a large corporate agent they'll likely have access to a larger pool of buyers, or will attract more naturally because of their brand name and reputation. For instance, more buyers are going to search for a household name like Purple Bricks than a lesser known local agent.
- Accessibility - Your typical online estate agency is really easy to get hold of, as they're more than often still available via phone after the typical working hours. Not a perk you'll find many local agents offering, although some may give out their mobiles to bridge this gap.
- You take the reigns - As a customer to an online estate agent, you're in charge of your own sale. So, that means your final sales price isn't influenced by an agent's ulterior motives. If you want to spend a month in negotiations to get the extra £5k, you can do. Something that high street agents will persuade you to avoid. Why? They want their fee... and fast.
Don't have time for online... We'll buy your house in 7 days!! (for CASH)
Disadvantages of online estate agents
Why do online estate agents gets a bad rep? Here's a few reasons to be aware of...
- Type of service - Because you're dealing with a call centre and not an individual office, the service you receive tends to be a lot more impersonal. You may be speaking with a different agent every time you phone up, opposed to a high street agent where you'll usually get to know who you're dealing with not only over the phone, but in person too.
- Fees, fees... fees - While going online does mean you'll pay a good chunk less for an agent, you will usually have to pay their fee up front, despite what you achieve for the property. So that means if you go through an online agent and don't sell, or sell for less than you ideally want, then there's diddy squat you can do about it. Hence why high street agents will tell you that going through an online agent is essentially paying a fee for a board and a property listing... which when you look at it this way, it is.
- Slap dash negotiations - One of the major disadvantages of online estate agents is the negotiation itself. With a traditional agent that's an essential part of what you pay for, as well of course advertising costs, their time etc. Whereas with an online agent, the health of your price all rests on your negotiation nous. If you're not good under pressure, this could be an issue.
- Viewing turmoil - Going online means that instead of having the flexibility of an agent conducting your viewings, you'll be forced to conduct them all yourselves. Not exactly the easiest if you've got a young child or are working on shifts. It's more of a hindrance than anything. Also, this means that you don't have the benefit of them being hosted by a local property professional either.
- Lacking in communication - Opt for the traditional agent and you'll be able to communicate with them in person over the phone. However, with an online estate agent you'll be forced to communicate over the phone or email. The closest you'd maybe get to face-to-face interaction with online agents is a Zoom call.
- Less accurate valuations - Unlike the on high street, online estate agents value your home online. So what this means is that instead of basing their valuation on what your house looks and feels like in the flesh, instead it'll be based purely on data. Data that isn't always correct. In most instances the data used by online agents will be that from when the property was previously sold (i.e. you bought it), so if you've done some serious renovations, lived there a long time or simply neglect to fill them in on every last detail, then they won't be able to accurately assess your property's condition. And as we all know, all it takes is one rogue valuation for you to set an unrealistic asking price, and achieve less than the property's worth. Or even worse, not sell at all.
- Marketing costs - When deciding whether to sell through an online estate agent, marketing costs are also something for you to bear in mind. Opt for a traditional agent and your marketing costs will not only be a one-time cost, but they'll be included in their final fee. Whereas with most online agents, marketing costs are an added extra. They're also something that may be incurred more than once! Marketing support with online agents only usually lasts for a specific period of time - once that's expired you'll then have to pay again. So if you don't sell your house quickly, then you could end up with quite a bill.
Online Estate Agents VS High Street... why ask the question? We'll beat them both...
Advantages of high street agents
Why are high street agents often still regarded as the 'way to go' for many sellers? Discover why they can still be considered viable below...
- Hand holding - Selling a house for the first time can be daunting, especially when complex words like conveyancing get in the way. But if you go through an agent, you'll have your hand held throughout the entire process. Ideal if you're a first time seller. Why does this occur? The fee. While an online agent will demand a fee upfront, high street agents get paid upon completion, so they won't abandon you mid sale; they'll do everything they can to push the sale through to completion. Saying that though, so would a cash buyer, only they'd take just 7 days.
- The local area - Opting for the high street gives you a good chance of reaching buyers in your local area. And as we all know, property sales are a local game. Yes, there's going to be the odd buyer here and there who's looking to relocate from the other side of the country, or even abroad, but when it boils down to it the majority of the fast sales will come from within your local area. Why? Because people know the area better and have more confidence in what they're buying. Typically those who would relocating would be far more hesitant.
- Negotiating you a higher price - Yes, high street agents may charge a fee, but does that mean they're more expensive than their online cousins? Not necessarily. You see, while both online and high street agents will try and sell your house as quick as is humanly possible, the high street has the upper hand in terms of negotiation. Typically online agents will leave this solely in your hands - not ideal if sales isn't exactly your forte. Whereas if you opt for the high street, this would all be done by a seasoned pro, with a keen interest in achieving the best price - especially if they're an independent.
- Local nous - With selling your house quickly being very much a local game, it also pays to hire an agent who's equipped with local knowledge. A quality you're far more likely to find at your local high street agent opposed to with an online agency (cough) call centre.
How to sell your house online privately without estate agents?... Us
Disadvantages of high street agents
Wondering why you shouldn't appoint a high street agent? Here's why doing so could leave you with trust issues...
- Professionalism -While high street agents like to think of themselves as experts in their field, that's not always the case. In fact, it's not uncommon for buyer to ask a question to an agent and get fed the 'I'll ask the vendor' card... in other words, they don't know. So even though the agent may well be clued up when it comes to sales patter, they've forgot one of the first rules of sales: know what you're selling.
- Fake Viewings - Do estate agents use fake viewers? Erm... maybe. For any agent, their stock is precious. The more they have the more prestigious they appear and the greater the chance they have of making a sale... in theory. Hence why some agents on the high street have been known to call in a favour from friends pose a viewers in order to trick you (the seller), into thinking your property's receiving interest when in reality, it's not. Now we're not saying that all agents would do this, far from it, but there's no getting around the fact that using an online estate agent would almost eradicate the possibility of this occurring. Why? The majority don't host viewings - perhaps that's a good thing?
- Over-valuations - Another risk you run by appointing a high street agent is having your house overvalued. By that we mean you being misled into thinking that your house will achieve more on the open market than it actually will. Why an agent would do this is actually pretty simple. At the end of the day, they want to sign their contract, so what better way to do so than to almost complement your house and give you the false hope that you'll achieve a better price with them, than you would with another agent. Do so and you could wind up being stuck on the open market with little interest and having to sell for far less than what the agent led you to believe (gulp)!
- Tight contracts - As hinted at above, contracts are one of the major reasons behind any agent tomfoolery. Reason being that these contracts are usually home to a bunch of hidden clauses. Our favourite is the one that basically says "If you choose to withdraw your property from the market, then you will be obliged to pay a fee of X if you switch to another agent". WARNING: Some agents will try to disguise this withdrawal fee by saying they'll credit it against future business. I.e. use it to tie you into using them in the future, so watch out!
'Low cost' online estate agent turned expensive? We don't charge fees full stop.
Ultimately whether agents are worth the money or not, is purely down to you and your situation.
If guidance and local knowledge are what you're after then high street agents may well be the most viable option. The majority will be well versed on their local area and have a strong idea of the house prices there too - typically something that you won't find with an online agent. A fact that those on the high street will be eager to remind you of. Then again, whether they use this to your or their advantage is something you'd have to gauge for yourself.
Although saying that, high street agents should offer comprehensive guidance and be available to guide you through the sales process 'in person'. And while you could say that's because it's in their best interest, it's still something they have over online agents. A major plus point that they'll love to advertise. So if you're nervous about the prospect of selling, the high street could work out well. Not to say that online agents aren't worth the money, as for some they can be.
Yes, online agents work in more or less the reverse of the high street: they expect you to market your property, conduct the viewings, negotiate the price and so on. But you can't get around that fact that providing you sell fast and are willing to put in the extra effort, that you can save a decent chunk of money by using one. They can also give you access to a larger audience of buyers too.
But in the end, what side you take in the 'Online Estate Agents vs High Street' debate all comes down to what you're looking for in an agent and whether you're looking to sell your property fast.
HINT: If speed is of the essence, read on. There may be a third option...
How good are online estate agents? What does it matter? We'll run rings around them...
No - there are other options, particularly if you're looking to sell your house fast, so don't be too quick to judge. After all, if you're hunting for a fast sale, the open market may not even be the place to go. Open your eyes to other methods of selling and you never know, the answer you've been searching for may have been under your nose all this time. With this in mind, here's a couple of alternatives to estate agents in 2021...
Auctions - If you're after a speedy sale then going to auction might be a good option. Do so and you'll have a 'yes' or 'no' answer to whether your property has sold by the end of auction day. Yes, it take a couple of months to prep the listing and wait for the big day to come around, but if timed right, selling at auction can be a viable 'sell house fast' solution. Plus, thanks to Covid a large number of auctions have migrated online, meaning that the final sales price is FINAL, eradicating the risk of being gazumped.
Saying that though, the major setback with auctions is fees - there's a truck load of them. Fees are charged for marketing costs, the sale of your property and even to enter the auction in the first place. All of which can soon rack up and in some cases make an online agent, or even their more pricy high street alternatives, a wiser choice. Especially if you wrongly estimate your asking price and your house doesn't sell (gulp)!
- Sell house fast companies - Clue's in the name with this one. A quick sale company does much as the name suggests - they buy your house at speed. Many even brag about being able to complete on your sale in as little as 7 days.
Guilty as charged.
You see, if you haven't already gathered as one of the UK's leading cash buyers, we can do just that, as well as run rings around estate agents and auctioneers too.
Not that we're blowing our own trumpet or anything (even though we kind of are). The facts speak for themselves...
- Both online and high street agents charge fees, as do auction houses - we don't
- All three of these methods also rely on the level of demand across the open market - we don't.
- There's always a chance your buyer will rely on a mortgage or bridging finance to complete the purchase - (you guessed it) we don't.
FYI: For those of you who favour experience, our team has in excess of 50 years' in buying houses across England and Wales for CASH. We're also savvy when it comes to client liaison too and will do everything in our power to ensure your sale is as smooth as possible. In the past we've been known to even help our sellers negotiate on that extra bit off their onward purchase!
So, if you're after a straight up and honest way to sell your house, that's both hassle free and innovative in its approach, curb the 'Online Estate Agents VS High Street' debate and sell your house fast to Team TPBC.
Give us a ring on 0800 024 8444 (we don't bite). Or answer a couple of quick questions...