An online agent is claiming to be saving the owners of £1m-plus properties hundreds of thousands of pounds.
The claims are likely to be carried widely by journalists.
EYE yesterday challenged the claims, helped by readily-available Zoopla information plus an agent with access to RightmovePlus.
The five examples House Network gave journalists in fact show a mixture of price changes and some lengthy spells on the market, and generally look to pinpoint ‘hard-to-sell’ properties.
In a press release yesterday, House Network said it is forecasting a rise in the number of sellers of seven-figure homes “turning their back on commission-based agents” in favour of online agents.
House Network claimed that one London home owner is set to save £172,000 on a five-bedroom villa in Regents Park on the market at £8m.
Journalists were also directed to a blog on House Network’s site which goes further, actually saying “£172,000 saved in estate agent fees”.
It makes similar claims in respect of a house in Essex; one in Gwynedd, Wales; another in Coventry; and one in Ipswich, Suffolk.
Mark Readings, CEO of House Network, said: “The online estate agent model of a flat fee is most appealing to owners of premium listings because quite simply the greater the value the bigger the saving.
“Next year we’re expecting a surge in wealthy owners to use online agents like ourselves to sell their homes.
“Vendors have put up with commission-based fees until now because there’s been no real alternative. But as sellers become more and more familiar with the online estate agent model it’s inevitable that increasing numbers of property millionaires go down this route.
“As with our customer in Regents Park, we’re talking hundreds of thousands of pounds in potential savings, which is a lot of money in anyone’s book.”
A spokesperson for House Network confirmed that neither the Regents Park house nor the other four had yet sold.
However, our research on Zoopla and RightmovePlus shows that the owner of the Regents Park house has also listed it with a high street agent, John D Wood.
It first went on the market with House Network on January 31 at £8,250,000, meaning it has since had a price reduction of £250,000 down to £8m.
John D Wood has been marketing the same property since April at the lesser price of £7,950,000.
The property in Essex, according to RightmovePlus, was first listed on July 22, 2013 with House Network.
However, the same property has also been listed, apparently on three separate occasions with Next Move, and once with Hetheringtons.
While its price is now quoted by House Network at £2,195,000, the asking price with Next Move was as high as £2.75m, and with Hetheringtons as low as £1,995,000, making for an interesting listing history.
The house in Wales was previously on the market for almost two years with two agents, including Strutt & Parker, at the cheaper price of £1,150,000. It is now on with House Network for £1.25m where it is said to be offering £26,401 savings in estate agency fees.
The house in the midlands has been listed since June 24, according to Rightmove, and has had a £100,000 reduction.
The property in Ipswich was first listed on House Network on September 28, and its asking price of £1.1m is unaltered.
We gave House Network the opportunity to comment on our findings.
House Network initially also volunteered to give us examples of properties it had sold STC, and said the vendors had saved £38,137 and £23,053 respectively on properties in Kensington, and Stoke Newington.
http://www.rightmove.co.uk/property-for-sale/property-35120406.html
http://www.rightmove.co.uk/property-for-sale/property-34596762.html
Our research shows that the Stoke Newington property went on the market in May at £1.2m, but had its price chopped by £105,000 in June to £1,095,000 – the reduction being almost five times the savings on high street estate agency fees claimed.
Comments (22)
Having been viewed with embarrassed amusement and mild-concern in equal measures over the past year on here and social media as I have bashed on about a number of these agents, it is very comforting that I am no longer the lone nutter shouting about an issue. It saddens me, though, that we haven’t yet eradicated these practices from these self-styled ‘consumer champions’ of the property world.
A year ago, I took one on-line agent to task with the ASA about misleading claims and won on two out of three counts. Since then, that agent has had to make some very embarrassing climb downs, admissions and changes to the wording of much of its advertising. No longer able to make the same misleading claims, it may be a coincidence but, their customer numbers have plummeted by over 45% in the past 6 months.
A small group of agents and property professionals have now started to work together to identify unlawful activity such as exposed in this story, and it has been like opening a Pandoras box of deception on an industrial scale. Investigations and evidence gathering continues and more revelations will become published soon.
That such a group has felt the need to form should be a source of shame for the NAEA and RICS who seem to be deafeningly silent on this matter.
Well done Chris, Keep up the good work.
I echo your sentiments, this should not be a job for agents but the job of our so called regulatory bodies to police, enforce and act upon. Otherwise what is the real purpose of them?
This is great to hear but totally agree that the so-called regulatory bodies should be doing this anyway. Unfortunately, mis-leading claims are not the sole preserve of the on-line fraternity……………..
That is very true, fluter – but the only way to eat an elephant is one bite at a time.
In order to draw attention to themselves, those who live in the glassiest of houses seem to throw the biggest stones…
…it would be rude not to throw them back at them.
As I have always told my staff, if it were all about lowest fees, then the cheapest agents would be the most successful & prolific. They are not. The big variable remains sale price & service and any good agent will make the fee pale in to insignificance compared with the net sale price which is ultimately what really matters. The rest is smoke and mirrors.
Bottom line with on-line Estate Agents is that they are not agents – they are a property-listing service. They DO NOT get on the phone and book in potential buyers and they DO NOT have a relationship with local purchasers. They list a property and wait for the business to come to them. On-line agents can parade all they like in a bullish market, but, given a downturn, their numbers will inevitably dwindle.
Agency is often perceived as a ‘money-for-nothing’ industry (hence the numerous on-line start ups trying to grab their own slice of this new gold rush), but the hall marks of professional, high st agency (particularly in sales) are being an active member of a community, knowing the streets and the people who live on them and forging relationships that can, in some cases, span generations. This is what will see the high street live to see a diminishing presence of solely on line based agency, particularly when sellers NEED to sell or require a speedy, off-market/discreet transaction.
I’d challenge the various quotes by online agents suggesting the sellers are “fed up with extortionate estate agency fees”. NOT THEY’RE NOT! Not only are UK agency fees the cheapest in the world but people simply don’t use estate agency services frequently enough to be fed up with any aspect of them! But the newspapers seem to be buying the online agents’ spin, which, as is being proven, is falling apart at the seams.
Mr Rawlings
I can’t remember the last time we agreed on what day it was, never mind anything Agency related.
I’ve marked today’s calendar with a bl00dy big smiley face! ;o)
Seems like you are back on your old variety of water Richard, welcome back!
Agree with Peebee agree 100% in the above.
I actually find it ridiculous that you can sell a property in the UK for sub 1% pretty easily.
i think the smart money is for starting up a “Find a property” department. with so little coming on and the erosion of fees i think a 1.5% finders fee for the correct property is more than acceptable. This use to be a service for the wealthy and time poor but i think we will now act as buying agents also as with elsewhere in the world.
I cant wait to use this article on vals. Not that I have many vals where Im up against these loonies but when i do……….
I hope someone high up on our side makes a big thing of this in the larger press because it beautifully demonstrates what we’ve all been saying all along. It shows how daft they are as well. Imagine preparing those figures and claims and not being able to back any of it up, what were they thinking?
Firstly, what a nice thorough bit of research by EYE, very detailed, but………….I can’t quite believe a budget agent would talk such complete twaddle and work some numbers to show they save their lucky punters huge sums of money only to then fess up to the fact they haven’t done any such thing.
We’ll have some shouty oddball telling us he gets 109% of asking price on here next or someone with a cripplingly expensive licence to pay but only as many listings as a large single branch with equally flakey ‘news’ for us any day now.
id always quite admired House Network for keeping a dignified distance from stuff like this now, on his first outing he’s lobbed his own banana skin up the street a bit and legged it at full chat right onto it.
Jonnie
How interesting!!!
But this misses the point concentrating on reductions in the price advertised, a good proportion of properies advertised in N16 0SD, also have price reductions, some have price inceases, some agent have prices going up and examples of price reducions.
A house is worth what a buyer will pay, the orginal price asked is no indication of sale value, all estate agents are subject to instructions from clients to reduce or increase, this articule infers that only on-line agents reduce prices.
I think what House Network are saying “Savins against ‘High St Agents'” all said there is no right and wrong as until sold no one knows the actual price of a property, and Rightmove properites listed as sstc, do not display the sold value.
Seems to me that if you entered Mastermind, “missing the point” would be your specialist subject, ‘Landlord’…
Ive given you a ‘like’ but if there was a ‘chuckle’ button, I would have pressed that instead.
=D =D =D =D =D =D =D =D =D =D =D =D
Yes, a house is worth what a buyer will pay for it, but what determines what the buyer will pay? Competing with other buyers, well handled negotiation by somebody that understand the area and can you use social proof to frame prices?
If your logic stands, why on earth would somebody use Sotheby’s to sell a valuable antique. Surely, antique buyers don’t need to attend an auction they can just browse antiques for sale online?
Never mind ASA where the hell is the NAEA? Haven’t we “real” estate agents been given great support from them. I thought they were concerned with the consumer experience and transparency. And yet they allow these on line agents membership when, in their wildest dreams,they know that with virtually no staff,they simply cannot offer a full customer service.
And as your article above clearly demonstrates, what a load of rubbish and indeed disingenuous rubbish,they talk about client savings
Question for the NAEA: are they going to sack this agent for being so publicly disingenuous?
Very valid point. I’m afraid I left the NAEA a few years ago, having been an active member and branch chairman, as I realised they were just really just a club and more interested in getting my annual subscription fee etc than helping, a bit like the Property Ombudsman but without any teeth!
Couldn’t agree more Didn’t a Monty Python sketch once lament “what did they do for us”?
I too was a staunch advocate for NAEA,ARLA,NFOP but the kudos of being a member is no longer relevant as long as you pay your fee and subscribe to their client protection scheme they will accept just about anyone.
This club will not bite the hand that feeds it.
Regulation WHAT Regulation??????
“House Network initially also volunteered to give us examples of properties it had sold STC… Of those properties, our research shows that the Barnes property has also been listed by another agent, Apparent Properties, which also shows it as sold STC.
House Network has now confirmed that it has not sold this property…”
RESULT!!
What a pity that ASA or Powys won’t do anything about such practice.
Or WILL they? Here you have a clear admission of deception; a lie taken too far to fluff up the feathers because there is little or no meat on the bone of the mangy bird.
You’ll just have to watch this space, I guess, for the follow-up…
Sorry Peebee you are wasting your time;there is every indication this turning a blind eye to breaches of Advertising standards and CPR regulations is an establishment attempt to engineer a solution to housing crisis created as the consequence of economic policy (interest rates). You won’t get very far asking those complicit in the scheme to police themselves.
I know exactly where you are coming from Robert and I’m inclined to agree that the struggle to get the issue(s) of lies, damn lies, statistics; #portaljuggling and #pricejuggling is going to be long, hard and in the main uphill to the extent of being vertical.
BUT, it cannot now be denied. It can be – and is being – spotted and evidenced by more and more that are simply fed up with outlandish claims designed to impress potential customers to part with money.
SOME might call that fraud. I would prefer to leave its’ classification to the Authorities – but will be doing everything in my power to gnaw the ankles of the Authorities to make that call.
And I’m pleased to say that I’m far from alone in that vertical climb.