Online agents have been good at making a lot of noise – but little else so far.
They have been around for some time, says Cheshire agent Maurice Kilbride, “but they haven’t exactly been a game changer”.
But he does warn high street agents that they should not dismiss online agents as an idle threat, must look at their own businesses and be prepared to change.
Kilbride says: “We should not under-estimate the challenge – some online agents are using technology very well and there is no doubt there is a niche in the market for them, which will grow if high street agents do not wake up and smell the coffee.
“However, there is one fundamental flaw in the online business model and it is a huge one.
“A home is simply not like any other commodity you can buy and sell over the internet.
“Estate agency is about real people and the real journeys they take.
“A computer algorithm does not know if those kitchen worktops were fitted correctly, what is underneath that newly fitted carpet or that the third bedroom used to be a garage.
“It most likely doesn’t know the motivations of the seller, upcoming planning applications in the area that may affect future values and saleability, and it certainly cannot negotiate, or feel a client’s pain or anguish.
“Good high street agents have built up an almost encyclopaedic knowledge of their patch and you can’t Google this wealth of knowledge.
“Each transaction has its own story. When negotiations become fraught or difficult, agents can be the much-needed independent, cool head to prevent emotion taking over which can easily result in a deal collapsing.
“What irks me more than anything is that most of these online / low-cost agents don’t seem to realise, or more probably care, that they are cheapening the image of estate agency, making out anybody can sell a property.
“It is easy attempting to devalue the excellent work many agents do.
“It is not all about cost – it is about value and there is a significant difference between the two.”
He adds that high street agents should make sure they look at their own business models and make any changes necessary.
“Do that,” he says, “and we can ensure that online agents remain nothing more than noisy neighbours.”
The full blog is here
Comments (5)
There is no doubt at all that the public have not, in any way, taken to the national online agency model, I believe we may see some casualties in 2015. The internet and technology will, no doubt, change the industry further in the future, but it's fair to say that no one has really come up with any new agency model that the public trust yet. In Switzerland they have never had "estate agents" as the properties are lodged with a solicitor for sale. Maybe companies will exist centrally and utilise professional home based agents to perform a real full local agency service locally , paying the agent around £500 and taking say £300 themselves per deal?. Who really knows,,?
No need, the national agents will stay as they are, they will franchise a few areas, but what's the point in franchising when you can do it all yourself? We can offer a full startup model for hardly anything, work hard for your own business without expensive franchising.
For our local area, Trevor is 100% correct. True national online agencies make up less than 1% of instructions in our area. But a local estate agent launched his own online agency from home and has made a big splash. They have now opened an out-of-town office, but continue with a low fee model. 0.75% is typical. They have become the agent with easily the largest single office register of properties in the area. We don't think that they can possibly be servicing such a large portfolio correctly, off such a low fee base. Trying to get chain information out of them is like trying to get blood out of a stone. But the public have embraced them…
What is it, 2%? Market share or something?………so, the point is, with a 10 year build up behind them the main thing the budget agents seem to have done is take what used to be called private sales, we all remember them, DIY for sale board, ad in the local rag etc? I'm sure that was 2% of the market back then? – Jonnie
I believe that the new wave of online agents will be home agents who have no high street shop, they work from home but cover the local area, this means they can list 100 properties per membership with rightmove, will have local knowledge, attend viewings, erect the sign themselves, create the brochure and charge say .5 – .75%.