The public are being told that “high street agents typically charge around 2% of the price achieved”.
The claim is in the latest newsletter sent out by the Home Owners Alliance, which specifically looks at online agents.
It says: “Without doubt the biggest advantage of online agents is the savings you can make. High street agents typically charge around 2% of the price achieved.
“Even if you do get 1.5% this means you will pay £4,500 if you sell your home for £300,000.
“This seems extortionate compared to fees charged by online agents. Basic packages normally start at around £400, but even for the more expensive services you will struggle to pay much more than £1,000.”
In fact, the average fee is probably around 1.3% at the moment – thanks to Peter Knight for this very timely information.
The Home Owners Alliance has also done a comparison sheet, using eMoov, Hatched, House Network, House Simple and Tepilo.
Interesting to see that only Hatched seems to include the VAT in its prices.
And while we’re on the subject, there is a good blog here, also aimed at the public, this time from JD Gallagher estate agents based in Lancashire.
Here’s a sample: “If you don’t have any confidence in the agent sat in front of you, they are not the agent for you. If their pitch is that all agents do the same job but they do it cheaper, walk away now. It’s simply not true and this is the case in most industries, including service, retail and entertainment.
“You need an agent you are confident in. An agent who listens to you and understands your needs. You need to feel you can pick up the phone, call in to their office and they are there for you. Moving house is such a life changing event.”
Comments (22)
" If their pitch is that all agents do the same job but they do it cheaper, walk away now. It’s simply not true and this is the case in most industries, including service, retail and entertainment. – sensible words , can some of the AM collective that have commented on this thread tell me why these principles don't apply to agents mutual ?
At their current clip online agents will own the market in the next 48 hrs, ok let me re-think that. Buddy I’m guessing they sing as about as well as they represent the industry, starts strong then forgets the words so listen dude, I might be lost and alone right now but if traditional agency is wrong then I don’t want to be right because between their entrance song and Russ’ surname I have to figure they lost a bet.
Excuse the shameless plug but – "Online agents – Big savings or, paying up-front for failure?" http://bit.ly/1x6A2x8
Also available on the pages of this worthy periodical
Another point that these "consumer" groups fail to point out is that this cheap fee online only selling is hardly tried and tested. In its current form most of these companies have been around barely a year and for the handful that were around in some guise before that were only just making a living then. All of them had the same business plan, we make money if we get X number of listings. Now in order to compete they are having to up their expenditure to compete with each other and some serious investor money added to which at the last count, in my area there were 17 firms all jostling for the same 2.5% market share. If I were a consumer I would be giving any of these firms money upfront for sure, and given the tightening of the market, frankly anyone advising people to head to their nearest restricted marketing online only agent in fact needs THEIR heads examining!
*wouldnt be giving of course.
On-line only agents should really be called "on-line advertisers only" and a disclaimer "we provide no service", then the public may get wind of what they are getting for their money?
Why isn't easyProperty included? Very odd. Anyway whilst there may be headline savings in London, the locals don't seem to concerned and instead want the best price and service – whether or not online agents deliver this isn't the point – it's a vendors perception. In other areas, particularly the North West, 1,5% of many sales is actually no different from many of the online 'cheap' deals. These areas seldom make the advertorials.
It's a con.
"Also, do fee savings advertised include the fees that have been paid up-front from those owners who don't end up selling successfully online…" Hmmm. That's a bit rich, coming from an industry that defends its fees – at least in part – on the fact that one in three sales fall through…
The group shows budget online advertisers and only mentions 'that there are 2 redress schemes' when in fact there are 3. …………… The advertising is no doubt paid for and their understanding of redress is inaccurate. …… they also miss the fact that budvet fees doesnt leave enouvh to comm shafe which from other agents can introduce higher offers…………really not at the moment a balanced or good site for consumers
"There are three kinds of lies: lies, damned lies and statistics"
Also, do fee savings advertised include the fees that have been paid up-front from those owners who don't end up selling successfully online ? It shouldn't just be the up-front fee paid by the owner for selling his/her property.
Great idea…I am sick of hearing about on-line agents being much cheaper than the services of high street agents. Firstly, they have dramatically reduced running costs….lucky old them ! Then there is the lack of direct contact with the client…and basically from what I have seen they have absolutely no market presence…aprt from Purple Bricks who have crossed over from "the dark side ."It's about time the High street agents got together and started charging up- front registration and marketing fees from clients on a drip feed basis …after all what other industry spends out hundreds and sometimes thousands of pounds on a client without any guarantee of a penny in return….We must be absolutely mental !! That way we could be guaranteed something for our trouble and hence reduce our overall percentage to oil the wheels, as we would be able to budget better….simples ! how do we think the consumer will react to that ?
Don't blame online agents for your existing model. They only exist because your model is flawed, as you have oddly pointed out for us.
@ TomSamuel"They only exist because your model is flawed, as you have oddly pointed out for us" If the high street model is flawed, as you suggest, hence the emergence of online agents, then why have online only managed to achieve 2% of the overall share? They can't be the answer , can they?……Also do you truly believe that the vast majority of high street agents nationally charge between 1.5% and 4%?
No of course I do not believe that they charge these %. But I do believe that after doing some modest research across the country that it is in the region of 1-2%. The 2% is also just an estimate as is mine, the market is growing it may be a while before it really takes hold but it will get there. I'm not sure that they are the answer, just as self-checkout machines will never replace checkout workers. However, I do believe that there is room for both in the market and high street agents should embrace and adapt for the change rather than compound their archaic perceptions and resist.
Tom, thanks for your thoughts. You say that "high street agents should embrace and adapt for the change rather than compound their archaic perceptions and resist." Are you saying that high street agents should lower their fees, close their offices and go online? And what are our "archaic perceptions" exactly??
I just don't see why both models can't exist together? There need not be so much hostility, a collaborative approach whereby online and high street agents work together, ('I had a dream') could prove mutually beneficial for all. Archaic refers to the constant and stubborn refusal to acknowledge a viable opportunity for estate agents. Would you deny that there is ignorance within the industry?
"I just don't see why both models can't exist together?" They do already exist together…..it's just the general public have chosen not to use them in favour of a full high street service agents at the moment (98% to 2% proves this beyond doubt)………."a collaborative approach whereby online and high street agents work together, ('I had a dream') could prove mutually beneficial for all".. How?………."Archaic refers to the constant and stubborn refusal to acknowledge a viable opportunity for estate agents." Sorry, I don't understand this one?…could you expand please. Are you asking me to acknowledge online as a viable opportunity for estate agents like me? ……and finally "Would you deny that there is ignorance within the industry?"…No, you are right there is ignorance within the industry….and the lions share of ignorance seems to come from the online agencies who believe that they can offer the same service as a traditional full service high street agent from just £69+vat!!!
ANYONE, who quotes what "high street" agencies alledgedly charge should be able to back their claims up with hard facts-or be investigated by the advertising standards. If you search any online agency they clearly state (often with "savings calculators" ) that the high street agents charge between 1.5 % and 4% !!!!! I do not believe these % to be true nationally and I think either the RICS or NAEA should collect true % data to protect their members against the totally blasé approach that online agents take in quoting what they "believe" others charge. A classic example was on the last Beeny show where they showed online savings against 1.5% when the high street agent in question was only charging 1% if they sold – on a no sale no fee basis. The savings listed on the show were way higher than they actually would have been if the % facts had been shown correctly. If Russell Quirk (or any other online agent) is reading today perhaps you could let us know what research has been carried out by you to prove the high street % figures on your websites.
What I find amazing is the naivety of groups like this as to what they are comparing. They seem to completely ignore the risks in terms of achieved price or even chances of selling, they simply focus on the fees, like the meter stops the minute someone says they are interested. At the current length of time for sales to go through to completion, if you say the online agents cover their costs with their marketing figure, that means sellers are getting the back up advice of experts and getting their sale seen through for £24 a day. Hardly what I would describe as extortionate.
None of these online agents address how they plan to get values right. You save 4500 in fees then under sell by 10k. Not the smartest solution!
Land registry takes 3 months to update and markets can move faster than that.