An online agent has mounted a robust defence of the payment-upfront model.
It comes at a time when a number of online firms are turning to no sale, no fee, amid criticisms that a fee paid up-front means they need do no further work after taking the listing.
House Network has however said that the payment up-front model works best – for vendors.
House Network itself offers sellers a choice of a one-off payment upfront, a deferred payment model, and no sale, no fee.
The first two cost £795, with no sale, no fee costing from £995.
So far this year, most of House Network’s sellers (40.4%) have chosen no sale, no fee; almost 31% have opted for an upfront fee – which EYE found was actually on offer in our area for £700; and 29% have gone for deferred payment.
However, founder and CEO Mark Readings yesterday made clear his preference for being paid a fixed fee upfront.
He said: “We like to sell houses based on a one-off fee.
“There are many reasons for this.
“Over the last 15 years our research has shown that the first three weeks are the most important in selling a property.
“The one-off fee allows us to maximise the marketing of a house when it matters.
“If we do not sell within the first month then we keep marketing until the sale is achieved, so it is always in our interest to sell the property to the agreed price as quickly as we can. For the seller it is a win-win situation.”
Readings said that consumers should think carefully about signing a long-term contract with an agent, whether online or high street.
He said: “We know that most properties sell within the first three weeks, so it makes no-sense to sign-up with a single agent for six months and potentially have your property sitting with them unsold and un-viewed for over five months.”
Readings, who claims his own agency sells properties at an average of 98% of their original asking price, added: “For some sellers a high street estate agent may be the best option, but for many people the online service we provide gives them the service and the savings they are looking for.
“For us it is about getting the right valuation and getting the best exposure for the property.
“If we can sell your house you can move on, and if at any point we fail to meet our 20-point customer service promise, we will sell the house for free.”
House Network claims to be the UK’s longest established online agent, and was set up in 2004.
Its 20-point customer service promise includes vetting every single viewer, returning phone calls within an hour, and taking off shoes when going into homes.
Comments (25)
Readings said… “We know that most properties sell within the first three weeks.”
Erm… so how come that of the 852 “UNSOLD” properties you currently list on Rightmove, no less than 62.8% of them have been on your books for MORE than three weeks?
(asking for a friend)
“House Network has however said that the payment up-front model works best – for vendors.”
Please, House Network – explain why this would be the case?
Trust me – this shower have a great deal more to “defend” than their wish for everyone to instruct on a NSPR basis.
Ros has been passed the info… suggest y’all watch this space!
;o)
“Over the last 15 years our research has shown that the first three weeks are the most important in selling a property.
“The one-off fee allows us to maximise the marketing of a house when it matters.
-[b] How? How is this different from traditionally agents? [/b]
“If we do not sell within the first month then we keep marketing until the sale is achieved, so it is always in our interest to sell the property to the agreed price as quickly as we can. For the seller it is a win-win situation.”
– [b]The same argument still applies, there is no motivation to sell the house as the money is in the bank, to say otherwise is frankly a falsehood.[/b]
Since most of the costs connected with buying a house are paid from the sale of the previous property. His claim that vendors would prefer to pay up front is it is somewhat surprising.
Lawyer says give me an up front retainer or I won’t undertake the conveyancing. Removal company says give us deposit to secure your move. HMRC says give us 20% of the estimated stamp in advance. All ridiculous I know, but no less ridiculous than asking for a fee for something you haven’t done and claiming it’s the way forward,
A quick look at all of their listings on Rightmove and significantly more than 2% of their stock has been reduced, so how are they allowed to get away with saying that on average they achieve 98% of the original asking price.
It would appear to be a blatant lie and as such, if they’re using this stat to win instructions, could they not be accused of gaining money by deceit?
It is still possible to achieve 98% of original asking price still. If you are reducing only 2% of your stock by say 5% and selling the other 98% at original marketed price price then over all you will be achieving 99.9% of the original marketed price as an overall pool (which is what the stat is telling you).
Infact you can reduce the price of 40% of your stock by 5% and get 98% of you planned to achieve overall.
So not a blatant lie at all….
Nonsense
Telling people that on average they’re likely to achieve 98% of their original asking price (which is the message they’re trying to give) means that the average seller would be safe to believe they will achieve 98% of their original asking price. Your 40% scenario would actually result in well over a third of their of their clients getting nowhere near this.
Further more, 40% of their clients would be getting about £8k below what they thought they were going to get (based on an average national house price of £260k) which might make them resent the fact they’ve paid for a specific result but come up woefully short. They may also question the so called “saving” they’ve made against a traditional agent, who they would only have to pay if they achieved the result they promised at the outset.
The other flaw in your argument is the assumption that they sell all of their stock. If I take on 10 houses and only sell one at 100% of the asking price, would it be okay for me to tell prospective sellers that it’s completely safe to pay me up front as I achieve 100% of the asking price on properties I sell?
From your comments, I would guess you’re not an agent and are falling for the same tricks and misrepresentation the public are.
It’s not nonsense at all. You were trying to argue that since more than 2% of properties were reduced on Rightmove that the stat must be a lie.
The stat reads…..
his own agency sells properties at an average of 98%
Mr Readings is not trying to pretend it is on properties not yet sold (how would he calculate anyway?), and the maths shows that if they sold 40% of properties at 5% below original marketing price and 60% at original marketing price then they would be achieving an average of 98% and the stat holds true. Of course the reality will have some taking a bigger discount and some will be selling above asking price, but your original premise was that since over 2% of stock is reduced on rightmove that the stat is a lie – and that’s not the case at all.
I imagine that since they’ve been in operation since 2004 that there are a fair few properties on which to calculate the stat.
It’s about interpretation. To suggest the average seller achieves 98% of the asking price is how this stat is being represented and no doubt he’s chosen his words carefully. However, the intent is to perpetuate the belief that a seller choosing House Network will typically achieve 98% of their original asking price which I very much doubt is the case.
It’s also convenient that “sellers” now seems to be a generic term for “vendors” which again is designed to mislead. What I would actually like to know is what percentage of their actual vendors go on to become sellers in the true sense of the word (complete the transaction). After you factor in the number of vendors who achieve 0% of their asking price because their property isn’t sold, their 98% will be obliterated.
TOTGA95
According to Zoopla, the Asking Prices of 368 out of 1216 – that’s 30.26% – of HouseNetwork’s listings have been reduced by 2.1 percent OR MORE (the highest being a whopping 35.4% REDUCTION, by the way…)
50.3% of those 368 reduced listings have been clipped by more than 5%.
Properties that have seen price reductions are more likely to sell than those which stick out for inachievable prices.
They are also more likely to suffer further reduction on the final price agreed.
Sorry – there are no statistics available for the last 2 statements – just 39 years of board-treading on my behalf and probably several thousand years between us of the EYE audience – of which I doubt many would argue (I stand to be corrected).
Now I could do the maths and completely wazz all over your own attempt at statistical *********** (credit: Jonnie) – but I suggest we both know that ain’t necessary in the least…
…so that being the case – care to have a second read of your posts; chuck away your frankly infantile attempt at numeric gymnastics and eat some pretty stodgy humble pie to Shaun77…?
There’s a good chap/chappess.
Not at all. The original post suggested that since a certain proportion of houses were reduced on RM that the stat of selling properties at an average of 98% of their original asking price must be a lie – but that’s not the case. By definition if it is on RM/Zoopla it won’t yet be calculated in Mr Reading’s stat.
I don’t see the problem with Mr Readings using the stat on properties that are sold. I doubt many on here would expect him to use a stat that included those properties that didn’t sell, or any where the buyer’s offer fell short of the amount needed for a sale to be agreed. I have seen agents use a similar stat across the country and always understood it to be on properties sold.
Infact, Mr Readings should be applauded for using ‘original marketed price’, as I wonder how many are using ‘last marketed price’ when calculating the stat.
SO – let me get this straight. According to your continued line of argument:
1. You apparently do not accept that there is a direct correlation between ‘listings’ and ‘sales’.
2. That it is probable that, as a minimum, a similar (if not larger) proportion of “reduced” properties on an Agent’s books will go on to sell than those which have had no reduction at all.
3. You do not accept that today’s reduced stock can or will affect tomorrow’s results and statistics.
4. Your hair-splitting expertise is at 5th Dan level.
Okay – let’s take the hair you’ve split – and see just how thin we can get actually it, shall we?
HouseNetwork have a total of 366 properties showing as Under Offer/SSTC on Zoopla as of 23.15 this evening.
Of those, ONE HUNDRED AND FIVE of them (28.7%) have been reduced by a figure of more than two percent.
(A further FIFTEEN have been reduced by up to two percent.)
The largest reduction is that previously stated mahoosive 35.4% off the original Asking Price.
The above 28.7% of “SOLD” properties on Zoopla correlates fairly closely – a mere 5.2% margin – with the 30.26% of reduced listings that I quoted yesterday.
And you haven’t yet factored in that the COMPLETION PRICE will not necessarily be the REDUCED ASKING PRICE. The reality is that the end-figure will be lower again in the vast majority of cases..
It is reasonable therefore to suggest that my previous argument holds water and that no amount of wriggling or attempted further splitting of hair will cut you any slack with the noose you have tightened round your own neck.
I think we all know that their figures are flawed. Fatally. Best you retire gracefully, before the ref counts you out..
I bid you oyasumi
PeeBee
Hair-splitter (Eleventh Dan)
“The one-off fee allows us to maximise the marketing when it matters (first three weeks)”
Presumably those opting for a no-sale-no-fee service miss out during this crucial time?
Dont offer it if you’re not prepared to do it well.
Money talks and the public are an ignorant fickle bunch. On line upfront agents will always have a market. £1000 v £3000+ for many is a no brainer no matter how hard agents try to educate dumb Jo Public.
Nice to see a reasoned, balanced response.
The customer is knowingly taking a calculated risk by choosing the non traditional option, the reward being sizable savings against the potential loss of upfront fee.
‘The customer is knowingly taking a calculated risk by choosing the non traditional option, the reward being sizable savings against the potential loss of upfront fee‘.
Agree completely and this is exactly why the ‘online’ brigade will never (collectively) grow a sustained market share of more than 5% – 6%.
Sorry, ‘JasonB29’ – what “calculated risk” would that be, precisely?
The act of chuffing a grand or so up against the wall on what has been statistically shown to be the toss of a coin?
You’re having a long-necked, even-toed ungulate.
Never heard of them.
So you’re saying ‘You’ prefer a payment system where you get paid regardless of outcome, funny that?
If selling houses is as easy as you state and you are as confident as you sound, you simply wouldn’t need to charge up front?
End of argument……….
Why on earth does this chap have to defend charging a fee upfront? It’s what they do at Toby Carvery and could be described as a well established business model. Good for cash flow. Causes clients to be serious about selling. No sale no fee is one of the serious issues with property market.
Yes but at Toby Carvery once you have paid you 100% of the time get a meal. With some call centre agents it has been suggested that once you pay only half the time you get a sale. Would you go into Toby Carvery on this basis, “Thanks for paying Mr Emmersons46 however on this occasion we are not providing you with a meal”…but please still leave us a review because whilst you were here at least the lights work!
Awful analogy, bit different going to get dinner than to sell a house!
House Network claims to be the UK’s longest established online agent, and was set up in 2004.
Define Online Agent Please?
We have been online since 2002 and on the High Street, so have other Estate Agents and some even before that.
Whilst many ‘traditional’ agents work from serviced offices and use fixed fee pricing models – the line is incredibly blurred between ‘traditional’ and ‘online’ agents.
I‘ve worked with high street agents who use call centres and online agents who have been working in the same local area for 15 years plus.
I’m yet to speak with anybody who can give a tangible definition of a difference between the two.