It’s not surprising at all that online estate agents have blown up in popularity – they’ve made it possible for us to sell our home for practically peanuts. Using an online estate agents can literally save you thousands of pounds.
With such a compelling sales pitch, using an online estate agent seems like the obvious choice. However, what are the pros and cons? And if they such a good deal, why is using a high-street agent still the most popular way of selling a house?
What ultimately, it all really boils down to is one question: should YOU use an online estate agent to sell your house? Let’s take a look at the details…
The short answer to the question (and the one that’s as useful as a chocolate teapot): It depends.
It really does depend! I’m sorry!
At this point, I’m going to assume you’re already aware of what and how an online estate agent is, specifically what the key differences are between a traditional high-street! If not, then you may want to take a look through my online estate agent guide before continuing, otherwise you may just find yourself drowning in confusion.
Ok, so for those of you already aware of the what and hows…
Online estate agents = Cheaper
The fact you’re even contemplating this decision tells me something crucial straight away, and that is, the prospect of massively reducing agent fees isn’t your only concern. You already know online estate agents are a buttload cheaper, so now you’re considering the practicalities and consequences beyond the final bill.
But just in case you don’t know, let me give you some quick hair-raising context. According to this article on the Telegraph, Lloyds Bank estimates that estate agents in London charge £10,402 on average, while the average online estate agent will charge a fixed fee of around £600. That’s FIXED; no hidden fees, and no ludicrous extra fees for things like using the bathroom facility in your local agent’s branch office!
If those figures have already got you salivating, and you’re already convinced (of course, no one would blame you)…
Online estate agents and their pricing model
One of the main criticisms of the online agency model is that we have to pay the service cost upfront, regardless of whether you sell your property or not. Meanwhile, traditional high-street agents usually charge a percentage of the sale price, a substantially greater fee in comparison, only once the property has been sold.
Some online agents do offer “No sale, no fee” packages, but they’re significantly more expensive compared to the pay upfront packages, which I feel, makes it a hard-sale. For example, the online agent Yopa currently charges £889 for their “Pay upfront” package and £1,999 for their “No sale, no fee” package. And yes, the ONLY difference between the two packages is the payment model.
While both packages can still be cheaper than using a high-street agent, that won’t always be the case for less expensive properties. For example, assuming a high-street agent charges a fee of 1.5% of the sale price for a property that sells for £100,000, that would cost £1500 in agency fees.
So what does this all mean? There is a certain element of gambling when you use an online agent’s standard upfront payment packages (because there’s no guarantee you’ll find a buyer), but the rewards can be plentiful- thousands of pounds.
If you’d feel safer using a “no sale, no fee” package, the rewards can still be plentiful. However, my advice is to do the maths first, because as my example demonstrates, it can actually be cheaper to use a high-street agent.
How much can I save exactly?
Ok, ok, ok, you want the exact numbers! I’m with ya’, I got your back…
So, moving along- there’s also another rather popular reason for using an online agent, and the reason isn’t particularly surprising. Rightly or wrongly so, many people simply don’t want to work with grease-ball estate agents. What can I say to that, other than, I get it? So if that’s your main incentive, knock yourself out.
But of course, there’s more to the riddle, right? There are so many more questions that need to be addressed before taking the plunge…
- Will I be able to sell my property as quickly an estate agent?
- I don’t know how to sell a house, what the hell do I do?
- What if I can’t sell my property?
- How much do I even sell my property for?
All valid concerns (so don’t worry, you’re not a total pussy), and here are my two cents…
Online Agent Vs High-street Agent
See, online estate agents will argue that high-street agents are dinosaurs; they’re the modern day equivalent of fax machines, pager and chewing bubble gum, while the traditional high-street agents argue that online agents will NEVER be able to match the unparalleled personal one-to-one service and local experience they bring to the table.
The reality is, they can talk shit about one another until their blue in their stupid faces, because while there is a shed-load of pros and cons for both means of selling property- and both are valid and serve a purpose. But, the key difference is: they each offer different experiences for two different types of sellers, even though the result is ultimately the same.
Do you know why people don’t compare 4×4 Ranger Rovers with Porsche 911s, even though they’ll both take you from A to B? Because they cater for different audiences, and that’s exactly why online agents shouldn’t be compared with high-street agents. There’s enough business for all, so no one needs to kill anyone! However, for the purpose of trying to make this a well informed blog post, I will quickly skip through some of the main pros and cons between the two (some of the key points I’ve already covered, so please excuse the repetition).
Advantages of using an online agent
- Butt-load cheaper than the traditional high-street agent, and you work on a one-off fixed fee.
- You are in the driving seat! Nothing gets lost in translation if you deal direct with the potential buyers. Heaven forbid, I’m not saying that estate agents twist the truth or forget vital pieces of information, almost as if it falls out of their head without thought. I’m just saying there is less chance of Chinese whispers with less people relaying information.
- You have the option of buying add-on products, like hosted viewings, professional photography etc. You can almost make your own package, and only pay for what you need.
Advantages of using a high-street agent (i.e. disadvantages of using an online agent)
- High-street agents generally always work on “pay on sale” pricing model, while the most cost-effective online agents packages are based on a “pay upfront” pricing model (which you pay regardless of whether you sell your property or not). As discussed, some online agents do offer a “No sale, no fee” package, but they’re significantly more expensive. You can compare the differences in my “no sale, no fee” online estate agents blog post.
- You’ll have a local agent doing the viewings and negotiating for you.
- High-street agents have a local presence in a physical branch, so they’re better suited for those that prefer face-to-face dealings.
So, should you use an online agent to sell? Are they any good?
In my opinion, it really boils down to whether or not you can be bothered to (which includes taking into consideration the potential savings). That’s really it!.
High-street agents are better suited for those that want to sit back and let someone else do the monkey-work for a premium. Of course, it’s an expensive monkey you’ll be shelling out for. Online Estate Agents are better suited for those that don’t mind rolling up their sleeves, and doing the following for the sake of saving a small fortune…
- Processing enquiries
- Managing and taking viewings (some online agents actually do provide ‘hosted viewing’ services, but it’s an add-on service which costs around £300)
- Dealing directly with the buyer
If you’re willing to do all of the above, plus a bit of admin work, and if…
- You are good with people
- Open to entertaining and tolerating weird people
- Aren’t totally repulsive in regards to hygiene, appearance and persona
- Relatively sensible and organised
- Equipped with common sense
… then, cool, this online estate agency gig might be just for you!
But before making a final decision, if you haven’t done so already, you may wish to find out how much your local agent would charge to sell your property, which will then allow you to calculate the price difference between an online agent. You can then decide whether or not the total saving is worth the time and effort required to manage the tasks in the list above. If you discover you’ll effectively save/earn (depends on which way your googly eyes look at it) £2k, you may think it’s a no-bloody-brain…
I want to step on a rumour quickly, because it might make all the difference to your final decision.
There is a common misconception about online estate agents and how they leave the poor vendors to fend for themselves once they’ve handed over their dosh. That’s really not true.
I mean, if you use an online agent, it does mean you’re opting to do a lot of the leg-work, but you will still have access to telephone support. That’s kind of the deal! However, it’s not the only option available. In come “Hybrid Estate Agents”
A hybrid agent has essentially taken bites out off the online agency model and bites off the high-street model. So what’s the end result?
You will generally get everything which an online-only agent provides, but with one notable extra: a dedicated local agent.
Yes! You’re provided with a local agent which will work with you until completion! They will support you personally and be with you every step of the way; all your questions, concerns and support will be addressed by your local new-best-friend.
So there are options for a more “supported” online agent experience. Needless to say, a Hybrid agent will bump up the price from the regular ‘online agent’ package (approx £300 more), but still a buttload cheaper than the high-street alternative.
In my opinion, it’s really difficult to provide many differences between a Hybrid agent and a High-street agent, other than the fact the latter has a branch. Other than that, the service can be very similar.
How much is my property worth?
I’ve noticed that many of those toying around with the idea of using an online agent get bogged down with trivial concerns that really shouldn’t create any barriers of concern. Because, firstly, you can ALWAYS contact your online agent for guidance when in need, and they should steer you in the right direction. And secondly, selling a home genuinely isn’t a complex process. The aspects that are complicated, like the legal junk, is handled by the Conveyance Solicitors.
So what’s my point? Well, the whole issue of “How much should I sell my property for?” is one of those questions that people see as a complication, when it’s really not.
The quickest way to gain a relatively sensible figure is by looking on Rightmove and/or Zoopla to find similar properties in your area for sale. Perhaps the most accurate means is by using an Hybrid agent like YOPA, because they will send a local agent over to your gaff to do a full on autopsy, just like a high-street agent.
Be warned though, many of the regular online agents that don’t offer in-person valuations (i.e. those that aren’t hybrid) will valuate your property based on current and recent house-selling statistics from the comfort of their own office, which is based a gazillion miles away. Those valuations aren’t always accurate. So it’s always a good idea to pull your resources together and get a few valuations. If that means contacting a local agent to step into your premises to conduct a formal valuation, even though you have no intentions of using their services, then so be it. I don’t think that would be totally unreasonable… err… or would it? I suppose it depends on your morals and/or the size of your cahoonas.
On a final note, I do want to clarify that a valuation is just that, a valuation. Similarly with using a high-street agent, you can always set your own selling price, even if it’s woefully optimistic and defies reality.
Will I be able to sell my property as quickly an estate agent?
In my opinion, there’s no reason why you can’t sell it just as quickly.
But let me rephrase the question so it’s more pertinent: will I get the same amount of enquiries as a regular high-street estate agent?
Generally speaking, you should, and then it will be up to YOU to convert the sale. 90% of home-buyers research properties online, specifically from websites like Rightmove and Zoopla, and that’s exactly where most high-street agents source their enquiries from. It’s not even worth using an online agent that won’t market your property on Rightmove and Zoopla, so on that basis, you should get the same amount of leads through from those websites.
So, what are your thoughts? Can you be bothered to use an online estate agent, or not?
Disclaimer: I'm just a simple landlord blogger; I'm not qualified to give legal or financial advice. Any information I share is my opinion based on my personal experiences as an active landlord, and should never be contrued as legal or professional advice. For more information, please read my full disclaimer.