The founder of an online agency is calling for a truce in the war of words between online and traditional agents - and has even admitted that High Street agents will inevitably beat online agents to local knowledge and hands on service.
Tom Webster, founder of marketmyproperty.co.uk, says the sometimes-vicious rivalry risks missing the point that competition can be good for consumers and competitors alike.
Giving consumers choice is always a good thing, as it inevitably makes everyone step up their game to provide the best service possible or they will be left behind he claims.
Webster - whose Sussex-based company is pitching to sell land as well as properties online and describes itself as demonstrating an ethical approach with no hidden VAT in its fees and no estate agent-speak - is candid in his assessment of the strengths and weaknesses of an online offer to clients.
While on the one hand an online agency can pass on its reduced overheads in the shape of lower fees, on the other hand people still like the idea of having someone else showing people around their homes when they are not in, and that is where the traditional agent will win he concedes in an emailed letter to Estate Agent Today.
Here is the full text of his letter:
One of the most commonly debated issues amongst property sellers of all kinds; Are Online Estate Agency's the end of traditional Estate Agents My personal opinion as a founding director of an online estate agency is surprisingly, no!..
I like to draw comparisons to the travel agent industry, 10 to 15 years ago if you would of told your next door neighbour you booked your holiday on the internet they would of thought you were crazy, What you paid one of those computer things for your family holiday!, even though now it's a more common practice to buy holidays online you do still see lots of agents selling holidays down your local high street.
The two sell exactly the same product but offer a completely different service, and that's the same as where we are now at with Traditional vs Online Estate Agents.
Online Estate Agents like Market My Property have lower business costs than a traditional estate agent, which we all know means those savings can be passed directly to consumers in the effect of low cost fixed fees.
Even though Market My Property meet everyone face to face and are always available over the phone and via email some people still like to know they can pop into town to speak to someone. People still like the idea of having someone else showing people around their homes when they are not in, and that is where the traditional agent will win.
Since the recession people now watch the pennies a lot more and they ask themselves before I spend thousands of £££s how much of this can I do myself and it's those people online agents are perfect for. Elder generations and people who are less confident to conduct their own viewings or need more face to face time will be more inclined to stick to what they know with the traditional agent.
It's a shame that so many online agents and traditional agents are at each other's throats trying to prove that they are the only way people of the future will buy and sell property. Variety is the spice of life and giving consumers choice is always a good thing, as it inevitably makes everyone step up their game to provide the best service possible or they will be left behind.
High street agents who are not willing to provide exceptional service will struggle just the same as online agents who don't do everything they can to constantly improve. We all work in a service lead industry and as long as we can each justify our own prices with the service we offer there is space in the market for everyone to co-exist.
The online agent sector will continue to grow as people begin to learn of the alternative options and online will continue to beat the high street to price and flexibility. In the other camp High Street agents will inevitably beat online agents to local knowledge and hands on service. At the end of the day it's not down to us it's down to consumers, and they can now ask themselves what do I need to sell my home.
Comments
Good analogy between Easy Jet and British Airways et al. There will always be those who want the no frills - no board, no sales brochures, no accompanied viewings, no advice, no feed back, no sales progression, no handing keys over, etc and those who want an estate agent.
@tomwebster nice article with good sentiment sadly it won't happen. The market is competitive with entrenched incumbents facing agile new entrants. Online delivers cost benefits that can be passed onto the consumer that is a core battleground in this space,its not the only thing but a core component. Did easyjet compare itself to British Airways or Air France of course it did but it also marketed the benefits of its own proposition. Overtime this proposition has grown and developed to encompass more than just price. You will never convince most traditional agents that online is comparable and for some that maybe the case but as more well funded brands enter the space the consumer will have more choice and more value than ever before.The biggest online agents will generate economies of scale and drive down prices yet further.
Winners as you say will be determined by the market, I sincerely hope your business survives and thrives by providing something different in your local market, nationally easyproperty.com will make a big orange splash very soon,there will be plenty of waves for sure :)
I certainly think online estate agents can provide a decent enough service in inner city areas where there are large amounts of comparable property for sale however, when it comes to rural areas and / or property that is unique, I just don't think you can beat a local agent that knows the ground.
Big problem is that although a good local estate agent is worth his weight in gold, there is no guarantee a vendor is going to identify, choose and instruct that "great" local agent.
Estate agency as a whole suffers from a lack of differentiation. The sales spiel tends to be the same no matter which agent you speak to and as such vendor perception is that all agents are the same. Tar + one brush etc...
Unfair but I think none-the-less the reality of the industry.
The "industry ripe for disruption" nonsence put out there by every new digital start up with a "hard on" is frankly getting boring. See one of the latest examples: [url="http://i8it.ly/w4YJs"]http://goo.gl/w4YJs[/url]
Yet another VC poised for loosing a ton of money chasing a market that just simply isn't as ripe as they think it is.
Bottom line, majority of house sellers want (and will always want) a local expert to handle their sale.
Too much money is at stake for many to feel comfortable taking 100% responsibility for their own sale.
Biggest challenge estate agents have is to stop giving home movers a reason to distrust them and start pitching on the things that are genuinely persuasive - their ability / skill at negotiation, their superior knowledge of local property values, proof of successful sales achieved.
So Green Top Milkman, local knowledge is knowing where the bullsh..t is then ;)
'nuff said!
Local knowledge is very important guest "guest"! If you work in the countryside knowing who farms what and where and what sort of noise comes from their buildings and mess they cause can certainly affect a buyer's transactional decision. Hunts, pheasant shoots, what the village community is like, all these things require local knowledge and is often how we get instructed on sales. And, yes, I do know most of the area within a 20 mile radius pretty well! But that's the difference between rural and urban estate agency! (I can see a new topic starting up here!).
Some people will always find fault and complain - you see it on these forums all the time.
Live and let live and let the consumer decide!
You will know who was right in a few years and then you can say "I told you so"
After recently using a local estate agent to sell my house (or to try and sell my house) they got me 4 viewings in the 12 week contract I had with them.
They listed me on rightmove but that was it.
In this day and age it seems crazy that all estate agents don't make better use of the online portals available to them.
After the initial 12 week contract I used an online agent who saved me a tonne of money, listed me on all the major property site and got me 10 viewings in the first 2 weeks.
Instead of everyone slagging each other off, isn't it time "traditional" estate agents got with the time and start to make use of the online market
Just look at your local high street and compare it too 10 years ago. Many shops are now empty as they can't compete with the online market with the cheaper costs.
You can't compare estate agents to travel agents. How many people visit and view a holiday destination and hotel before booking
We put an awful lot of store on 'local knowledge' so, honest answers please, do you really know every street and locality in your area like the back of your hand. What about the agent in the big city centre offices what about the agent who works 20 miles from where he lives
Ever heard of the internet in this day and age someone from Australia can know as much about the area you operate in as you do within a few minutes. So let's all cut the crap and stop banging on about how important 'local knowledge' is in our ever shrinking planet!
Well said Tom Webster! Slagging off each other all the time doesn't help any of us.
You talk about "talents and skill" Simon and "local knowledge" Richard. Very soon there will be more than a few online agents who have been working in their areas for a long time, have good local knowledge and a personal sales record that many people know about. They will trade on their reputation online. There will be increasing numbers of NAEA qualified online agents and very soon we are likely to see the first RICS members working in a similar fashion. There is every reason why these more professional models will work well. At the end of the day, the only thing they and the high street agents won't have in common is ability for face to face contact in the office. As a great believer in traditional agency, I am sure there will always be the demand for well run estate agency, as long as there are still shops on our high streets.
It is pretty fair and balanced and i agree there is a place in the market for online and certainly online agents should not be excluded from property portals or industry bodies. However the cut price approach just doesn't, on average, yield the best result for clients and it will remain a niche market, albeit a temporarily growing one, for that reason.
Oh please, when is an online agent going to stop trying to sell their services as comparable to the traditional Estate agent, hidden behind the 'Lower overheads' slogan!!! So what are those lower overheads Well they desperately want consumers to believe it is all sorts but in fact it is only One! The high street office cost, that is the difference! So let us put that theory to bed then shall we High street rent example 25,000 pa against 'Bedroom' or best case 'serviced office' at 12,000 pa, gives us 13,000 difference divided by the average sales pa by a high street agent of say 150 properties, this equals 87 per property! So are we talking 87 per property being the whole difference between us No, of course it is not.
It is not rocket science to know the real difference is staff which equates to service, but they do not want to advertise that as their strap line, imagine this
'Save on estate agent fees by dealing with a computer, talk to someone, if you can get through, with no experience and if you have a problem with your sale Don't call us because we won't have a clue either!'
This is not harsh, it is the truth and to try and say volume is the answer is another smoke screen because this is my other fact!
Even the best agent, that has knowledge and deals with all aspects of a sale, that the owner expects, are not bionic and can at best deal with 30 sales at any one time over a 12 week cycle and that is a 50 hour week for best part of 40- 50k per annum! So allowing for the national average of instructions that don't sell for one of many reasons, of 30% that leaves an overhead per property alone of (30 props less 30%=21 x 4(12weeks x4 to give full year) =84 divided into 45k salary =536 per property) and they don't work alone, they need phones, a car, advertising and up pops the other monster costs of Rightmove and Zoopla! I rest my case put could go on for hours!!!!
So an online agent puts across a fair, balanced, rational viewpoint and he's still jumped on by the people commenting below the line, as well as being criticised for a couple of spelling/grammar mistakes. How mature. Certain traditional agents just seem to dismiss the online model too readily. I think Webster makes some very good points - competition is good, it helps to prevent complacency because people (or in this case estate agents) have to up their game. He also says he doesn't think online and traditional should be at each other's throats, the tedious mud-slinging should stop, which seems perfectly rational to me. Why can't the two models exist alongside each other Just completely dismissing the online model makes traditional agents come across as scared.
yawn, it's like paying to put your most prized possession in the local cornershop's window. yes it will save you money in the short term, but when you undersell it massively it will cost you tens of thousands of pounds. Are you better off no. So you've saved yourself an agency fee but had to do all the work yourself and lost tens of thousands of pounds! Great result!
Estate agents are not very similar to travel agents, travel agents don't negotiate the price between the parties. The odd thing is that all these articles about online agencies miss the most important point, which is great estate agency is as much talent and skill as it is marketing and administration. This talent and skill will never come cheap, arguably, as with most things, you get what you pay for and even on the high st often the best agent charges the highest fee, arranges the most sales and has the lowest fall throughs.
So how about an online agent that lives locally in every town or city, therefore having local knowledge yet charging a lower fee saving the client thousands of 's in fees....www.redhomes.co.uk
I would "of" thought that he "lead" the way in poor English as well as poor service. Online agents are nothing more than an advert on the internet and can't be compared to real agents that provide a full service