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The Economist says estate agents will survive in an increasingly-digital landscape because of local knowledge, their help in arranging everything from viewings to finance, and their ability to drive a hard bargain - but they must use more technology.

An article in today's edition says in some parts of the United States agents are so afraid of technology it's as if the internet had never been invented. The piece then explains how prospective buyers pop by branch offices in person to pore over printed floor-plans, while fax machines cough up contracts and viewings are set up by telephone.

The thrust of the article is that the internet has, in most other businesses, succeeded in cutting out middlemen. And of all the middlemen it should have wiped out by now, estate agents are among the least popular.

It says that this is especially so in America, where realtors charge sellers around six per cent commission - but it notes that even with these relatively high costs, only nine per cent of home sales in America are conducted without an agent.

The piece makes a reluctant nod of respect at British estate agents for holding their ground, and for aggregating property portals faster than in the US and other countries.

As in America, there have also been various attempts by online businesses to cut out the agents and link sellers directly to buyers. But, again, the [British] agents - who typically charge less than 2% commission - have held their ground it notes.

However, The Economist says estate agents' chances of fending off competition will be stronger if they use the internet and information technology to become more responsive, efficient and cheap.

It then goes on to say how new US services being launched arrange buyers' viewings instantly and without having to speak with an agent, while online agencies are making inroads in international lettings markets.

The chances are that estate agents will still be around a generation from now it concludes. But the agents most likely to survive the threat from cheaper alternatives will be those that make the leap into the internet age.

Comments

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    I provide virtual tours to estate agents. Now not the usual type but the next generation.
    Many agents still refuse to give me the time of day to allow me to show them the difference.

    • 30 November 2014 04:13 AM
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    @P
    I do apologise we are not the future of estate agency ...we are in fact estate agency TODAY for people with half a brain who wish to save potentially thousands of 's in fees....You are right on one point...its not about the website, its about the person(estate agent) providing a great service so word of mouth spreads...hence the 800 sales in 10 years from my study.....

    • 28 November 2014 17:41 PM
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    Many high street agents will not change their ways, I have proof of this, they are happy with pen and paper, the Hybrids will win the day I am positive and we are here to help them.

    • 28 November 2014 15:57 PM
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    @ Richard Copus

    I'd have to agree with Laurence on this one. The most successful agency in my town by a long shot is what you might describe as 'bog standard'.

    At first glimpse there appears to be nothing distinguishable about them. They sell all types of property, have half-decent marketing, standard fees and reasonably good staff.

    The reason they are so successful is due to word of mouth, lots of boards, 20 years + of local market knowledge and also . . . luck.

    @ Richard Spiller

    Although some have undoubtedly achieved a level of success, I've noticed that a lot of the hybrid agencies don't tend to take on a huge amount of stock. I know it takes time to become established, but I can think of a local 'hybrid agency' that are proof of this, as well as several others that i've come across online.

    I was mootching through the website of a hybrid estate agency based in the south of England recently, and the website itself appeared to be very impressive. Colourful, attractive, informative and full of comments on the market. Then I looked at the properties available page. 6 properties available.

    I've noticed more and more of these trendy new hybrid agencies who seem to be offering more style over substance for reduced fees. Being able to tweet and having a 'cool' website does not sell property.

    If I have to read one more statement from an online/hybrid agent claiming to be 'cutting edge' or 'the future of estate agency' I think I will scream.

    • 28 November 2014 13:02 PM
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    @ Richard Copus - Why would agents which advertise "Free Valuations" be more likely to close than those that dont I understand your points about niche marketing however in large parts of the uk companies simply wouldnt survive by using that tactic. Your last paragraph seems insulting to general agents, some of which are excellent.

    • 28 November 2014 10:20 AM
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    Also niche marketing, something which has not really taken off over here because British estate agents are conditioned that they must take on every property that lands on their laps and that turning property away is suicide. Also learning from other industries by diversifying and opening auction departments or divisions specialising in particular types of residential property. It is the agents who are the experts and specialists who will survive. The bog standard high street agents who splashes their window with "FREE VALUATIONS" and cannot provide a personal and professional service will be the first ones to go.

    • 28 November 2014 09:34 AM
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    Hybrid estate agents are the future...local knowledge, same service as high st agents - but with no expensive shop. = Lower fees = happy customer!....having sold over 800 properties working from my study over the last 10 years can anyone disagree.....Red Homes franchises are available if interested.

    • 28 November 2014 08:36 AM
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