Say "online estate agents" and property people retreat to their trenches, for or against, quicker than I can do a Google search using 4G.
As a journalist I'm agnostic but I must say they - online agents - have a frankly odd fascination with cost.
Instead of emphasising flexibility, simplicity and modernity, they invariably drop the debate to one of price. Do they not know that 'cheap' does not equal 'good'
Their emphasis on costs appears to me to be mistaken on two fronts.
Firstly, they risk creating the scepticism that has built up towards budget airlines.
Book a Flybe or Ryanair seat online and the headline price is indeed bargain basement. But add what the airlines call extras but the rest of us call necessities - luggage, advance booking, priority boarding and that little essential called eating - and you find the price is....well, not quite that of British Airways, but still not as cheap as the advertising led you to believe.
Some online agents risk the same with the extras they charge for - what many seasoned house sellers would regard as essentials such as a professional valuation, for sale boards, an infrastructure to arrange and accompany viewings, and so on.
The combined cost will not be two per cent of sale price, but may still leave a nasty taste in the seller's mouth when the amazing headline figure that attracted them has been multiplied many times over.
Secondly, online agents miss the point by saying that traditional agents are actually expensive to begin with. My research for Estate Agent Today shows that in comparison to many other countries, Britain's estate agents charge relatively little.
That may not seem the case when a seller says goodbye to £10,000 after selling their home for half a million, but in relative terms sellers already get a bargain with the agent. It's the stamp duty and other costs where the bill appears less justifiable.
Onliners could, instead, emphasise that in return for the two per cent commission, a seller still runs a risk of getting poor service from the small number of less-good traditional agents. There are fewer of these now than ever before in my experience, but we all know of high street agents ones who rarely accompany viewings, use under-prepared weekend staff or put only cursory details on the major portals.
That sort of performance is fair game for criticism. But criticise their cost No, that's not really the point.
Surely onliners' USP is that they offer flexibility for buyers to register without schlepping into an office on a weekday when, in any case, most purchasers are at work
And couldn't an online agency surprise us by saying it will use only highly trained staff - perhaps better than those you sometimes encounter at old-school agencies
In other words, what about putting the emphasis on quality, not cost, in a business which is already good value when compared to, say, the legal profession
This is what happens in the US where realtors in some areas have - for years now - operated without physical branches, instead using home offices and their cars.
They do this not to score points off the traditional agents but to emphasise the speed and efficiency of their offer - to give a choice to would-be vendors.
In fairness, a few of Britain's new online agents appear to be taking this higher road.
I was struck in a recent interview at how easyProperty's CEO, Robert Ellice, very sensibly said there was a lot going for the traditional estate agency business model.
He recognised that online agency was not going to handle all sales in the future and acknowledged that 'cheap' didn't necessarily mean 'good'. But he did say, rightly, that many people want to register their interest in buying or selling outside the hours of 9am to 5pm on weekdays.
If other onliners took a similarly enlightened view, the debate would be lifted and everyone could spend less time in their trenches. And instead, spend more time selling homes...
*Editor of Estate Agent Today, Graham can be found tweeting about all things property @PropertyJourn.
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Comments
It is the same with online letting agents, alot of them seem to focus on only price. e.g. find a tenant for 50 advertise on all the portals, no focus on quality or the back end process of renting, tenant selection, application forms, tenant verification, inventory reports and tenancy forms. I was recommended to use an online letting firm called www.rentdirectuk.co.uk, they focus on the whole renting process, it was so useful that apart from conducting viewings I could do the whole renting process through their website. I was able to send out tenant application forms and even did inventory reports and background checks through their website. Will use them in future and recommend it to small landlords ohhh and it so happened they were cheaper than high street agents.
When I relocated to Birmingham in 1983, while I was there the local Sutton Coldfield paper decided to take on the local agents with a combination of cheap direct advertising and some agency services. They did ok for a while but eventually conceded. When I moved back to London they were still going and because I was so appalled by the laziness of the local agents I chose them to sell my property.
However it was not a cost issue as my company was paying the fee so I choose their no sale no fee option which was no cheaper than the local average. They sold my property fairly quickly, I can't remember if they did the viewings but I remember thinking they did a pretty good job, however the market was fast that year so in reality they didn't have to try that hard.
So really, online is not such a new concept and the challenges have all been grappled with before. In a fast market online will perform ok and will vie with average traditional agents, great ones will always be worth their fee because they will achieve faster more reliable sales that are less likely to fall through.
The challenge for in liners will come when the market slows. History shows they will accumulate unsold, unlet properties fast and that their customers will defect back to the traditional agents. Of course online is here to stay but as Graham hints, to provide a quality online service is not cheap and nor should it be.
For anyone interested, I wrote a report in 1991 on the subject of how to choose an estate agent http://choices.co.uk/how-to-choose-an-estate-agent enjoy!
The thing that everyone conveniently forgets when looking at the issue of fees is that the high street model is based around successful sales covering abortive costs, (free valuations, properties that do not sell, fall throughs etc) Therefore high street agents do NOT offer value for money for an individual client,as they end up paying for those that do not sell!
With the online model, at least the client knows exactly what they are committing themselves to, even if they do choose 'added extras' in their package.
Perhaps the online agents are the agents where the public get what THEY pay for!
And before anyone asks, I'm on the high street.
Good article, Graham. You make some very valid points. Like you, I think the emphasis should always be on quality not cost. Online agencies bang the drum that their much cheaper, but if its at the cost of good quality service then is it really worth it.
Rather than being an either/or scenario when it comes to online and traditional agents, I think will eventually have something in the middle. This is already happening to an extent, with almost old-school agencies having websites, a presence on social media, virtual tours, listings on Rightmove and Zoopla, etc.
Instead of trying to constantly denigrate the traditional model, the online agents should acknowledge the strengths it has and work on ways of highlighting how they offer an alternative service. The constant bad-mouthing between online and traditional agents can get a little tedious why cant both exist alongside each other, allowing people to make the decision
I don't think you've 'got it' Graham. Like many high street agents don't 'get it' and many journalists haven't 'got it' over the years (they seem to be just about getting it now however!)
Of course, the fees are important. But we started out 8 years ago to [i]improve[/i] the service to our vendors. That included in terms of coverage, presentation of properties, and service offered by me and the teams that I have.
And we did that. We were doing virtual tours and floor plans on our own bespoke software, 7 years when lots of agents were still using paper diaries and 'applicant cards'! We advertised on every single property portal we could list on to get our clients maximum coverage. How can that be perceived as poor service when most high street agents weren't even doing a floorplan! So we were offering all of that extra service, but at fees of 400 (at the time)!
All that's happened now, is the portal market has consolidated to being just two portals with all agents on there now, and high street agents (still not all of them) have started to realise that customers want floorplans.
Now what you have, is very little difference in service or perception of service, between high street agents and online agents. It's value for money that people are recognising. We are offering the same service as a high street agent, but with a saving of 75%.
But then to top that all, the technology we use gives the customer a better experience (an experience they expect in this day and age) than they have experienced in the past on the high street. But the high street agents will catch up on technology, eventually. But by then, it will be too late - we will have already made our mark and 'online estate agency' won't be called online estate agency anymore - it will be called estate agency (which is what it already is)
Disruptive models generally undercut on price, but improve the experience. Why wouldn't someone want that
Graham. Good article. With respect to your research showing that in comparison to many other countries, Britain's estate agents charge relatively little, isn't that like comparing apples with pears
What interest does the UK consumer have in how much they would pay if they were selling in Germany UK consumers are dealing with the here and now in their own marketplace and are getting increasingly well informed about the costs of dealing in property in the UK market relative to price, standards of service and technology.
Every estate agent is an online agent nowadays whether or not they operate from a high street office or a business park. The argument is increasingly being confused by the current noisy debate about what agents want. Surely, in order to survive now and into the future, all property agents should be more concerned with what the majority of their customers want - value for money. It is up to the consumer how they define that and not for property professionals to dictate it to them.
Graham is right. It's not all about the low fee. However the online sector had to grab the consumer's attention initially and this was done using price.
As far as eMoov.co.uk are concerned, the customer service differentiation aspect started some time ago and we certainly set our stall out based on our demonstrable record of customer care as can be seen on the various review sites. Our website makes that clear. Our satisfaction rating is 94% plus and compares exceptionally well to high street agents.
The battle for house sellers is therefore not about price. Or customer service. Or relative performance (our percentage of asking price achieved is higher than the average UK agent). It's not about technology.
But it's about ALL of these things.
Graham, you, the online only and the high street agents have it wrong....the online only agent will work for people who are confident in the house buying/selling transaction. Lets take a Red Homes Franchise, he/she is the owner of their business, so service has to be very good(otherwise the business wont last)...they work from their home saving thousands of pounds in unnecessary overheads.
The savings are passed onto the seller via lower fees...seller is happy!!
Property is advertised online and in the local papers, viewings are carried out via Red Homes.
Buyer is found, Red Homes see it thru to completion.
It really is that simple.