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An estate agent has produced fascinating data comparing the success rates of the traditional and online agencies in his area - with vendors chooisng to sell online losing out badly to those selling through mainstream high street offices.

Chris Wood, who runs PDQ property in Penzance and Helston, describes himself as not being anti-online agent, and in his latest blog says he has flirted with adopting the idea himself.

However, using ZooplaPro to analyse the market in the west Cornwall area he has compared the performance of the most active online agent selling in the area with traditional rivals, including his own firm.

- Zoopla shows 5,105 new instructions in the area since January 1 this year, of which seven were online sales properties using the online agency under analysis - that's a market share of 0.14 per cent.

- The online agency also has 11 properties currently on sale with an average time on the market of 22 weeks - lower than the area average of 27 weeks, which of course includes all the properties on sale locally through traditional agents.

- Of the 11 properties on sale with the online agency, 64 per cent have been for sale for 20 weeks or more and 18 per cent for sale for 40 weeks or more (with some of these having been instructed in 2013).

- However - and this is critical in Wood's analysis - the online agency has sold only two properties this year, which is a 29 per cent success rate against their new instructions this year, but only an 18 per cent success rate compared to the agency's total register including instructions dating back to 2013.

- In contrast, the average sold rate in the area for all agencies - the vast majority being traditional high street agents - is 60 per cent. (And for PDQ, Wood's own firm, the figure is a highly commendable 79 per cent).

All of this 'proves' nothing of course, and the sample is statistically and geographically small.

But Wood's view is that this one-off analysis shows that for the vendors of the unsold properties on the online agency's register, there has been no saving of the kind that online supporters advocate - indeed, the vendors have paid non-returnable up-front fees, so have actually lost money which would not have been spent had the 'non sale' been through a high street agent.

Wood's full blog also compares sale prices between the online and traditional estate agents using comparable properties, and is a fascinating read that is likely to rekindle the debate over whether online is the way forward for agency and sellers alike.

If any other agents have undertaken similar analyses, please do let us know at Estate Agent Today.

In the meantime, the full-length version fo Wood's blog can be seen on www.pdq-estates.co.uk

(With thanks to Chris Wood for his cooperation on this article)

Comments

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    (+ Vat) Compared to A High Street agent that doesn't quote their fee at all....and 99.9% of the fees would be + Vat...extremely week point my friend who is remaining anonymous.....

    Why don't High Street agents quote their fees.....because they try to get away with as higher fee as they can depending on the vulnerability of the potential client...if that's not the case advertise your fees!...its called being transparent and not misleading my friend.

    • 11 November 2014 20:09 PM
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    If your business doesn't sell/ let enough property to take it above the VAT threshold, it doesn't have to pay and cannot reclaim. In the case of an online agent charging, say, 500 upfront this would mean they are expecting/ have less than 162 customers per tax year
    Here's the HMRC page if you're interested [url="https://www.gov.uk/vat-registration-thresholds"]https://www.gov.uk/vat-registration-thresholds[/url]

    • 11 November 2014 12:49 PM
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    Hi Paul
    No offence taken, the reason I did these figures is out of genuine professional interest. I like to know if certain online claims are as good as they make out as, like you, I want to ensure my business is offering great value for money whilst remaining profitable.

    As I said in my blog, I have looked at the online model myself and have always concluded that you cannot provide a level of service that I want to provide to my customers at an economical scale. That's not to say online agents don't have a place, I think they do, however, the claims they make about money saving and efficiency very clearly do not stand up to scrutiny in my area.

    • 11 November 2014 12:44 PM
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    Because 0.75% + VAT is actually 0.9% to the seller..a bit misleading
    http://www.estateagenttoday.co.uk/1572-ruling-means-agents-must-quantify-vat-on-fees

    • 11 November 2014 12:40 PM
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    Hi Y'all..

    I think it is actually great that Chris has taken the time to compile these stats. After all the PR guff of the last few years sent out with little or no supporting evidence but trumpetted from the roof tops by most media sources (LAT especially) it is nice to see some context. There will be agents that have lost business in so,e areas due to this hype and this shows other agents how to professionally contest this. Running and building a company is about far more than just 'maximum sales' it's about establishing yourself as a professional in your market and Chris, yet again, has done this in spades.
    What I continue to find strange is how agreesive and vindictive we are to one another in this agency. Non-showroom agents insists showroom agents will go bust, online-only agents insist all full-service agents will go bust, rant, rant, bite, bite. Although we are in a competitive market place and are all striving to increase marketshare the fact is different clients want different things. Some are happy to use cheap and do most of the leg work themselves. Others are happy to pay top-market fees for a full comprehensive service and also like the 'pretige' of a major brand.
    I have always thought choosing an agent is like choosing a car- you can buy a cheap banger for 200 that will get you there (but only just) and after a while it breaks and you throw it away. There is a vast range of mid-market cars that do everything from practical elements to fun/exotic types but for good value and then there are the ferraris & rolls royce's of this world. The truth is, they all the the same thing but the experience is different....as is the price.
    Cant we all just learn to get along a bit Support one another when we do something good but, if you dont stringy disagree with something, then just keep quiet and accept its a case of 'horses for courses'!

    • 11 November 2014 12:04 PM
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    Most franchise's do charge Vat some don't....why

    • 10 November 2014 22:47 PM
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    Kristjan, I am not upset with Chris, nor am I one of his on line local agents, I am merely saying that he should be devoting all of his time on looking at ways to increase his business and fee income, rather than worry about on line statistics that clearly take a lot of time and do not earn anybody any money, I do ask 2 questions Why and does anybody really care

    • 10 November 2014 16:57 PM
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    Question for Richard Spiller does 0.75% include VAT or not

    • 10 November 2014 09:03 AM
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    Rumour has it that this fictional online business its worth around 67m fictionally of course. Their fictional investors are delighted and happy to value a fictional business at 1,000,000 times profit. ;)

    • 07 November 2014 20:01 PM
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    Kristjan....Red Homes are Franchised Hybrid agents and the majority have a fee of 0.75%....The High Street agents know you don't need an office to sell a property and the pure Online only know they cant provide the service of a high street agent...BUT a Hybrid such as Red Homes can provide both the service and big savings in fees. I have been trading for 10 years now selling 90 -100 properties per year, best month 19 sales this all from working from home covering my local town.

    The high street days are numbered....any estate agents wanting to join Red Homes, be your own boss and earn 80-100kpa working from home...feel free to email info@redhomes.co.uk

    • 07 November 2014 18:42 PM
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    Hi Kristjan and everyone else.
    Thanks for the positive comments on here. As Kristjan has said and I make clear in my full blog "[url="http://bit.ly/1x6A2x8"]Online agents Big savings or, paying up-front for failure[/url]" the piece is [b]not [/b]aimed at online agents or hybrids. What it was written to do was to investigate the claims of alleged money-saving and, as some agents have claimed, that they are just 'better' than high-street agents. Nor does my article try to claim these statistics would be replicated nationally, in fact, I make it explicitly clear that they almost certainly wont in some areas.

    Again, for those who haven't read the full article, I urge you to do so, as you will see that I include all of my statistical reasoning and, make it clear where my sample comes from and, that it can only relate to that sample (i.e. it wont necessarily replicate regionally or Nationally).

    What [b]is [/b]fascinating, is that the same agents who have engaged with me so willingly at great length on Twitter about how their business model is better for the consumer, have been so very silent when faced with some hard evidence that, in my area at least, their claims are shaky at best.
    Chris

    • 07 November 2014 17:36 PM
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    ZooplaPro only provides data on property listed on their site, so Zoopla does not represent 100% of the market. Whilst very interesting the stats are flawed.

    • 07 November 2014 17:13 PM
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    A great piece by Chris (one of my favourite agents out there) who has decided to take the time to cut through the hype and ill-researched posts of the past and actually look at the local area. I am not sure why this appears to upset Paul so much- you're not one of his local online agents are you
    Also, people instantly get very defensive over the term 'online agent'. To me (and I think I speak on behalf of Chris here too) this classification is not whether or not you have a showroom/sales office but whether or not you offer a hands on service. To me, an online agent charges a low, upfront fee, for a remote service done predominantly online with very little human contact or local expertise. I dont have a showroom, but I certainly wouldnt consider myself an 'online agent'.
    As for Richard, looking at the Red Homes site (although fees are not stated) you, like us, are not an 'online agent' you are just a 'showroom free' agent. If you really have delieverd those results then Chris's article should isnpire you to research and write a similar article (from your perspectove) to put on your blog. If you are maintaining those sorts of stats- shout it from the rooftop.
    For such a detailed and concise article though I am somewhat surprised by the instant 'bite back' from many agents. At least this article is based on facts and NOT the PR departments seemingly responsible for just about every online agent article to date.

    • 07 November 2014 16:30 PM
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    Great Blog Chris - well said. That fictitious agent is probably worth at least 100 million by now. ;)

    • 07 November 2014 15:15 PM
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    It seems to me that Chris Wood has got too much time on his hands, perhaps he should devote more time to looking at his fee income!!!!!!

    • 07 November 2014 13:47 PM
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    We are a non-retail based agency. Our instruction to sales ratio has been higher than all local agents since we began five years ago. Oh, and our fees are higher than our high street competition. The press and this website, should stop bundling all online agents into the same basket. We have never competed on price, but on service and that's why we charge more and sell a higher proportion of our stock. 'Online agent' doesn't have to mean cheap, upfront fees or lack of service.

    • 07 November 2014 11:09 AM
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    Thanks John. I'm sure that figure will vary but, as far as the research I have done is concerned, it's bang on for my area.

    • 07 November 2014 11:03 AM
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    As I say in my blog, different parts of the country will undoubtedly show different results. Any agent who has access to ZooplaPro and Nethouseprices/ mouse price etc can reproduce the same stats for their area as I have with a little work.
    What is clear is that headline figures do not always show the full story and, as has been said on another forum today, online agents who boast about savings should be required to include the losses of those customers who did not sell as part of their calculations

    • 07 November 2014 11:00 AM
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    Great blog Chris and 0.14% sounds more accurate than the 2-5% usually quoted!

    • 07 November 2014 09:29 AM
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    In my town in Hampshire we have successfully sold many properties online agents couldn't to local people and got on average 4700 more per property!

    • 07 November 2014 09:12 AM
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    Perhaps you should do you stats in Honiton, Devon where Red Homes(online agent) has outsold all high street offices for the last 9 years....selling on average 90-100 properties per year in a small market town.

    • 07 November 2014 07:49 AM
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