The website of the consumer group Which? is asking for readers’ experiences as to which is the better choice - using an online estate agent or a traditional one?
In a carefully balanced call for responses, Marie Kemplay of the consumer group’s money research team canters through the customary price comparisons but also writes of the different service levels offered by the different agency types.
“A good high street agent would probably say they more than earn their fees by the service they offer you. Any high street agent really worth their salt will know the local property market inside out and will be able to share this insight with you.
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The big question any media publication should ask of online agencies, especially hybrids, is " How many hours of work will you devote to the sale of someone's home?" There is a general assumption in the media that, for a fixed fee, online agencies will do whatever it takes to achieve the sale. This can, in many cases, involve an artifically low valuation in order to achieve a quick sale, or pressure on the vendors to accept the first offer that comes along. Online agencies, by their very business model, cannot devote the time to developing the relationship, presenting the home in the best possible way, negotiating better offers, or having the patience & determination to solve any problems that may arise after an agreed offer.
A fixed fee, whatever it is, is no way to sell a home. High Street agencies aren't always as good as they should be, but the alternatives are only for 'lazy-thinkers' that fail to grasp the impact a fixed fee will have on the process.
Time is something that we intrinsically value, since it is finite. Money may be be less valued since its worth is relative. So, let's focus on how much time 'traditional agents' devote to selling any home and less on the fee.
Chris, if you have an axe and I have a chainsaw, it will take me less time to chop down more trees. Equally I will beat you from London to Brighton if you are on foot and I have a bike. Increased time spent is no measure of value or performance when it comes to selling anything.
What clients want is an effective service and this can be down to an individual's skill and talent as much as slick marketing and presentation. The big problem with branch based businesses is where you get a big chain, the brand is uniform but the service is not.
Most Vendors are not very discerning when it comes to choosing the best agent to sell their home, for now at least. Most initially go with the one with the most local boards, or the one they are buying from, or bought from.
This means the majority of new instructions go to market leaders, it then falls to the competition to pick up what doesn't sell and the leftovers.
Given the great variance in service on the high street many vendors may see selling as a lottery and could be seduced by a cut price do it yourself service, or even by the implied efficiency of a call centre and the Internet.
For me, having been in the business 27 years, I can see the biggest driver of change is higher levels of customer expectation. People these days want and demand more for less, they are used to instant gratification and the efficiency of machines.
The key to real success in the future will be to combine this ruthless efficiency and value with an effective service that also makes money. I think the tools are there to achieve this and high street agents should be rightly concerned
Simon, as always I very much value your opinion and agree with much of what you say. However, "increased time spent being no measure of value or performance, when it comes to selling" does convey a sense of mediocrity. It takes more time (apart from the components) to make a Rolex than a cheap watch and people will always value that, regardless of whether they can afford it.
I tend to disagree that the biggest driver of change is higher levels of customer expectations with people demanding more for less. I believe the expectation level from vendors when choosing an agency is pretty low and unfortunately many agencies are happy to provide that service. An effective service is not a remarkable service and simply gets the job done. Can vendors not be inspired rather than manipulated in their choice?
To move vendors away from their perception of estate agents being a commodity will require differentiation by individual agents and the tools to this are more down to earth than currently being touted.
Humans have an innate desire to share community, values and beliefs that foster trust. Ruthless efficiency from machines might well work in a factory setting, but I believe that vendors need something more - someone that cares about the outcome and who is not just in it for the profit.
There is, of course, a demand for the alternative and I am happy that vendors now do have choices. However, I remain firm in my view that time does have a bearing on the ability of an agency (online or traditional) to perform at its best.
You do have, Simon, the advantage of many years practical agency experience and I am always eager to embrace the practical rather than theoretical. Appreciate your views.
The thing is Chris a Rolex is not a service and a classic example of a product led business where quality is tangible not intangible. Let me put it this way, before the Internet, vendors had no other choice than choose a local high street agent and the service they got was variable to say the least, from excellent down to the opposite. Now however there is the option of a nationwide internet based service, the quality of which is much easier to make uniform. These businesses will, like any local business, strive to get the best, the problem comes when they become better than 80% of the local market because, instead of scooping the local market they scoop the national one. Of course how big the national market is for online is the question, are we looking at a few early adopters and a loss of long term interest, or are we seeing the birth of a new paradigm, we shall have to wait and see
high street agents currently have 64% of the vote, should be higher but that's what i like to see going into the weekend!
You're right, Simon. Rolex was a poor example, dreamt up before the caffeine had time to kick in. How about UBER, the online taxi service that has recently dropped its fixed fee fare from Central London to Heathrow? They now rely on the traditional mileage plus time charging structure. Just as taxis shouldn't base their fare simply on distance and charge a fixed fare so fixed fee online/hybrid estate agencies might also have to consider the implications of a service that has variable input of time. For example, if the entire process from creative promotion, enquiry handling, gaining the instruction, servicing the client and progressing the eventual sale normally takes, let's say, 20 hours of combined effort, a £1000 fixed fee will generate an hourly rate of £50. However, if the agreed sale hits a problem and it takes 25 hours to complete, then the hourly rate achieved has reduced to £40. Bear in mind that the hybrid agencies are splitting this hourly rate with the local expert and whilst their admin costs will undoubtedly be covered, the issue will always be in attracting and more so retaining talented agents to service the potential vendors.
Sorry to waffle on, but my issue isn't with the online or hybrid business model, its with a fixed fee for a variable time service.
And, my issue then becomes if problems do arise, will the vendor be manipulated simply in order to facilitate a completed sale within the budgeted timeframe? I appreciate this might also apply to high Street agencies. Integrity is key, but with a higher fee in the pipeline, the temptation to apply pressure may be reduced. I don't know??
Final point is " when online becomes better than 80% of the local market". My response would be that if the local agents allow this to happen and can't or won't devise alternative ways to create community loyalty, then online will, indeed, eventually win the day.
Local agencies have so many advantages over technology yet act like the proverbial rabbit in the headlights. Online grabs the headlines but the high Street needs to learn how to build their own media business.
It's hard work, but build an audience of loyal followers and the horizon can suddenly seem brighter.
Chris, it's not about time or fees, it's about perceived effectiveness and convenience
I agree, Simon, it shouldn't be about time or fees, but the latter does seem high on most agendas. Quite possibly, the online phenomenon will be the making of the the high street sector, allowing the best (not strongest) to survive and providing the remarkable service to which vendors are entitled. Not sure this fits in with the convenience aspect. I am all for vendors making more of an effort, not less.
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