"There’s a chain of four happening and we are selling something at £1.5m at the top, but the online agents are failing to chase the sale of the flat at the bottom of the chain, causing a stand still for everyone involved” says Rupert Lawson-Johnston from Strutt & Parker.
“I have stepped in almost undercover to help the solicitor of the flat, as at this stage it is imperative that the sale is progressed. With the online agent there is no one to call, no person who is motivated to help because there is no commission structure. I think it's going to be one of the biggest problems in our industry going forwards” he adds.
James Robinson, general manager at the Lurot Brand agency in London, says: “The owner of a mews house in W2 was advised by a well known on-line agency to market their house with them for a totally unrealistic price, which completely stalled the marketing for over five months. The owners became extremely frustrated with the lack of contact, advice and activity the agency were producing, so they sought our professional advice.”
The Sunday Times piece also relates how Christian Warman, director of newly-launched Tedworth Property Group, experienced at first hand a problem with viewing a property he would to buy that was being marketed by an online agency.
“I wanted to make an offer and was told I had to make it online. I asked for guidance from the agent but she didn’t know the client or their circumstances. Nervous of-overpaying I made a very low offer online but before the offer was submitted they tried to sell me add-on services (conveyancing, insurance, mortgages, surveys etc) which I suspect are where they make their money.
“The only feedback to the offer was that it wasn’t high enough and would I like to increase it? There was no negotiating, no coercing to make an initial offer, no enthusing to make a (higher) offer, no confidence or reassurance given to make a (higher) offer. It was a tick-box exercise on a website, a bit like buying something on e-bay. I lost interest and didn't make a higher offer and that was the last I heard - the call centre located hundreds of miles away called about two months later to see if I was still looking but knew nothing about the property I viewed or whether it was still available” he says.
A Purplebricks statement, quoted in the Sunday Times piece, says:
“It comes down to reputation and word of mouth. You need to earn a good reputation in the local market in order to build a sustainable business. ... If you’re a traditional agent you’re going to throw a bit of mud aren’t you? We’re giving people an alternative to the old costly structure of commission.”
It then adds: “It is no coincidence that since Purplebricks has been in existence the average commission rate charged by traditional agents looks to have reduced. More telling than their criticism is the fact that many are now trying to imitate our model.”