The former chief executive of Emoov says online estate agencies charge too little, so risk appearing cheap and ineffective to potential customers.
In the latest of a long series of interviews with property consultant Chris Watkin, Russell Quirk - who has now founded a PR firm - says that when he started Emoov in 2010 its fixed rate fee was £295; by the time it went into administration at the end of last year that figure had risen to £895 but, he says, may still have been too cheap.
“There’s a psychological belief” he told Watkin, “that if something looks too cheap to be credible … then it’s not credible.”
Quirk particularly questioned the strategy of Doorsteps, an online agency that charges £99 as a basic fee: he said it can cost well over that sum to list a property on Rightmove and Zoopla for six months, and he doubted whether even with referral fees or other indirect income such a pricing policy can be sustainable.
Referring to the online sector’s low-price strategy overall he continued: “It’s not only questionable from an economic point of view, there’s no need … People are suspicious of it. It’s too cheap.”
Quirk said he doubted whether online agents should try charging the same as High Street agents, but he did repeat a statement made towards the end of his tenure at Emoov, saying that the agency landscape as a whole was changing.
“There will be different fee propositions [from agents of all kinds]” he said. “We’re seeing some High Street agents doing fixed fees, some High Street agents doing £695, £795, £895 rates naively to try to compete with Purplebricks.”
Quirk - who admitted he was completely wrong with predictions some years ago that online agents may take as much as 50 per cent share of the market - now says it is possible they may reach 10 per cent by the end of this year and 15 per cent ultimately.
But he appears to suggest that it is unlikely they will go beyond that level in the foreseeable future.
You can see this latest video below.