Online agents — how worried should the high street be?

Online estate agents angle themselves as the cheaper, slicker alternatives to their traditional high street rivals. However, with properties listed through online agents only accounting for roughly 5% of property sales (according to consumer rights group, Which?), how much of a threat are they to the traditional agent?

Service

The services offered by the likes of Purplebricks, Tepilo, Emoov and HouseSimple are familiar to anyone used to a traditional high street agent: an online agent will value and market the property, arrange viewings and will typically accept and negotiate offers on behalf of the property owner, liaise with the conveyancer and purchaser until completion of the sale.

The differences

Despite the familiarity of the service, there are some key differences in the way online agents operate:

Fees: online agency fees are generally lower than those charged by high street agents. The way the fees are structured also differs, with online agents typically charging a fixed fee (ranging between £300 — £1000) that is paid upfront.

Viewings: online agents typically require their clients to conduct the viewings at the property.

Communication and admin: although an online agent will usually visit the property to take photographs and put together floor plans, contact between the client and the agent will take place via a web portal, email and phone.

Valuations: most online estate agents will visit the property to conduct a valuation. However, they tend to have a central network of valuers — these individuals will not necessarily have specific local knowledge of the area.

Advantages and disadvantages of online agents

Online agents entice sellers with their low fees — here’s a look at the advantages and disadvantages of using one versus a high street agent.

Advantages

The fees payable to an online agent are likely to be lower, especially for more expensive properties.

Online estate agents are open during the evenings and weekends, so they can deal with requests out-of-hours.

Marketing packages can be tailored to sellers’ specific requirements, with sellers being able to track the progress of offers etc. online via a portal.

Disadvantages

Online agents often lack local knowledge, meaning they may struggle to achieve the best sale price for their clients.

Not all online agents will act as middlemen, taking charge of viewings and communications with buyers, solicitors and other interested parties on behalf of the seller. Sellers may find the experience to be challenging, time-consuming and stressful.

Many online agents require clients to pay upfront and charge a flat fee. This means they have less incentive to get the best possible price for their clients and they are remunerated regardless of whether a sale is achieved or not.

What can high street agents learn from online agents?

Online agents excel at extracting information from their clients, by using things like online portals to consolidate property and seller details. These portals also act as the central hub to keep the seller appraised of the sale process, minimising the back and forth admin associated with high street agents.

Their rise to significance in the sector also demonstrates the increasing importance sellers place on value for money. If high street agents are going to compete with their online cousins, they will have to make sure their service, typified by their hands-on and locally-driven approach, absolutely justifies their higher fees. This might translate to high street agents having greater availability out-of-hours and more effectively deploying online services to streamline the sales process.

Avvoka is a cloud platform allowing estate agents to contract and communicate with their clients online. Visit www.avvoka.property to start automating your application forms, terms of business, tenancy agreements and deeds.