Comments on: Online estate agency – cure or virus for property professionals?

By: Andy King

Andy King — Thu, 16 Dec 2010 18:51:27 +0000

I think it is a cost v Revenue issue. If your costs are £200K per annum you need to get this in before you make any money. If your costs are £40K per annum you can afford to charge a lot less and try and capture a different type of customer.

By: Property Parrot The Low Fee Leeds Estate Agent

Property Parrot The Low Fee Leeds Estate Agent — Fri, 12 Nov 2010 21:56:17 +0000

Some interesting views in a debate that’ll go on for another year at least!
I had a look at the report listed above and was glad to see some issues highlighted I think are fundamental, and which I addressed when setting up my own ‘online’ estate agency for Leeds:

• ‘Online estate agents’ don’t undertake viewings
• Desktop or report based valuations often replace a visit, there is an emphasis on sellers setting the price themselves. (some advise getting quotes from local agents!)
• It is not always clear on their websites what is included and what the seller is expected to do – especially negotiations once an offer is received.

And these are major flaws for sites claiming to be estate agents, when really they are just ‘for sale by owner’ sites. They just require the services of Rightmove who only allow ‘estate agents’ to advertise, so simply change their business model slightly!

My company ‘Property Parrot’ addresses the fact that people want lower fees, and the issues listed above.

• I offer local knowledge from 10 years estate agency and property buying experience… yes I’ve put my money where my mouth is as an investor on many occasions and know my area better than most agents.

• I can build a rapport with clients from a face to face local service, flexible hours (7 days a week) and the same goes for buyers.

• I know the properties I market and can take this knowledge to buyers as well as deal with vacant properties which online firms cannot. Accompanied viewings – no problem.

As with most business – as you scale it up, there’s a danger you dilute the service and you end up with less of a product. That’s why I’ll stay local.

I believe the internet is a big place with it’s fair share of crooks and bad guys… and some great ones struggling to get noticed. So if you can get the owner of one business to come at 6.30 one evening to say his/her piece, or click on another’s payment page not even knowing how many employees they have, where they are based or even what service they actually offer… it’s no contest: My company Property Parrot, selling property in Leeds (and any others like it in your area) should win everytime at similar fees.

I’ll leave the national firms to bang properties on Rightmove all day long, but I’ll stick with my own business model – low fees but not at the expense of service. A chap/chapess who comes to your home on a one off trip to do your brochure doesn’t give a damn whether you sell your house or not. And why should they? A true estate agent will want his/her sold board there for all to see.

Oh… and if Rightmove want to protect their business model, they’ll stop ‘for sale by owner’ sites (pretending to offer estate agency services) listing at all. Otherwise their portal will be full of badly written details & badly priced property which can’t possibly all comply with the Misdescriptions Act (it’s not policed at all). Will the public then revert to using individual estate agent’s sites again so they don’t have to trawl through the mess that Rightmove’s pages may become?

By: Online Estate Agents

Online Estate Agents — Fri, 05 Nov 2010 09:13:24 +0000

Sorry to join this debate so late, I agree with much of what is said – I don’t know if this will be the year for For Sale by Owner but in the long term I think Online Estate Agents will experience the growth, but two points on this:

1. I think it will only come after the forthcoming ‘double dip’ – in prices and sales volumes
2. I think many of the present ‘oline estate agents’ will be qover taken by traditional estate agents moving off the high street and investing in business models that are more online focused.

We compared 22 online estate agents in our recemnt report, so you can see who is currently in the running:

http://blog.thebigpropertylist.co.uk/compare-online-estate-agents

By: Jenna

Jenna — Tue, 29 Jun 2010 11:00:07 +0000

I’m all for online estate agents, the market in general is getting very competitive and estate agent fees, in general, are dropping.

By: A Punter

A Punter — Tue, 09 Feb 2010 15:22:00 +0000

@Amanada You miss the point. Whether the owners of FSBO sites make money or not is an irrelevance TO CONSUMERS. The new model is no charge – a la Tepilo. How they generate cash is up to them – or maybe they just hope to become the portal of choice and have a longer term strategy. Whatever.
“Estate agents have always been the way to sell houses profitably and efficiently” A baseless assertion. They have been the ONLY way, by mystifying a simple process and claiming some mystical mastery of negotiation skills that are neither taught, tested or independantly regulated. If you give consumers the information and tools they need to do the job of an EA, then consumers can do it. EAs are in the same bracket of public distrust as politicians and bankers. But people can do what EAs do – and save themselves alot of money.
I would also note that you failed to address the issue of EA vs Conveyancing costs in the process – how convenient.
As to the idea of taking commission from suppliers – if cost is the only factor then the consumer might suffer – you are far too unequivocal in your deduction. If quality is also factored in then the argument dissolves. Why should HIPs/Surveys/Conveyancing not be subject to market forces as other products are? Cost/quality comparison is a valid tool that consumers are comfortable with. As you note, quality can command a premium – it doesnt take much nouse to see how a provider should position themself strategically.
It seems to me that many players in the housing market have become too fat and happy in the latter bubble. The bubble has long burst.

By: will FSBO rule

will FSBO rule — Tue, 09 Feb 2010 14:09:48 +0000

FSBOs are the future growth within estate agency. The impact they will have on agents is debatable. However, as with facebook there will be one or two that dominate, and the rest will pick up scraps. Teplio seems to have good backing and funding and has been promoted widely.

The likes of Hablib which i had never heard of, sorry guys!! and many more i have seen do seem to be lacking and will struggle. Possibly with a lot of money thrown at them they may work out as Teplio looks as if it may do, but they could easily become a money pit with no real interest shown.

By: Amanda

Amanda — Tue, 09 Feb 2010 13:53:20 +0000

@A Punter
FSBO that charge fair enough its quite transparent. You are then paying to list your property in the hope you can negotiate as well as an agent with years of experience witht the leads FSBO sites may bring.

To say ‘As to wehther FSBO sites make money – who cares?’ am sure the owners of these sites do, after all they are businesses and want to make profit am sure. This is being done through gaining market share and advertising or by commisions (as shown) from suppliers. If the suppliers as forced to compete on price then the customer will get an inferior product for def. If this is the case the FSBO is hardly a consumer champion.

Yes i would agree that FSBO have there place, as do smart price baked beans and reconsituted chicken.

Estate agents have always been the way to sell houses profitably and efficiently, this fad will be over before it gets started as soon as the owners wise up leaving many FSBO clogging up the internet.

@IHS agreed that quality costs and websites provide a good tool for good agents. Websites attract leads, they dont sell houses.

By: A Punter

A Punter — Tue, 09 Feb 2010 12:53:23 +0000

@IHS – “I can’t help believe “you get what you pay for”” An interesting observation. EA fee on average house in UK = £2500 (1%) to £7,500 (3%). Conveyancers would charge £800 ish. What does an EA do that is so clever cf a conveyancer. So EAs need to wise up and; start providing a service commensurate with their fees; lower their fees; clear their desks. As to wehther FSBO sites make money – who cares? They appear to be offering a service the consumer wants – the viability of the business model is for the FSBO site owners alone. But there is value in being popular – a la Facebook. As to confusing customers – EAs seem to have done their best to mystify the process all these years. The internet changes that and to assume that consumers are confused easily is a little patronising?

By: IHS

IHS — Tue, 09 Feb 2010 08:45:33 +0000

I can’t help believe “you get what you pay for” Property sites that offer free everything make it difficult for everyone involved in this sector, not only do they put themselves in a position that won’t create profit and therefore money to improve their services they make waves confusing the customers of that sector. Look at Facebook for the social network model they have been trying to make good revenue for years and still quite cant do it.

By: No sympathy for conveyancers

No sympathy for conveyancers — Thu, 21 Jan 2010 16:25:49 +0000

Conveyancers have consistently inflated their prices. If comparison site lower the price to clients which they take a small cut for, fine, as long as we are no longer treated with contempt.

For too long solicitors have taken as long as they want, charge whatever they feel and refused to answer your calls. Is this not called turning the tables?