If you are thinking of selling, you may be bamboozled by the sheer number of estate agents out there. You only have to look at the for-sale boards in your area and you will start to notice names that you may have never heard of before.
The rise of property portals such as Rightmove.co.uk have completely transformed the property industry. A buyer no longer needs to take a trip into town and make their way to their local estate agent's shop and pick up a set of property details. Now anyone, anywhere, anytime can search for their next home online. Online agents are very quick to highlight that most buyers start their property search online. And we can’t disagree with them.
The popularity of property portals such as Zoopla and Rightmove have allowed for new and very different types of estate agencies to flourish. Over the last few years, online agents such as Purplebricks and Yopa have gained popularity. Settling down for an evening of TV you are likely to come face to face with an online agent's advertising. I’m sure Purplebricks series of controversial ‘commissary’ adverts are something that we have all noticed. Whilst they have come under fire for their style of advertising, there is no doubt that home owners find their cheap fees attractive.
Online agents have certainly ruffled the feathers of the more traditional high street agents. This is a great thing for sellers, the threat of the online agents has made high street agents up their game, and has also lead to the arrival of ‘hybrid’ agents. The variation in styles of estate agency gives consumers far more choice.
Let’s take a look at the different models of estate agents:
High Street Agents
You will probably be quite familiar with your local high street agents. They usually have a strong local presence and work from a shop in your local town or village. There can be many competing high street agents in your area that will instantly pop into your mind. This doesn’t necessarily mean that they are the right agent for you or indeed the best in the area but they are usually a name you recognise.
Online agents
Online agents tend to be more national. They have a central call centre or online system that controls valuation bookings, viewings and offers. Many in the industry refer to them as call centre agents or DIY agents. They tend to be cheap and their service often reflects their cheap fee. Their marketing is usually below standard with 'local agents' taking property photographs using their camera phone. Sellers usually conduct viewings and progress a sale themselves unless they want to pay extra for the agent to do this.
Hybrid agents
As the name suggests, hybrid agents are a combination of the online and high street agents, offering all the services of the high street agent (and sometimes more), but at a lower fee, and with the added benefits of a more modern approach to marketing your home. We at Alexander Gibson could be considered a hybrid agent. Our approach is modern, and based on the use of the latest technology like an online agent, but we also offer a genuinely local service that takes care of our clients’ needs throughout the sale.
Which type of agent is best for you?
Your home is one of your most precious assets. Choosing an agent to sell your home and achieve the best price possible should be a well-researched process. Look into exactly what you get for your money and weigh up all the positives and negatives.
To help, we have taken two key differences between the estate agent models and looked at what these differences could mean for you. Cost and service level are the two main areas why a seller would choose one type of agent over another.
1. Cost:
This is the number one reason why a seller may choose an online agent over any other. Online agents can be drastically cheaper that a high street agent. Fees vary amongst online agents but here are a few examples:
Purplebricks: £849
Yopa: £839
Tepilo: £895
A high street agent in and around Harrogate will usually charge between 1.2%-2.4% including VAT.
A hybrid estate agent will usually either have a fixed fee or a lower percentage commission rate. Their fixed fees tend to be higher than an online agent but their commission percentage lower than a high street agent. Alexander Gibson charges 1%.
Taking an example of a £500,000 home there is a large variation in fees between the different models of estate agents:
Online agent: £839 - £895
High street agent: £6,000 - £12,000
Hybrid agent: £4,000 - £6,000
Alexander Gibson: £5,000
Looking at this example, it is clear to see why some sellers choose to go with an online agent, but, as with most things in life – you get what you pay for. Whilst costs vary widely, so does the level of service.
Hidden costs
Online agents usually offer a basic package, there are many additional costs on top. For example, Purplebricks charge £300 extra to conduct viewings. Tepilo charge an extra £250 for photos and £360 extra for viewings.
Upfront fees
Upfront fees are popular with online agents, so you have to pay them regardless of whether they sell your home or not. Whereas, high street agents and hybrid agents usually require payment on completion. So you only pay when your home has sold.
Marketing period
Most online agents have a limit on the time they will market your home for. After that period, you have to pay an extra upfront fee to continue. Many home owners think that their home will sell so won’t be in this position, but what if it doesn’t? You could end up paying twice as much. Hybrid and high street agents usually do not have a limit on the time they will market your home.
When it comes to cost, online agents certainly come out cheapest, but consider, is cheapest best?
Whilst online agents are cheap, everything about them screams cheap. From their tv advertising to their garish For Sale boards. Their cheapness runs through their very essence. Your home is not a cheap item, so ask yourself how this reflects on your home. Is your home a cheap commodity?
2. Level of service
The level of service differs between the different types of estate agents. Online agents offer a basic package. They will list your home on property portals, supply a for sale board and sometimes basic photography. They usually provide an online platform for viewers to book viewings and put in an offer. The rest is up to the seller. In contrast a hybrid or a high street agent will usually offer a more comprehensive service.
Quality of marketing:
A seller using an online agent will usually need to take their own property photographs and write their own property description. At best their ‘local expert’ will take some amateurish shots on their camera phone. On the other end of the spectrum a high street or hybrid agent will usually use a professional photographer, some even use a professional copywriter to write the property description. The end result is poles apart. At Alexander Gibson we put together a bespoke marketing package for each property, using professional photographers and videographers to create stunning internal and external photos, aerial videos and video tours to add into our beautifully-written brochures and advertising.
Local knowledge:
A true local agent will understand your local housing market much better than a national online agent. They will know and have great experience in what homes will sell easily and what would need a bit more work. They will price and market the home accordingly. You cannot beat this personal, local knowledge built up over years of working in the locale. Whilst an online agent may have a ‘local expert’, this could be a very loose term to use indeed. Dig a bit further to see how local they really are, often a ‘local’ agent will cover a big area or even a region.
Viewings
Online agents will expect the seller to carry out their own viewings. Many high street agents also try to palm off viewings to the clients, especially on evenings or weekends. Whilst it might sound sensible, after all you know your home better than anyone, in reality it is a terrible idea. Buyers are generally uncomfortable and over-polite when meeting the owner of a home, and will not dare to ask questions that might be seen as criticism. The buyer will have a negative and awkward viewing, and is unlikely to buy. Far better to let an expert research your home, ask you all the pertinent questions, and then present it in a friendly, positive manner that puts the buyer at ease. At Alexander Gibson we are available for viewings 7 days a week from early morning to late evening, and we never ask our clients to carry out viewings.
Negotiating
You pay an experienced agent to achieve the best possible price for the sale of your home. A good negotiator will consider all elements of the buyer’s position, not just who offers the most, and advise accordingly. It could be that a lower offer is better because the buyer has no chain and is a cash buyer. An agent will engage the buyer and yourself to get the best possible outcome for you both. Most online agents require a buyer to submit an offer online. No negotiation. If it doesn’t meet the level of acceptance that the seller requires it will be a flat no. No consideration of a buyer’s position, no negotiation just an outright yes or no.
The end result
Normally an online agents’ service stops when an offer is accepted (and remember, you’ve probably already paid their fee by this stage). From this point to completion the seller has to progress the sale and deal with surveyors, solicitors and mortgage lenders. Seeing as 30% of sales fall through at this point, it is risky leaving this responsibility up to the seller. Whilst they are sure to do their best, it is a time-consuming process that should be handled by an expert. One mistake and the whole sale could come tumbling down and you are back to square one.
An experienced agent will tell you that the hard work starts when an offer is accepted, and completing the final stages takes skill and patience. It is in their interest to do everything in their power to ensure the sale happens. Your agent should be available to guide you and advise you through the process. A cheap online agent could cost you hundreds of thousands of pounds in a lost sale at this point. Pay cheap – get cheap. At Alexander Gibson we provide our clients with a personal sales progression expert to look after their sale right up to completion, and it’s the reason why less than 2% of our sales fall through.
All in all, there is no doubt that online agents have brought a different dynamic to the property industry. Change is good, it helps us progress and develop as agents. But when it comes to selling your most prized possession that is your home, is a cheap, basic approach the best? Will you get the best results? In the long run will you get the most value?
Cost and level of service varies between the different styles of estate agency - online, hybrid, and high street but it also varies between each agent. Any two agents may not have the same cost or service. When choosing an agent to work with really dig down into what they offer. Doing your homework is the best way you can be sure you've made the right choice for you.
Here at Alexander Gibson we offer a full service. We guide our sellers through the process from the point we value their home to the day that the sale completes. We pride ourselves on the quality of our service and the high level of our marketing. We are also very competitive in price to other estate agents in the area. So, if you are thinking about selling, we will be happy to help you attract the right buyer for your home. Get in touch with us to find out more. Call us on 01423 563077 or email talk@alexandergibson.co.uk
For advice on how to choose an agent, see our checklist here http://alexandergibson.co.uk/content/choosing-estate-agent-checklist