If you look around online, it’s easy to see that online estate agents have become increasingly popular these days. The principal draw is the lure of seemingly lower fees compared to traditional high street estate agents, during a period when you have to fork out for so many different services.
Online estate agents frequently offer fees ranging from between £300 to £1,800 and, on the face of it, this compares favourably to the standard 1 – 3% of the sale price which high street estate agents generally charge. Many now question whether high street estate agents are even worth paying that much extra for, particularly given that 9 out of 10 property searches are conducted online.
It has to be said, however, that there are downsides to using an online estate agent as well; this also includes when you are buying from someone selling who’s using one: this article examines both the pros and the cons.
1 Reduction in fees
If you were selling a £300,000 property, you would pay a high street estate agent £7,200 if they were levying a 2% fee (£6,000 + VAT) whereas an online estate agent, as stated, would charge you up to £1,800 (one prominent online estate agent would charge £1,200 for a property in London).
Generally, you’re likely to save even more money if you pay an online estate agent upfront, although different services included or excluded might alter the price. Given the many expenses that always accompany a conveyancing process, it’s understandable that this kind of reduction in what you have to pay out is a draw for many.
2 You’re in charge of marketing your property
Vendors have often expressed frustration that their high street estate agent who conducts viewings of their property does not know a great deal about either the property or the locale it’s based in. This can be a real problem as buyers may be put off when they don’t feel they’re getting accurate answers to their questions.
Conversely when you use an online agent, you’re in charge of the viewings and providing information, although some of these agents will include arranging viewings in their fee.
Taking control of your own viewings can of course be a two-edged sword – you have to manage everything associated with them – this is considered later.
3 Less security risk
You’d normally give your high street estate agents keys to your property for ease of access where viewings and surveys are concerned. Some are worried about this and you also have to consider whether your contents insurance is still valid given that you’ve left keys with your agent.
If you conduct your own viewings, none of this is an issue.
You can get your property registered with an online estate agent with just a few clicks on the internet and your home is normally listed within around 48 hours, including on other linked portals such as Rightmove.
5 Range of selling methods
Many of those using online estate agents relish being able to sell their property in their own way using a variety of up-to-date means. These include digital tours and online photos. Additionally you can create these yourself and not have the extra expense of paying an estate agent to do it for you.
However online estate agents frequently offer these kinds of services as extras, giving further options.
1 Verbal agreements become less reliable
Traditionally you wouldn’t normally have much direct communication with your seller: your high street estate agent would be the channel for negotiation. With online estate agents, buyer and seller are normally directly in contact.
On the face of it, this might seem a good idea; there’s no intermediary so negotiation can be quicker. The trouble is, you’ve no longer any middleman to filter communications: you might find yourself positively badgered by a buyer/seller.
Additionally, high street estate agents are fully aware that verbal agreements require formalising via each side’s conveyancing solicitors. You might find that what you thought was properly agreed might not be – say, for example, about whether white goods are left in a property as part of a sale – and you might struggle to prove otherwise.
High street estate agents can also bring their experience of price negotiations and knowledge of a local area’s housing market to bear. They can better steer these to a mutually agreeable conclusion. The converse with direct buyer/seller dealings is that there’s no third party to help modify what might be an unreasonable demand.
2 Services charged as extras
Anyone familiar with the way budget airline flights work will know that while the core cost of the service looks to be very reasonable, the reality is that if you require anything beyond the most Spartan offering, you’ll have to pay for it, and the costs soon stack up. You can expect to pay for in-flight food and drink and you might even be expected to pay to use a toilet!
The same can be the case for online estate agents’ charges. The basic charge for marketing your property for sale might be as low as £400, but if you require items like an Energy Performance Certificate (EPC – required by law before you can sell) or For Sale Board or floor plan, you’ll have to pay more for them.
Some people prefer the cost of a service to be truly fixed and the possibility of extra items stressing an already tight budget can put them off.
3 You have to pay upfront to get the cheapest prices
Normally to get the lowest prices quoted by online estate agents, you have to pay upfront. One of these, for example, advertises a £595 charge if you pay upfront but £695 if you pay on completion.
Implicitly if you pay upfront, there’s no guarantee that you’ll actually sell your house – this is another factor to bear in mind.
4 Your inexperience as a seller or buyer may be more exposed
Unless you’re a property developer, you’re unlikely to have much experience as a buyer or seller of property. With a traditional estate agent, you’ll have someone to ask for advice if an unexpected decision suddenly has to be made, for example. When you’re using an online estate agent, the chances are you’ll have to rely on your own limited knowledge, particularly if you can’t get hold of your solicitor.
5 Online estate agents generally don’t offer a No Sale No Fee warranty
High street estate agents offer a no sale no fee guarantee as a rule. This means that you can rest secure in the knowledge that should you be unable to sell your property under normal conditions, they’ll cover all the costs of marketing, valuing and registering your property for sale on online property portals.
To this point, it’s rare to find an online estate agent who’ll offer you this kind of guarantee and those that do normally require you to pay a minimum fee within their terms & conditions if they fail to sell your property.