Mon 09 Oct 2017
Lee Whitelock, Director MNAEA
On face value, the biggest advantage of using an online agent is the savings you can potentially make. High street agents typically charge a fee of around 1.5%-2% of the purchase price achieved, so even if your fee is at the lower end of the scale, you will still pay £4,500 if you sell your home for £300,000. When compared to the fees charged by online agents (packages start from around £400 up to £1,000+ depending on the service you opt for), this seems like a significant difference.
However, it’s worth noting that this saving could potentially be wiped out or even cost you money if you make the mistake of relying on an online agent’s valuation of your property. Online agents tend to operate from nationwide call centres with limited local knowledge, so valuing your house or flat is likely to be carried out using online data. This is fine if you just want an approximate guide of your property’s value, but as the central London market can change on a daily basis, you really need to seek a valuation from active local agents who know what’s going on in the local market. In fact, whether you opt to sell your property online or via a local agent, it’s recommended that you obtain valuations from three local agents before making a decision about what price to market your property for and which company to use.
Possibly even more important than fees is the issue of trust. There is no law stopping anyone from setting up as an estate agent on the high street or online, although the latter is significantly less costly, so whether you opt to use a high street agent or an online agent, it’s important to do your research to ensure you appoint an agent with a good reputation. Having an expert on hand to guide you through the selling process and ensure a positive end result is the best way to keep stress to a minimum.
All UK agents must be a member of one of three grievance bodies who can pursue your claim if things go wrong: The Property Ombudsman, Ombudsman Services: Property and, as of 2014, The Property Redress Scheme. However, their powers are limited so don’t fall into the trap of assuming that if your chosen company is a member of one of these bodies, you’re automatically in safe hands. Ask family, friends and neighbours in your area for personal recommendations, and look at online reviews before selecting an agent.
Like their high street counterparts, online agents will tend to use Zoopla, Rightmove and other property portals to market your property, however people won’t be able to see your property in a high street window if you opt for an online agent, although serious buyers will of course be checking the online portals on a regular basis. ‘For sale’ boards are also offered by most online agents as well as high street companies. These help to promote the fact that your property is for sale locally.
When choosing an agent, don’t forget that buyers generally prefer dealing with individuals who take the time to understand their requirements and show them properties that meet their needs, rather than impersonal call centres who have little or no knowledge of the local area or their particular requirements. A good local agent will also ‘qualify’ buyers to ensure they don’t waste your time or theirs by showing your property to someone who can’t afford it or isn’t in a position to proceed with the purchase. They are also likely to have a ‘hot list’ of applicants looking for a property like yours who are in a position to proceed with the purchase.
High street agents also win when it comes to viewings, as these will be conducted by an experienced agent and you won’t need to be present yourself. Good agents are highly effective sales professionals who will actively ‘sell’ your property. In a buoyant market where demand outstrips supply, this might not be such an important issue, but in a slower market your property needs to be proactively marketed so that it stands out. Viewings are a key opportunity for your agent to point out the many benefits of your property, promote the local area, discuss current market conditions and set the tone for any negotiations ahead. If you use an online agent, you will have to show your property to multiple unqualified buyers yourself which will be incredibly time consuming. In some cases, online agents do offer a viewing service, but can you be sure that the person conducting the viewings will have any knowledge of your property, current market conditions or the local area?
Once offers start coming in, a reputable high street agent will carefully gauge the demand for your property and advise you of different strategies, such as best and final offers, sealed bids, etc. in order to help you achieve the optimum price. Without a professional advisor, you could potentially lose out on thousands.
Once a property goes under offer, any local agent worth their salt will work incredibly hard to ensure that the chain doesn’t collapse and the sale completes. Very often it’s transactions without an agent that create problems. It’s a serious oversight to assume that when an offer is accepted the hard work is over. A good agent acts as the middleman between the buyer, seller and their solicitors to progress chase and ensure everything happens at the right time.
Another point worth bearing in mind is that a traditional high street estate agent works for the vendor on a ‘no sale, no fee’ basis. They can spend months working on a sale, but if it falls through they don’t charge a fee, so they are highly motivated to ensure the transaction completes. The higher the price achieved, the higher their fee! With an online agent, the vendor usually pays upfront regardless of whether the sale goes through. At Garrett Whitelock, over the last few years we have represented many vendors who first tried to sell their property using an online estate agent, failed and then came to us, so they ended up paying more than if they had instructed us in the first place.
In summary, if you want to achieve the best possible price for your property within your preferred timescale, it generally pays to work with a local high street agent with an excellent reputation in the area. Remember that some agents are better than others, so always do your research before you appoint anyone. However, if you don’t mind conducting the viewings yourself, you’re not tied to a particular timescale and you are willing to accept a less-than-guaranteed outcome, an online agent could be the best route for you.
When it comes to my own home, I know which route I’d prefer.
Lee Whitelock is Director of Garrett Whitelock estate agents in Tower Bridge Road, SE1.