Edward Stoyle, Head of Residential Agency, Carter Jonas York
The dawn of the millennium revolutionised the property market with a new wave of technology and many of us haven’t looked back. Online marketing through agent websites and property portals is now intrinsic to the sales process, with “proptech” complementing the role of the traditional agent.
However, last year marked a period of significant growth amongst online-only agents, who have capitalised on rising house prices and a preoccupation with stamp duty to seduce a new generation of vendors with aggressive advertising campaigns and purportedly low fees.
With vendors keen to minimise expenditure, it is understandable that many are keen to try out a new service for a fixed fee in the region of £500 - £1000; however, whether the online agents afford much more than a picture of a property on a digital noticeboard, remains to be seen.
The proliferation of online agents has meant that they appear with increasing frequency in chains of sale, but rarely garner a positive impact. Indeed, more often than not, the prospect of a chain with an online agent fills traditional agents with dread. With a distinct lack of communication and no means through which we can verify the state of a sale, online agents all too frequently signal a protracted hiatus that leaves a vendor exposed, and ultimately threatens to collapse a chain.
There are plenty of examples of vendors receiving asking price offers through online agents, there is a vast disparity between offers accepted and sales completed. The work that goes on behind the scenes might be discreet, but it is invaluable.
An agent’s responsibility is to invest time in managing a chain, resolving issues, negotiating on behalf of a vendor, and coordinating with the other agents and conveyancers. This is more important than ever when two parties within a chain polarise; if tensions rise, a deft hand is required to resolve the issue and move forward. Without an established, competent agent, the sale will lack due diligence, not to mention momentum, and it goes without saying that time kills the deal. All too frequently, a chain with online agents relies on the good will of traditional agents to fill the void, maintain communication and provide impetus.
When a chain collapses because of an online agent, all vendors are implicated, and it is an injustice to those who have instructed a traditional agent. While they might pay more in fees, the sale is chaperoned from start to finish, and the hours are invested to complete a transaction.
While the online agents make grand proclamations about their affordability, and in the same breath cast traditional agent fees in a negative light, we rarely charge more than 1 and 1.5% of a property’s asking price.
Furthermore, a traditional agent will only ever charge its vendor at the point of completion, whereas most online agents will charge for even listing a property. By contrast, online agent fees often omit a host of additional charges; hosting viewings and insurance all invariably come at an extra cost. Ultimately, if our vendors receive two comparable offers and one buyer is using an online agent, we will always encourage them towards the buyer using a traditional agent as it promises greater certainty for the overall outcome.
While there are benefits to online services, there is little that can rival first class customer service, proactivity, and an agent who knows what they are doing. Until online agents get their act together, there is little chance that they will rival the work of traditional agents any time soon.