The internet can no longer be ignored by any business, in fact, the medium has become dominant in many industries including property. A study held recently by The Negotiator, which is the largest circulation estate agents magazine in Britain reported:
- 60.5% of estate agents believe that between 61-80% of buyers start their searches of a new property online.
- In 5 years time most agents believe that between 81-100% of buyers will start looking for a property online.
- The typical estate agent spends 41-80% of their marketing budget on the Internet. In 5 years time that will rise to 71-100%.
Many things have been changed by the mass-adoption of the internet, including how we sell property. The first change was a rise in the number of people advertising on private sale websites like the Little House Company, which would advertise its listings on big portals like Rightmove. This made it fairly easy for anyone to sell their own home, and therefore avoid having to pay up to 2% commission to an estate agent.
When this loop hole was closed by the aforementioned big portals, who make their money from estate agents (this was not the only reason for banning private sales, it was also to do with the fact that estate agents are law-bound to provide accurate information in their listings etc), online estate agents arose as the next best thing.
This is because, we simply can’t ignore the biggest portals if we want to give our home the best chance of fetching a good price. New data has shown that Rightmove received over 3.6 million unique visitors in March, and both Zoopla and FindaProperty received well over 2 million. Some studies have found that up to 50% of buyers they surveyed found their home on Rightmove, so if you add in the others this would likely be even higher, and higher still for the internet as a whole.
Online estate agents (aka internet estate agents) allow us access to those very portals, but at a much lower cost than high street agents, often a fixed fee of £150 upwards. They are able to charge such low prices because of their vastly different real estate business model.
Online estate agents focus on the internet. They advertise their own services on the internet, and their clients properties on the internet. They have no high street offices, and because they don’t handle viewings, no company cars either. This saves a huge amount in overheads, which they pass on to their customers.
Another saving comes from the fact that they don’t advertise in the press. Press adverts have been known for some time as a waste of an estate agents marketing budget, because the buyers are searching online. This is why the big newspaper companies abruptly bought up the major property portals, Zoopla, FindaProperty, Primelocation and Fish4Homes are all owned by Newspaper groups. Press advertising is continued by high street estate agents mainly to catch the eye of sellers, who expect to see their property in the press, and also prospective sellers who have been known to use the press to research which agents to use.
But the sellers have come online to, they know the internet and researching consumer actions on the internet has become commonplace for them; which restaurants and hotels are good, getting a good deal on their holidays. So they are learning that online estate agencies could be the answer to UK home selling as well.
The fly in the ointment is the for sale board, which is known to be the only marketing tool capable of competing with internet advertising. However, most online estate agents offer for sale boards as an addition to their packages.
Thus, the key difference for sellers is in handling the viewings. If you think you can handle viewings and effectively sell your own home then online estate agent is the way to go. If you don’t then you should probably stick with high street agents. Many online estate agents will tag on the service of handling viewings but will usually ask a percentage commission after the sale.