Online estate agents have seen a tremendous rise in popularity in recent times. Why? Because compared to traditional high street agents they can offer major convenience and most importantly, significant savings.
But not all online estate agents are created equal, and there are still risks involved. In many cases, these can be mitigated by paying attention to the small print.
Let’s take Purplebricks, for example. Thanks to its enormous advertising budget, most people will be familiar with its assurance to reduce the ‘commisery’ of (paying a small fortune to an estate agent for) house sales.
The Purplebricks TV ads promise to sell your property for a ‘fair fixed fee’ of £899 – a sum in keeping with the flat upfront fee structure of most online agents.
However, look closer and you’ll find all is not what it may seem. For a start, that flat fee of £899 is only applicable to properties outside of London. If you are selling in the capital, the cost jumps up to £1,399 (all figures correct at time of writing). The cost of hosted viewings is £300 and £399 respectively. Secondly, if you instruct Purplebricks to sell your home you will be charged:
- If you decide to no longer use Purplebricks to market your property
- If you decide to no longer use Purplebricks’ recommended solicitor service
- Ten months from the date when you first agreed to use Purplebricks’ service (if you didn’t pay upfront already).
What does this mean? It means you’ll be charged £899 or £1,399 whether your property sells or not. Some have argued that Purplebricks does not make this explicitly clear in its advertising, and has in fact come under fire from the Advertising Standards Authority for its claims.
This is where traditional high street agents still have an advantage because typically, you won’t be charged anything if they fail to sell your property. However, they still remain a more expensive option in many scenarios.
The good news, however, is that there are some online estate agents that do offer a genuine ‘no sale, no fee’ pricing structure, and at a far more competitive price than many traditional agents.
These “pay-only-when-you-sell” agents recognise that there’s always uncertainty around putting a property on a market, so their ‘no sale, no fee’ models aim to mitigate risk while instilling confidence in the seller.
No sale, no fee works exactly as you would expect. If your property doesn’t sell, you don’t have to pay anything. You only pay the fee once your property has been sold. Not long ago, some online estate agents would charge extra for this option – this was their way of leveraging the risk of a potential no-sale scenario. Now though, more and more agents are doing away with separate ‘pay upfront’ and ‘no sale, no fee’ structures and offering a single price, only payable on completion of the sale.
The first major online agent to do this was HouseSimple, which introduced a single ‘no sale, no fee’ price of £995 in 2018 – and unlike some other agents, there are no conveyancing (legal) costs or other hidden payments required to access this low price. If you don’t sell with HouseSimple, you’re free to try other another agent.
Compared to the costs incurred selling with a traditional estate agent, HouseSimple’s fee structure could represent significant value. Let’s say your property is worth £250,000. A high street agent’s typical 1.5% fee will come to £4,500 – so that’s a saving of £3,505. Plus, of course, you get all the benefits of using an online estate agent.
With HouseSimple, sellers get access to a dedicated agent, professional photos and floorplans, a ‘for sale’ board, negotiation services, access to their own personal property hub and, of course, adverts on the major property channels, including Rightmove and Zoopla. Optional services on offer include conveyancing, EPC reports, mortgage broking and a number of hosted viewings packages. Get 10 for £295, or pay-per-viewing at £35 each.
Selling your home online is designed to be a very hands-on experience, giving you complete control over the process, and as such many sellers are happy to conduct viewings themselves. Opting for hosted viewings is indeed an additional expense, but it still represents good value compared to traditional high street agents. Adding £295 on top of the scenario imaged above still nets a saving of £3,210.
Selling a property can be time-consuming and expensive. Using an online estate agent often mitigates these issues, but there can still be risk involved if you don’t read the small print. Nobody wants to pay for a service that fails to deliver the goods, so it makes sense to choose an agent offering a ‘no sale, no fee’ package, which ensures you’ve got less risk and more to gain.