More and more property sellers in the UK – and indeed around the world – are opting to use the services of an online estate agent. Compared to their traditional high street counterparts they offer greater convenience, a wider audience of potential buyers and, crucially, significantly lower costs.
When these agents first arrived on the market, their concept was largely driven by a ‘build your service’ model. They’d charge a very low upfront fee to list your property on popular portals such as Rightmove and Zoopla, and offer additional levels of support – for an additional cost –to help secure and progress a sale.
This worked well for a while, particularly as sellers were keen to explore this new and innovative way of doing things. Charging a fee upfront reduces the risk shouldered by the agent – if a property doesn’t sell, they’re not out of pocket for the time and resources they’ve put into the listing. The seller would take this risk, the incentive being the overall lower costs and money-saving benefits involved in using such a service.
Indeed, there are several online estate agents that still operate this way. Purplebricks – the market leading online estate agent – is one, charging a relatively low fee to list a property on the major portals and provide support along the sales journey.
However, there are no guarantees in the property market, and if your house fails to sell with Purplebricks, you’ll still be charged a fee. In this instance, that’s £899 if your property is outside of London, and £1,399 if it’s in the capital. While these figures represent good value compared to the typical 1.5% charged by high street agents, that’s still wasted money if you don’t achieve your main objective, which is to sell your property.
This type of pricing model has attracted some criticism from sellers – and indeed the Advertising Standards Authority, which says the promotional claims in this area are often misleading. However, there are a number of online estate agents that offer a risk-free alternative in the shape of ‘no sale, no fee’ packages. The agent takes on the risk, the cost of which is built into their pricing.
One such company is HouseSimple, which was the first online estate agent to do away with upfront fees. HouseSimple charges a clear fixed fee of £995 per property sale – this is regardless of geography, so sellers in London won’t face an additional charge. Their promise is simple: if they don’t sell your property, you don’t pay anything, and you’re free to try an alternative agent.
For HouseSimple’s £995 fee, sellers get a dedicated agent, professional photos and floorplans, access to their own personal property hub, professional negotiation services and, of course, listings on the most popular property portals, such as Rightmove and Zoopla. There are also optional extras on offer, such as conveyancing, EPC reports, mortgage broking and hosted viewing options. Pay per viewing at £35 each, or purchase a package of 10 for £295. And included in this £995 fee is, of course, the reassurance that you don’t pay if your property doesn’t sell.
Sellers aren’t just looking for reassurances about their property though. As highlighted at the end of 2018, the sustainability of individual online estate agencies is also a consideration. In December, Emoov went into administration just months after it merged with Tepilo, another online agency.
Understandably, this caused Emoov customers a great deal of stress, with many concerned about losing their upfront fees of £895 after their listings were sold on to the highest bidder – a property company based in Newcastle. Had the sellers in question opted for a ‘no sale, no fee’ package, they would have been safe in the event of the agency failing, and could take their business elsewhere for no additional cost.
Despite their many incarnations, constantly evolving price plans and the volume of options on the market, online estate agents are still a relatively new concept. Undoubtedly they will eventually become the go-to model for property sales, but while the landscape ekes out the most sustainable companies, there is always a risk that an online agency could fail. Indeed, there are no guarantees that any service – online or otherwise – will stay afloat in what is a tumultuous property market. As such, it makes sense to choose an agent such as HouseSimple, which offers a ‘no sale, no fee’ option for extra peace of mind.