How Online Estate Agencies Work
Many people have the perception that you need the help of a real estate agent if you’re selling your property. But as the number of online property portals increase; it seems that the status quo may not stay the same for long.
According to the Royal Institute of Chartered Surveyors (RICS), online property transactions now account for 5 per cent of total completed sales in the UK.
So why are people slowly turning away from the traditional way of selling houses? Well, it’s all about the costs!
High street estate agents charge their clients around 1.5 to 2 per cent of the final sale price as professional fee. This means that if you sold your house for £300,000, you’ll have to let go of £6,000 as payment to your estate agent. Online agents in comparison only charge a flat rate of £250 up to £1000 (plus VAT) when you sign up your property on their site.
Apparently, the deal even gets better! I used to think that those who sign up with online estate agents do all the marketing work themselves. I was wrong.
Hatched, one of the UK’s many property portals, also offer payment options for interested buyers, as well as professional photography services, floorplans, and property description for sellers. Adam Day, the director for Hatched, shared that they also facilitate the paperwork of the deal once a seller finds a buyer.
The website “The Little House Company” also offer extra services like bespoke For Sale signs which include the seller’s number and social media campaigns, but for an additional sum.
Although online estate agents appear like a fairy god mother for its users, there is one service that they won’t provide, and that is conducting private viewings for the property. People who sell houses online usually show their property to prospective buyers on their own and Mr. Day claims that this is more beneficial to the seller since sellers knoww their house like the palm of their hand.
If you really can’t muster up the signing fee for these sites, some online agents provide their services for free. Tepilo, a DIY house sale website, allows its users to market their house online without any charge, but this listing won’t be featured on major property portals like Rightmove, Zoopla, and Prime Location thus, limiting your pool for potential clients.
One of my friends sold a terraced house in Lewisham, South-East London last May with the help of an online estate agency. He placed an online ad for his 2-bedroom Victorian with an asking price of £353,000.
His online agent performed all the services I mentioned earlier as well as the handling of buyer inquiries. In the end, he accepted an offer for £365,000.
If he chose to sell his house through a traditional estate agent, he would have paid £7,008 in fees, including VAT. Instead, he saved £6,474 because he only paid a fee of £534 including VAT.
I hope this short glimpse into online estate agencies helped you gain some insight into this emerging mode of property transaction. See you in the next update!