High Street vs. Online Estate Agents
From costs, service to local knowledge ... who fares best?
At first glance, the biggest difference between High Street and online estate agents is the price.
With fixed fees starting at around £595, internet based estate agents appear to be much cheaper than their traditional bricks and mortar rivals, most of whom charge between 1% and 4% of the final sale price – between £2,400 and £9,600 on a typical £240,000 property.
But is it really as simple as this, or do you get what you pay for in terms of service?
Both using a live estate agent and selling your home online have their pros and cons. Choosing the right estate agent for you depends on the type of home you have to sell, the type of person you are, how much you need a fast home sale and how flexible your schedule is. Here’s a quick guide to the various issues you need to consider when picking an estate agent.
As discussed above, the biggest difference lies is in the fees that each type of agent charges. On face value, online agents are usually much cheaper than High Street versions, as they don’t have shops, staff and company cars to run. You will typically pay between £500 and £1000 to sell your home online. High Street agents will normally charge a percentage of the final sale fee, with the UK average 1.18% plus VAT. Many people think that this is unfair, as the amount of work involved in selling a £450,000 home is not much more than that of selling a £150,000 home, yet the fees are three times as much.
Of course, this price advantage is not always as clear cut as it might first appear. For a start, you will often have to pay upfront for even the best online agents, or commit to paying later, and this fee will apply whether your home sells or not.
Often the headline fees advertised by fixed fee estate agents will only cover the basics, so you may have to pay extra for things like for photographs, sale boards, accompanied viewings and other services. In fact, the Advertising Standards Authority has upheld a number of complaints against internet estate agents in recent years, where they have been less than fair and open in their claims.
Finally, you may find that you only get the bargain price from web based estate agents if you agree to use their other services, such as conveyancing. However, these may not be as convenient or as competitively prices as your local law firm. If you choose to ignore this clause and use your own solicitors, you could find you are charged a penalty.
Check Out: The Conveyancing Process Timeline
As mentioned in the cost section, online estate agents fees will not always cover like for like services compared to their High Street competitors. While a High Street agent will accompany viewers when you are not free, and undertake basic checks to filter out time-wasters, the online agents will expect you to show every potential viewer around and ask those awkward financial questions yourself.
Bricks and mortar estate agents will usually assign you a personal account manager who understands your property and your personal position, whereas most online agents will use a call centre, where the person you speak to may be different every time, and only able to work from notes. This is fine if your sale is straightforward, but if there are any unusual aspects, you may find yourself having to explain the situation over and over again every time you call.
Watch: Settled on the BBC - They also cover the debate between online vs. high street estate agents:
Perhaps the biggest difference between High Street and online estate agents after price is the benefit of local knowledge. A High Street agent will understand the local property market in depth and be able to give you a realistic valuation based on their own first hand sales experience. They will also have a bank of potential buyers looking for homes like yours, so they may be able to match you up very quickly.
A local agent will also have an existing relationship with your local solicitor, and often the buyer’s representatives too, which can be invaluable in sorting out any issues and smoothing the path to a hassle free sale. Online agents will not normally have a relationship with either your buyers or the local law firms and so the process can often take much longer, or even stall completely.
Getting the Best Price
Saving money on your fees is no use if your online estate agent doesn’t get you a good price for your home. If you use an online agent, you will often be on your own when it comes to price negotiations, and so you could find yourself accepting an offer you are not happy with. Since they work for a fixed fee, there is no incentive for an online agent to get you a better deal.
While the difference in fees may be significant, in the larger scheme of a house sale, they are a fraction of the overall sums involved, and can often be wiped out completely by having a skilful negotiator to get you a better price. If you choose a local estate agent, then they will normally negotiate on your behalf, and since they are working on commission, it is in their best interests to get you the best possible price.
What’s more, these negotiations will usually move much faster, as there is a dedicated agent mediating between the two parties; one who has met them both and understands their situation personally.
How do they compare on performance?
A survey by the consumer champion, Which?, found that online estate agents performed slightly better on two major measures. On average, online agents sold homes around 38 days faster than High Street agents, and only 13% of their sales were discounted by 5% or more, compared to 19% for their High Street competitors.
Conversely, independent experts, The Advisory found that High Street agents generate a 5% better price, while increasing viewers by 48% and offers by 64%.
However, it is important to remember that the numbers involved vary hugely between the two groups. In 2017, online agents were involved in just 104,807 home sales, compared to 1,532,700 sold the traditional way.
So, which should you choose?
Picking an estate agent is, to some extent, a personal choice. If you feel comfortable and confident in showing your own home, asking those personal questions and negotiating your own deal, then an online estate agent can save you thousands of pounds. On the other hand, if you are a busy person, or you don’t feel comfortable talking money or doing deals, then you may be better in the hands of a local professional.
Some people are happy to wait on hold to talk to a call centre, while others prefer the reassurance of calling in to speak in person to their own dedicated account manager for an update. Some like micro-managing their sale, with 24 hour access to their account online, while others prefer to have a professional handle everything for them, from vetting viewers to showing them round. It all depends on who you are and what you expect from your agent.
You should bear in mind that there are good and bad estate agents in both camps. Before making your choice, you should ask your friends and neighbours who they would recommend, and research all your options thoroughly. There are numerous ratings sites, such as Trust Pilot, which will give you independent reviews from previous customers to help you compare online estate agents as well as local firms. You can also keep your eyes open to see how quickly local for sale boards turn to ‘sold’ for each of your local estate agents.
The advisory study quoted above found that overall, the best online estate agents were as good, if not better than the average High Street agent, but that the best High Street estate agents were easily the best option for selling your home at the best price.
You could avoid estate agents all together
With high charges and variable service, you may be better off not using an estate agent at all to sell your home. Professional property buying services, such as Yes! Homebuyers, can offer a convenient sale, at a guaranteed price, with no estate agents to pay and no legal fees. You’ll also avoid the mounting costs of preparing your home for sale, and you’ll never have to wait in for viewers that don’t turn up.
Yes Homebuyers' Director, Kelvin Elliot, explains: “Whichever route you choose, estate agent services are expensive,” he says. “With Yes Homebuyers, there’s no agents, no viewers and no hold ups in the buying chain, just a swift, straightforward sale timed to suit you. We work hard to remove both the costs and the doubt from the process, so our customers can get moving sooner and get on with their lives.”