Should you sell your home online?

More and more people are choosing to sell their homes through online estate agents that pitch themselves as cheaper than their high street counterparts. But are they the best option for sellers? Stephen Little investigates

The internet has revolutionised the way we buy and sell homes, with many people opting to use an online estate agent rather than a more traditional high street one.

At the moment, online estate agents account for around 5% of the market and this looks set to rise, according to industry experts.

Research by estate agent comparison website netanagent.com has revealed a major shift in how people are prepared to sell property, with 85% of respondents saying they were willing to consider using an online estate agent.

Property expert Kate Faulkner put the growth of online estate agents down to changing consumer behaviour.

“There is no doubt that there is an ongoing shift online. We are going through a technological revolution and moving towards self-service models in a number of industries. I don’t think estate agencies are any different.”

As online estate agents do not have a physical branch based on the high street their overheads are lower, which they can pass on to customers with cheaper fees.

With the opportunity to save thousands it is easy to see why many people think the future is online.
Online estate agents use property portals such as Rightmove, Zoopla and Prime Location to market your property – making your home instantly available to thousands of potential homebuyers.

In recent years there has been a boom in the number of online estate agents that you can use and they include firms such as Purplebricks, EasyProperty, HouseSimple, House Network, Tepilo and eMoov.

They provide many of the services available on the high street, with most charging a flat fee for a package that includes an advert, professional photos and floorplans.

While some online websites will only list your property, leaving you to do most of the work such as arrange viewings, others will help you with the whole process.

So which should you plump for if you are looking to sell your home? 

Charges

Estate agents typically charge a percentage fee. According to conveyancing firm MyHomeMove, the average high street estate agent fee is 1.3% including VAT.

However, this can range from anywhere between 0.75% to 3.5% of the agreed selling price.

With the average house in the UK selling for upwards of £200,000, this means you could be approaching fees of over £5,000.

On the other hand, online estate agents are often a fraction of the cost, with many charging a flat fee as low as £300, going all the way up to £1,500.

Paula Higgins, CEO of the HomeOwners Alliance, said: “One of the big reasons why people move away from high street estate agents is because of the high commission.

“But while you can save thousands by using an online estate agent, if the house sale falls though you could end up losing all your money as you pay a fee upfront.

“Most high street estate agents operate on a ‘no sale, no fee’ basis, so if you don’t sell your home you don’t pay anything.”

The more a high street agent sells your home for, the more they are likely to get paid, so they have an incentive to get you the highest price possible.

One criticism of online estate agents is that as they charge a flat fee they are not as likely to be motivated to get the highest possible price for your property.

Adam Male, co-founder and COO of online estate agent Urban.co.uk, said an online estate agent was more likely to give the seller their full attention because they had been paid upfront.

He said: “If the sale is not going too well under commission, yours can end up going to the bottom of the pile.

“Once we have been paid we it is our job to make sure you get that service.”

Selling a property

Like traditional high street estate agents, online estate agents will market your property through an online property portal such as Zoopla.

They have a range of packages available and a list of optional extras to choose from, often giving you greater choice than on the high street.

Additional extras might include professional photographs, sales brochures, bespoke sales boards and online videos.

Unlike the high street, online sellers also have the added convenience of being available round the clock.

Purplebricks estimates that around 70% of its business takes place outside of normal working hours when estate agents are closed.

With a high street estate agent you have to market your home until it sells or the contract ends.

If you go through an online estate agent there is typically no contract period, so you are free to advertise with them as long as you want or until the property sells. You can even use multiple agents.

If you opt to use an online estate agent you will have exactly the same legal protection as if you use a high street one.

Online estate agents are governed by the same regulations and redress schemes as those on the high street and must be a member of one of three schemes – the Property Ombudsman, Ombudsman Services: Property, or the Property Redress Scheme.

Higgins said: “One of the main differences is that a lot of high street estate agents are sole agency contracts, so you will be tied in with them. If you then decide to go and sell online you will still have to pay that estate agent a fee, so be really careful with everything you sign.”

Ross Hooper-Nash, managing director of estate agent Jeffrey Ross in Wales, said: “People love the fact they can just pop in to see what is actually going on without having to ring a call centre that does not have the knowledge or experience of having to deal with what we do.”

He stressed that having local knowledge about house prices and dealing with buyers face-to-face helped to get the best value for sellers.

“We are in a market where multiple asking offers are being received and it is about picking the right buyer for the seller’s situation. It is not just about price, it is about who can give our client the most flexibility,” he said.

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Top tips for selling your home

Paula Higgins, CEO of the HomeOwners Alliance, has a number of tips for homeowners looking to sell their property.

Start by doing your research. What is it you care about most? Selling as quickly as possible? Getting the right price?

Once you’ve got the facts you need to select three agents to give you their pitch and a valuation. It’s at this point you’ll want to see the agents demonstrate real local knowledge and experience. Are they enthusiastic about your property?

Find out how they plan to market it locally as well as on what property portals. You want your property on the big ticket sites to maximise exposure of your home to potential buyers, so make sure it is on Rightmove and Zoopla.

Then carefully take a look at the contract terms. Ask about anything you don’t understand. Ideally the contract length should be four weeks (but 12 weeks can be the norm), plus the usual two weeks’ notice should you not be happy. Negotiate the fee down – you should look at paying around 1% plus VAT.

If you think your house can sell itself, or perhaps you don’t think estate agents are worth their hefty percentage commission, take a look at online agents.

But do your own local research to get the right valuation and think about what sort of service you want. For instance, are you happy doing your own viewings?

Whether high street or online, think carefully before choosing the house or recommended mortgage and conveyancing partners.

Estate agents can strong-arm consumers, either with discounts to their overall fee or promises of preferential treatment for doing so. But hold firm – you need the best mortgage and conveyancing solicitor you can get, so shop around.

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Valuing your home

Ensuring you get your property valued correctly is crucial. If it is too high, prospective buyers are unlikely to be interested. Price it too low and you could end up losing thousands.

Some online estate agents will arrange for local experts to visit your home to value it.

Others which have a more limited understanding of the housing market in your area and will use online data to determine how much your home is worth – which won’t be as accurate as someone with local knowledge.

Purplebricks is an online estate agent with a difference. It markets itself as a hybrid estate agent, combining the best elements of online and high street estate agents. The company says it gives sellers the best of both worlds, with cheaper fees as well as expert local knowledge.

It has a growing number of freelance agents who have knowledge of the local area and can meet clients face-to-face to provide a professional valuation and offer their advice through the sales process.

Launched in April 2014, it offers sellers a flat fee price of £849 plus VAT or £1,199 plus VAT in London.

Customers have an online profile which they can use to arrange viewings and check the progress of their sale.

Other online estate agents that have adopted the hybrid approach include YOPA and eMoov.

Nicola Hamilton, from Purplebricks, said: “Every customer gets a local property expert who is there on hand for help and advice. All of our local property experts are experienced estate agents, so they know the market really well.

“They will look at data of houses that are sold nearby so they can give an accurate valuation.”
Higgins said: “The downside of using an online estate agent is that you could get a lower price for your property than you otherwise would get because they use online tools to evaluate the property.

They also might not be so eager to get the sale as they have already been paid.

“High street estate agents hungry for the sale typically try to get 10% more than what you might otherwise get, but you have to offset this against commission fees.”

Viewings

Whether your online estate agent carries out viewings will depend on the package you have chosen.

While many online estate agents will arrange viewings for you, the bad news is that it is likely you will have to conduct them yourself – unless you are willing to pay extra.

David Maslen, director of Maslen Estate Agents in Brighton & Hove, said: “The personal touch also helps to get your property in front of the right people. Traditional estate agents have a database of buyers and are able to match them to properties based on their circumstances and needs. It’s often the small details that push people over the line and these can really be emphasised with a professional acting on a seller’s behalf.”

Faulkner said that it was not ideal for the sale of the property if the homeowner does the viewing.

“As a buyer it is quite awkward having a seller there as you can’t really criticise or ask as many questions. If you do you will probably come across as quite rude and the seller might not want to sell to you.

“The important thing is that the person showing the property understands how to sell it and how to point out its key features.”

Negotiating a final deal

In most cases online estate agents will negotiate offers on your behalf to get you the best deal.

However, some agents will just pass on the information and leave the process up to the seller.

It is important to check with the online agent first if you don’t think you will feel comfortable negotiating directly with a buyer and asking them about their financial circumstances or haggling for a better price.

Maslen said that as high street estate agents were trained in negotiating there was a greater chance of the sale going through.

“A local estate agent will employ trained negotiators to help you get the best price for your property and their skills could get you thousands of pounds more than if you were left to do this for yourself.

“If you remove that support entirely, the chance of a sale falling through increases significantly.”

Hamilton said that experts were on hand at Purplebricks to help sellers negotiate a deal with buyers.

“All offers go through the portal but we make sure we speak to every customer when an offer is made. We can either negotiate on their behalf or suggest they go back with a higher offer. The local property expert is there to help, giving advice and support, but the seller is very much firmly in control,” she said.

Faulkner said having someone on the ground can be advantageous as the estate agent can pick up on any problems with a buyer.

“Negotiating can be done over the phone, but if there is a hiccup there is no doubt that face-to-face is much better,” she said. 

Is the future online?

The growth of online has led to some of the UK’s biggest estate agents moving into the sector to try and get a piece of the action.

Countrywide has rolled out a new digital service similar to what is on offer from hybrid estate agents such as Purplebricks.

The fees begin at £795 and customers have the option of switching to the full high street service at any time.

Connells has also purchased online estate agent Hatched and Savills has taken a stake in YOPA.
While more people are going online, it is unlikely we will see the end of traditional high street estate agents, said Faulkner.

“The high street is not dead, but the role of estate agents is changing. With less housing stock available to sell, high street estate agents need to find other revenue streams if they haven’t already,” she said.

“Agents that want to survive will have to diversify by moving towards a property management role and focusing on lettings, which many of them have already done,” she added.

Hooper-Nash said that Jeffrey Ross has lowered its fees to around 1% as a result of growing competition from online agents.

He said: “It is absolutely not the end of the high street estate agent – there is definitely a market for both. In affluent areas where there is limited stock the high street agents are able to drive a much better price.

“You have to move with the times. We don’t tie anyone into a contract or charge add-on fees for photography or video. An estate agent now has to have a very strong rental business to subsidise the lower fees.”

Higgins said: “The estate agent world is going through immense change, just like retailers are with online shopping. We are already seeing some of the big chains buying up online agents.

“If you want a more bespoke service, a real knowledge of local property and someone to negotiate on your behalf, the high street is the way to go.

“But things have to change. High street estate agents need to be more transparent, more professional and provide better value.

“If you are selling a house do your research and ask the right questions. Be proactive in the process – don’t sit back and wait for the professionals to take over. You definitely have got to be in the driving seat when selling your home as it is the biggest asset you have got.”

Male added: “The online industry is going to keep growing in the coming years, but there will always be people who want to deal with someone face-to-face.

“The competition will up the game of the high street, which will only be good for the consumer.”

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Case study: Selling a property online

Christine Wood and her husband Keith sold their property with online estate agent Purplebricks in July after hearing about it through a family friend.

Keith has recently retired, so the couple decided to sell their Windermere rental property to spend more time together and do some travelling.

Christine says the fee was very attractive and that they really liked the personal service.
One of their key requirements was to work with an estate agent who could offer flexibility around viewings.

She says: “The property is divided up into flats and we have a few tenants in the apartments, so we wanted to be able to do our viewings to suit our tenants.

“We also didn’t want to pay the high fees traditional estate agents charge because we felt we only needed to advertise our property online, as that’s where everyone looks these days.”

They booked a local property expert who took photos, made floorplans and valued the property.
Christine says: “The agent would text us back whatever the time, which was very reassuring.

“Using the portal and the app to accept viewings was so exciting. You could log in for real-time updates, see how many people had viewed the property and message buyers.

“There was the added benefit of being able to see a brief description of the buyer’s circumstances, for example whether they were a cash buyer or had a house to sell.”

Shortly after putting the advert on Rightmove, Christine and Keith had their first viewing.

“We were offered the full asking price and he was a cash buyer. Purplebricks advised us to see if we received any other offers but we decided to cancel our other viewings because we felt we’d found the perfect buyer for us and we knew he would look after our tenants.”

The couple exchanged and completed on the same day – just two months after the property went on the market.

“We particularly liked the direct connection to the buyers. After we’d shaken hands on the sale, one buyer was still really interested and messaged us to say that if the property came back on the market we should let them know.”

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