Can online estate agents save you money?

From the beginning of property trading there has been a middleman; a middleman who sells or rents the property on your behalf and is awarded a hefty fee in return. This transitioned into the local estate agents that we know and love today, who, after successfully selling your property, will take a nice percentage of the final sale. Other than selling your home privately, this was the only choice for most sellers. Yet it has always left a bitter taste in our mouths. Something seemed unjust about your home being sold and someone else walking away with 1.5 – 5 per cent of your profits, not including sales added tax.

A new era of estate agency has arrived: the era of online estate agents. Bursting onto to the real estate scene in the last five years, the online estate market is looking to climb the property ladder and become the go to way to sell a home.

What makes them different?

The unique selling point of most online agents is their flat fee. These agencies will charge the users a flat fee per property regardless if a sale is made. This becomes a cause for concern as your property not selling would mean paying an unnecessary fee, however, a successfully sold property would result in thousands saved.

Aside from this, the virtual agencies boast that properties are not just listed on their platform, they are listed on several platforms simultaneously making it easier for thousands to view your home. This is a justification to the flat fee business model as it increases your chances of selling compared to a traditional estate agent whose marketing is generally limited. 

The Agents

The idea of saving thousands is very enticing, but let’s take a look as to how these online estate agents actually measure up to local agents. In the UK, popular online agent CastleSmart boasts a saving of £7,105 on a £500,000 property exclusive of VAT. While , one of the leading online estate agents, using their price estimate tool on an identically priced home, claimed a saving of £8,505 inclusive of VAT. These statistics were based on an estate agent charging a 1.5 per cent fee, though this fee is normally a starting point and liable to increase.

The Evidence 

Is there any evidence to support such claims? Speaking with a Tepilo representative online revealed that 200 houses were successfully sold last month. Another successful online agent, eMoov, has reported over 5000 homes sold so far in their few short years of business.

The Bristolians

Up and down the UK, the online agent trend is spreading like wildfire. Yet, the city of Bristol stands unaffected. Online estate agent Urban revealed that a mere 12 houses were sold in Bristol via their platform. Why has the craze not yet reached Bristolian doorsteps? There are a number of reasons, but it’s mainly due to the youth of the industry. Online estate agents only emerged in the past five years, prior to this everyone visited their local agents who had experience and tradition.

While the savings look good, it seems as though Bristol will allow the other major cities to be the guinea pigs in this new-fangled market, though with 98 per cent of property sales beginning with an online search, it’s perhaps only a matter of time. 

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