Why online estate agents actually cost you more

Posted on Monday, June 27, 2016

Richie Robertson, Sales Manager at our Langley office, wrote this great post on LinkedIn last week about the difference between online and High Street estate agencies.

It only dawned on me whilst watching the Euro 2016 coverage over the past week or so, just how many online estate agents advertise on a national scale claiming to save house sellers thousands of pounds. Housesimple for example, claim that on average, their customers saved £5000 – a suspiciously round figure.

I am proud to work for an independent estate agent who happens to do very well in the local area, a three mile radius of the office’s location, an area which I know and understand like the back of my hand. Covering this ‘small’ area gives us plenty to do, so much so that it keeps 11 of us in a full-time job. This is the root of what the problem with Online Estate Agents.

When I carry out market appraisals in my area, I understand every anomaly which effects that property’s price, (i.e. Schools OFSTED reports, Amenities, Public Transport Links, Rental Income/Yield, Likelihood of capital appreciation, Demand, Crime Rates) enabling me to give an accurate valuation, which in-turn, maximises the seller’s sale price.

When an online estate agents send out their ‘local expert’, they are quite often just based within a county. If you’re lucky that county will be divided into North, South, East and West; hardly expert knowledge! I wouldn’t be qualified to value a property five miles outside my usual remit, so how on earth does a ‘local property expert’ cover such a huge geographical area? When your ‘local expert’, comes to value your house, they go about it in a completely different way. Firstly, they will search for comparable properties which are on the market, and then they will look for comparable properties which have sold in your area. They will then probably add a bit more on to tally up with national trends and smile politely whilst taking your ‘minimal’ £700 sign up fee.

The difference is that we will give you what I like to describe as a ‘forward-thinking’ valuation, whereas online estate agents will give you an appraisal based on historical trends. On three occasions just this year, I have approached three house sellers who have signed up with online estate agents. These sellers had put their properties on the market for considerably less money than the local market demanded. “But I have 25 people coming to view it this weekend!” is the usual response I get, to which I respond “I bet you have!”.

Once remarketed through ourselves at a higher price, we managed to achieve a sale price which exceeded the online estate agent's valuation by £22,000 on average!

Yes, we charge more, but nobody knows your local market like your traditional High Street agent. Properties are our most valuable assets; don’t put them in the hands of online agencies that may be cheaper but do not know the local area.