Beware of the hidden problems when using an online agent to sell your property
It can seem as if all estate agents are the same. With little variation, the decision inevitably comes down to the fees they charge.
But could the seemingly 'cheap' fees be costing you more in the long run?
Selecting an estate agent to sell your home can be tricky.
It can seem as if all estate agents are the same.
They all wear nice suits, drive nice cars, and use the same jargon and sales techniques.
With little variation from one agent to the next, the decision inevitably comes down to the fees they charge.
And there's quite a variation in fees. The costs can differ by thousands of pounds between the independent agent on your high street and the online or corporate agents.
Independent, high street agents would never have the advertising budget to run a TV campaign. So the online agents can seem bigger and better than your local independent brands, and the fees are undeniably cheaper.
But, as a seller, there are many reasons that you should be wary of online agents. They are definitely not for everyone. Could the seemingly 'cheap' fees be costing you more in the long run?
It's a numbers game. The nature of their business is volume.
They need as many properties on the market with them as possible to make their business model work.
They can't possibly know you and your property. Of course, one of their local property experts will carry out your valuation and maybe even accompany your viewings if you pay them to do this. But it will not be them dealing with enquiries from potential viewers. That's handled by a large central office and predominantly by email. You'll never benefit from cross-selling other viewings, which is standard practice in an independent estate agency. This is because the call centre simply doesn't know every property they're trying to sell.
Be prepared to get your hands dirty. It's really a DIY option. You're responsible for all viewing appointments unless you pay them to do this for you, which is added to their fee. When an offer's made, it's simply a case of yes or no, and it's done solely by email. You're sent an email to say Mr & Mrs X would like to offer you £xxx, do you accept or not? There's no discussion or advice, so not really a 'negotiation' at all. Simply an offer message that you either accept or decline; there's no real way to counter offer. If you've ever sold a property before, you'll know that there are many different elements of a negotiation. Depending on the proposal, perhaps you could include specific items or exclude them. Maybe the timescale for sale could be a factor - they might pay more if you wait a little longer for the deal to complete, or you could accept less if the completion date was speedy? It's rarely a straightforward yes or no when there are so many moving parts to a property sale. This, therefore, results in fewer offers, ultimately reaching acceptance.
Progression can be slow. Once your sale is agreed upon, you'll move into the legal process. Firstly, a clause in your agreement with online agents usually says that you must use their solicitors to get their lowest fee deal. This means that you'll be using one of the largest conveyancing firms in the country, again, running from a central office and being handled predominantly by email. They'll not be familiar with your location or property style. This might be fine, but it could be problematic if you live in an area with certain nuances. Perhaps your area has a mining history, or your property is built on land close to a military base. Or maybe your property title's a little quirky and has flying freeholds or unclear boundaries. These things are not usually an issue, and local solicitors will be very familiar with how to handle them. But if your property is anything other than totally straightforward (and properties rarely are!), you may run into difficulties. And these difficulties will only be exacerbated by being dealt with entirely by email. Call me old fashioned, but I think that most issues are best resolved by an in-person meeting.
Let's get personal. There is no personal service. You are essentially just a file number. You will likely never speak to the same person twice if you ever get to speak to anyone at all. It is simply impossible to have a personal, tailored service when the company is trying to sell hundreds of properties all over the country at one time.
Pay the piper! And finally, you'll pay them, regardless of whether you sell the property or not. Often there is an option to delay the payment for 6 months, but this involves you entering into a loan agreement. There is no getting around it.
The devil is in the detail. Occasionally there are deals that you can get your money back if the property is not sold within, say, 10 months. But this means you're tied to that agent for 10 months, or you can kiss goodbye to your money. If you're given an offer within 90% of your asking price but choose not to accept that, the company won't refund their fees. So, you must check the small print! This is especially true when you consider that traditional agents see most offers much closer to the asking price. In the current market, many sales agree OVER the asking price. 90% is a relatively low offer in a seller's market.
To put that into context, traditional estate agents are paid only on the successful completion of a sale. Most agents do not have a fixed contract term or a withdrawal fee, so they are only paid when successful. If you're not happy, you can walk away without any consequences.
It makes no difference to an online agent if the property sells. They are paid on INSTRUCTION of a property to the market, not the sale.
Ultimately, the fees are cheap for a reason. It doesn't matter if they sell your property, and it doesn't matter if they get you a good price!
You'll not be able to chat through the options for your move, and there will be no advice or help.
Suppose a traditional estate agent can sell your property for just £2000, more than 90% of your asking price. In that case, they have more than earned their fees, and you've had a pleasant moving experience - everyone's happy!
To discover how our proven process helps sellers sell their homes for the highest price in the shortest amount of time, get in touch today!