Online firms are failing sellers and charging them upfront for their failure, an agent has said.
Chris Wood, of PDQ Estates, said that online agents – some 15 of them – secured 49 new instructions in the first six months of this year in his area of operation.
Of these 49, just five now look to have gone to exchange –two more than when Wood posted his blog.
Wood has used Zoopla Pro statistics to measure activity across Truro postcodes in Cornwall.
He said he wondered if other EYE readers are doing similar research in their postcodes.
He said: “The online stats are compelling in my area, especially if repeated across the UK.”
In his blog Wood says most customers of online or non-geographic agents are simply “paying out for failure”.
He goes on: “Over 93% of customers who shelled out the average £600 or so up front so far this year to these firms to market their homes have failed to attract a buyer!
“Of the 49 new instructions, only three have exchanged contracts according to the data from Zoopla and Primelocation.
“This compares to the area average of over 50% success rate for traditional office-based local agents, with some agents achieving even better individual results for their clients.
“Like my own firm PDQ, almost all of these office-based agents have a ‘no sale, no fee’ policy, meaning we only get paid for a successful sale for a full estate agency service.”
Wood has launched his own budget offering – perhaps ironically, given his opposition to online agents which recently culminated in a partially successful complaint by him about eMoov to the Advertising Standards Authority.
Calling it a high street agent at online rates, it is offered in addition to the firm’s standard full services, and costs £575 including VAT, payable upfront.
The budget service offers almost everything that the full service does, including EPCs, floorplans, particulars, and listing on Rightmove and Zoopla.
It does not offer accompanied viewings or sales progression, but sellers can upgrade to these.
Wood said it looked as though he has gone over to the “dark side”, but that his new service looks to be working well as a concept, with one seller attracted by the low cost but subsequently deciding to upgrade to the full service.
@Jon Bell at Barclays how much money can I borrow based on these figures?
My income for the first 35 weeks of the year is 11 instructions which bring in net of Vat £500 ish , so total income of £5500. Don’t worry about minimum wage, as I’m self employed, it’s OK to earn just £4.20 an hour.
(73p/ hour for a 365/24h service)
73 instructions for 14 companies in 35 weeks! can you imagine the reception figures like that would receive if they were presented in Dragon’s Den? Oh, wait a minute isn’t it a Dragon and his mates who are recommending investment in this dynamic emerging/ disrupting industry sector?
Based on these figures how on earth is £25,000,000 forecast profit by June 2016 going to happen as one of these firms predicted?
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Don’t be silly Robert,
You know the figures do not add up thats why they crowdfund as you only need to sell a dream 😉
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I feel sorry for those who are being duped by crowd fund pitches backed by the essential “HPI” (high profile investors) The CEO of PB even referred to such investors “following like sheep”
It is only my opinion but I think the media needs to take a more informed look at what is going on before blindly promoting it as a cure all.
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This, to me, just proves that initially choosing market their property with a cheap online agent will leave sellers paying more in the long run as they’ll eventually choose to go with a different agent, normally a high street one. Not only will they have to pay an up front fee with these cheap online agents, but most charge a fee when they are disinstructed too. That’s how they make their money.
Not forgetting that the property would have been on the market for a while, and the seller will have to drop the price to get the same amount of interest in the beginning. The cheap online model works, but only if they put in the effort to get things sold – unfortunately they can’t do this as they work more like a call centre with their staff on low wages and not really caring about the client in the first place (source: I know a few people who have worked for a few different agents like this, and they hated every minute of it)
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Ok….. lets lay part of this thread open to our venerable Online Only Agents/Commentors…..
I’ll settle back and await their input….
Now pay attention everyone because in normal circumstances we would be paying up-front for this input!
Seriously tho’…… please go ahead
Ahem…. sorry…. I’m listening…..
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This is a really good article, Russell Quirk will be over the moon that emoov being top of the exchanges………with 2!…..a real endorsement, well done.
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I applaud your use of sarcasm Wilko, often dismissed as the lowest form of wit by those on the end of it but very much regarded as the funniest by those who appreciate it.
But seriously just 2 completions in 8 months in 11! postcode towns and they are the best, the peak, the No1. The best bit for me is the ones Jon Bell uses as a shining example of brilliance managed 11 listings but didn’t sell a single thing.
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I’m not sure how we ended up within Chris Wood’s data? We’re a husband and wife full agency service working on a ‘no sale no fee’ based in Falmouth serving Cornwall.
We’ve instructed 9 properties so far in 2015 of which 4 have completed and a further 2 are SSTC – this is based on an average of 2 (accompanied) viewings per property to achieve a sale.
Take us off the list please :o)
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Hi
Happy to take you off the non-geographic agents list next time I run it. My mistake, your excellent results make these firms figures look better than they should do 😉
Chris Wood – PDQ Estates Ltd
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