An agent has said that it is “not so easypeasy” to sell properties online. Aimee Johnson, of Bettermove.co.uk, was responding to Eye’s story on Friday which featured high street agent Chris Wood’s analysis of an online agent’s performance in his local patch in Cornwall.
Johnson said she particularly took issue with the statement that “all online estate agents charge upfront fees to sell your property rather than on completion”.
She said: “This isn’t entirely correct. Bettermove is an online estate agency but charge in the exact same manner as a traditional estate agent, i.e. fixed commission on successful sale.
“Therefore we are as equally as incentivised to sell a property as a traditional agent. We have to work for our money. Also, while we have no high street shop front, Bettermove has local agents in different areas, with knowledge of that area.”
She went on: “It is unfair to tar all online agents with the same brush.
“Some offer all the services you get from a traditional high street agent, including taking photos of the property, preparing a description, arranging viewings and vetting buyers – but can do this at a lower rate because they don’t have the costs associated with running high street premises.”
Johnson said that Bettermove, which charges 1% on a sale, said: “The key to selling a property is pricing and exposure.
“Online agents who charge up front often use ‘valuation flattery’ to gain market instructions, in order to lure the vendor into a false sense of security so they are more likely to hand over the upfront fees, typically £299.
“However, because we charge a fixed fee on successful sale only, each instruction costs the company, so we are as equally motivated to sell the property as the vendor.”
She said Bettermove has 25% of its current listings under offer. Average sale time is claimed to be 88 days.
I wonder if Aimee would like to explain how £132.50 is enough to "sell" a property?
Given that the £159 includes VAT I can't work out how or why anyone capabale of selling over 200 properties a year would do so to earn an average UK wage.
Good on Aimee if she can pull off the Avon or Amway model with property but I don't think there is enough money going into the system to achieve that. Almost without doubt the first 8 months of next year are going to be really tough on her business model. (5 months to the election then 3 months for the market to get moving again assuming Yvettte Cooper isn't Prime Minister)
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I wish these online agents will stop using the "associated costs of a high street office" the only saving they are making is on staff! They do not have staff to help sell property so they save on wages and commission! They still have a serviced office, they still have portal charges, they still have a tax liability.
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these guys just aren't going to make enough money to make it work – even if working from a spare bedroom! my gut is all us high street agents will slowly morph the same way recruitment companies and travel agents have but the nuts and bolts of the business will still be the same. PS we looked at non 'high street' offices and they are just as expensive!
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25% of stock under offer / sold STC is nothing to crow about.
– that's well below the UK average of 35% (which is still pretty poor to be fair).
Given that 38% of their unsold stock has had a price reduction one has to ask questions about their ability to secure instructions at a realistic price.
Finally, when you take a closer look at the quantity of their stock that is unsold (and the amount of time it's been on the market) i think it's clear that Bettermove are hardly the most effective route to a swift sale at the maximum possible price.
At least they don't fleece their clients for an upfront fee. Kudos for that!
To be fair to them though, their metrics are pretty similar to a lot of high street estate agents.
Report card would read – "Must do better" (same goes for many traditional EA's too).
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The only way to make a profit with those fees is to sell it within a week, after a visit by a rep to approve the listing, say £50, then the portal fees for a month say £25pm per property, so 75% of the stock must be losing them money. I know this market as I was in it for years, even charging £299+vat for 12 months it started losing money with the RM fees increasing, you need to charge the owners every month or quarter to keep the advert alive, then they would probably decide to reduce their asking price as well when the bills keep rolling in and no viewings.
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I can understand PIE offering someone a right to reply and the fact that Aimee may have taken issue, but what I have issue with is online only agents, who attempt to cover a nationwide area and then, come on to a forum with estate agents who cover local areas and try to tell us they "do the same thing". You can go out and try and sell to the public your tale that you do the same Aimee but WE ALL KNOW that there is no way that you can offer a customer anything more than a lottery ticket they will move, when selling from distance and here's why. Firstly pricing: At best you are going to look at RM and Z and use their price comparison guide. Thats it isn't it. You won't have sold anything nearby, you won't know what the property three doors away sold for the previous week, at best you know what its on the market for, NOT what it achieved. You won't know how a particular style for a builder varies and the difference that has traditionally meant in price. You won't know how many particular buyers are looking in a particular area and what reason they are. You won't know what influence the local school has, irrespective of the ofsted reports and how much extra over similar styles of property that offers. you won't know where the rough areas are and whether a road is affected by them (because not all are), you won't in fact even be able to tell buyers anything about the area at all will you? So most of us proper agents KNOW your price for clients is nothing more that a guess. Secondly selling: You don't have an existing database of buyers looking in the area, you again are just relying on RM or Z. You don't have someone who has sold a similar property who might trade up if given the right information, You don't have people calling about another property that you can introduce to others you are selling. You don't cater for the older person looking to downsize who may in fact not go near a computer. You do not in fact advertise the property locally or have an office locally that a potential buyer could call in to discuss something. You could not cope with a buyer who wants to pop back three times with an agent before making a decision or in fact deal with someone who calls up and says " I can see it now". In short by not being local you remove the chance of a seller getting not just an offer but the BEST offer they could for their property. As we are talking about SELLING and not just getting an offer, you do not have the staff available to ensure that every sale gets the full attention it needs to get it to completion. If something adverse on the search comes up you do not have the required local knowledge to deal with it. In fact there are very few of the problems you can in fact deal with from afar. I'm actually boring myself now but lets get one thing straight. You are offering nothing more than the reduced chance of someone selling their home for a cheap fee THAT'S IT. So if you have a problem with comments on this site, proliferated by agents who do the job properly, can I suggest that you just don't read them because WE know you are charaltans whether you charge upfront or not, because we know how things ACTUALLY work.
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Beautifully put
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'valuation flattery' is not just a product of the online model, but a tool used by agents across the industry to win business. Most online estate agents provide an electronic valuation tool, that is rarely created by themselves, to generate a land registry based valuation, so it becomes very hard to 'bump up' the price. I find it very hypocritical to accuse all online agents of this, when surely a commission based model more often leads to inflated valuations. The recent online agent 'bashing' is clearly a frightened attempt at PR from scared agents who, in an increasingly online world, see this market segment growing rapidly in the coming years.
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And if you think a Land Registry based valuation is accurate in a moving market place then you are in the wrong profession!
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As I'm sure you are aware, the House Price Index data is made up by sales that have more often than not been valued by high street agents. So unless high street agents are missing the mark, the valuation that online agents provide combined with the sellers local knowledge should reflect a sound asking price.
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What do you do for a living Tom?
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RealAgent, as you may have guessed I work for an online agency. I do take into account what you are saying, as we are constantly looking to improve our services but I do not believe that there is not room in the market for efficient forms of both models.
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How long have you been an 'Agent' Tom?
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Except on vast estates of similar properties where even an educationally sub-normal hamster could have a reasonable chance of getting within 5%, most online valuation tools are usually pretty useless, other than to get someone to within 10 to 20% of what a property might sell for. As realagent says above, non-local agents (online or otherwise) cannot hope to know what that special buyer might pay or, the subtle nuances of the market at the time of sale.
As for running scared of online model as some have said, as I have already discussed in my article, the largest online agent in my area has a 0.14% share of the market. I'm not losing any sleep at present.
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Long enough Benay, long enough. I did read your article on Friday Chris and found it very interesting. While I do concede that valuation from afar can be less accurate, it provides a free tool to allow people to overcome another barrier in marketing their property independently. The fact that it has caused such a reaction and warrants two articles acts as undeniable proof that this market segment is making waves.
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It amazes me that when people mention the 'services' they deliver on here that they in effect list the admin tasks completed. Estate agency is 90% about Lead Generation and Lead Conversion. It is how to specifically Lead Generate that sets agents apart. The on-liners advertise on portals to Lead Generate. Real estate agents are Lead Generators first, estate agents second. And for those who do not know how to Lead Generate (Marketing and Prospecting) then when the market moves to a Buyers Market, they will suffer.
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She sounds like a thoroughly nice lady and well done for responding to the article but it all whiffs of a plucky sole trader running it from a flat in Leeds – Jonnie
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If she's selling peoples houses and saving them money, what's wrong with Leeds?
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Absolutely nothing – Jonnie
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Apart from their fooball team
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Bradford supporter?
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So says a representative of a company who's franchisor Whitehall Franchise Ltd went into voluntary liquidation in August http://stuartsblogdotorg.wordpress.com/tag/whitehall-franchise-ltd/ and sister companies Gateway Homes UK Ltd have starred in and been exposed for the scam artists they are on BBC Inside Out, Daily Mirror, Sunday Express, BBC Rip Off Britain ….. So who exactly are these "local agents in different areas, with knowledge of that area" when 85% of the franchisees have gone bust or failed and ceased the franchise. There are only about 5 or 6 franchisees covering the entire country at last count …..
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