Online estate agents are making their mark
What move should traditional agents make next?
Online estate agents have been entering the property market and growing their share with increasing pace over the past two years.
Early forecasts showed as much as 50% of property sales would be carried out through online agents in 2020. But these estimates have more recently been lowered to 20%. Still, that’s a lot of disruption to a market where currently 95% of sales are completed by traditional agents.
Online agents typically offer much lower fees. You can sell your home for as little as £500 with an online agent, versus an average bill of over £5,000 with a traditional agent.
However, online agents typically charge non-refundable fees upfront, whereas you only pay a traditional agent if (and after) your house sells.
Traditional agents also bring much more hands-on support and local knowledge. But online agents, along with the emergence of more hybrid players, are beginning to erode this distinction. Purplebricks claims to be the leading hybrid estate agent, offering a nationwide team of ‘local property experts’ and a human face to their experience.
What should traditional estate agents be doing to maintain their share in the face of such competition?
A number of traditional agents have already made moves:
- Connells purchased online agent Hatched in November 2015
- Savills invested in online agent YOPA in June 2016
- Countrywide launched a hybrid model across three of its brands in June 2016
Other traditional estate agents are simply offering vendors a choice of competitive upfront fees versus pay on completion, while maintaining a hands-on high street presence.
If you’re a traditional estate agent, the only thing you cannot afford to do is stand still. Make sure you’re adjusting to the ever-changing market conditions, and offering vendors a choice that suits them.