New kid on the estate agency block, Purplebricks, has been under scrutiny recently: questions have been asked about their business model, their conversion rates and market share. In a robust response Purplebricks has challenged the methodology of the report, the accuracy of the numbers and indeed the objectivity of its authors.
Whilst this industry spat may be amusing to the disinterested it nevertheless highlights a real issue for those planning a house move: how do you choose your estate agent? You now have the opportunity of instructing a traditional “high street” estate agent or opting for an organisation that only has an online presence. The principal distinction is fixed fee or commission, but is it as simple as that? True the man on the TV ad discovers that he paid more in fees to his estate agent than he would have done with Purplebricks but before you reach for the milk jug consider the following.
Online estate agents will generally charge you a fixed fee payable “up front” that is commonly far less than the commission payable to a traditional estate agent. But in return for this reduced cost you are likely to get less local knowledge and expertise and will have to conduct the viewings yourself. Lots of you won’t be put off by that as you’re probably the best salesperson of the house/flat you have lived in and loved. You may, however, find it difficult to build up a relationship with anyone at an online estate agency as you will essentially be dealing with a glorified call centre, love ‘em or hate ‘em. Also if you don’t find a buyer the fee you have paid has been wasted so there is a degree of risk. But it goes without saying that at a time you’re incurring the huge costs of relocating – and don’t get me started on levels of stamp duty on your purchase these days! – to be able to save some money on estate agents has to be good, hasn’t it?
The other side of the coin is that if you decide to go down the local estate agent route you will be looked after by someone who knows the area inside out, who will conduct your viewings for you if that would make you more comfortable, will have a list of potential buyers on their database, will themselves have a sophisticated online presence and will be someone with whom you can develop a relationship. Additionally if you fail to attract a buyer generally no commission will be payable. Perhaps the man in the advert was a bit hasty and should have put his milk to better use!
If you are finding it hard to decide which road to go down then do take a little time on research. There are many useful websites that can offer guidance on this such as Which?, the Home Owners’ Alliance and others. Talk to friends about their experience of selling their own homes; get at least three estate agents in and listen carefully to what they say and don’t necessarily go for the highest figures; find out how they vet possible purchasers to weed out time-wasters; go to their office anonymously and see how you are received.
A final tip: beware of estate agents’ sales pitch to get you to use their “pet” conveyancers. The number of times a client has told me that the estate agent said it would “all be under one roof” and “so much simpler and more convenient” to use their solicitors. This is rarely the case and the likelihood is that the solicitor recommended will be at the other end of the country, impossible to meet face to face and there will be no cost saving at all. Of course what you are not being told is that the solicitor will be paying the estate agent handsomely for the referral. Be warned and insist on using the solicitor of you own choosing. No need for red faces later.
If you have been affected by anything in this article do give me a call. We’re here to help not confuse. The milk will be in the tea or coffee when you come to see us!