Is it all over for high-charging, ad valorem obsessed estate agents? It’s a question we’ve been asking on and off for years.
So far, despite the rise of internet portals (Rightmove, Zoopla and PrimeLocation) and the efforts of a series of entrepreneurs, the answer has always been no. The 50-odd online agencies account for less than 5% of UK house sales.
Even Sarah Beeny’s Tepilo, which we had high hopes for, doesn’t appear to have really taken off. It has a clean website and low fees. But most of the locations I entered into it this week delivered a “sorry we don’t have anything in this location right now” message.
For Ed Mead of Douglas and Gordon this is no surprise. Why? Because property “isn’t a commodity”. So “huge monolithic portals” aren’t enough. People go to them with an idea of what they think they want, but without the “human touch”, they rarely find what “they really need”. That, says Mead, is why 40% of houses are sold to people who haven’t even looked online.
“We buy on emotion” and you can’t convey that in pictures – “however cleverly delivered”. You also can’t expect sellers to do their own viewings and negotiations. Selling a house for the best price is a job for a professional.
He may be right. But his views are about to be tested to the limits. Until now, online estate agents have been small scale. No more. “Big business investors are pouring into the world of estate agencies with one goal,” says The Sunday Times, “to smash the old way of buying and selling.”
Stelios Haji-Ioannou plans to launch easyProperty this summer with a board that includes the founder of Rightmove. Paul Pindar, one-time boss of Capita, is also muscling in – Purplebricks.com launches next month and offers what you might call an online middle way – the selling is online and flat fee, but local agents prepare listings and floor plans. Poundland founder Steve Smith’s Estates Direct promises something similar.
Why might these work when previous efforts have not? Funding, says The Sunday Times. These newbies have real money and expertise on their side. Purplebricks is spending £1m on software alone and is fronted by former estate agents.
This lot might not be holding the hands of buyers and sellers as Mead does. But they’ll offer a significantly lower price (£195 basic at Estates Direct); excellent websites; and top-quality photos and floor plans. Many of us will be tempted.
Soon, says Russell Quirk of the UK’s largest online agency eMoov (backed by James Caan), “online will explode and it will be the new norm”. There will be a lot of house sellers hoping he is right. And a lot of older agencies hoping that buyer emotion will make him 100% wrong.