What is an “Online estate agent”

| October 26, 2010 | 12 Comments
I am very pleased that James Cole of The Big Property List has approached me regarding some research he has undertaken into “online estate agents”.
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In order to produce the report, James had had to define what he considers to be an “online estate agent” and so to kick off the publishing of the research here is his definition of an online estate agent.
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The Big Property List is a UK Property Portal the displays any property adverts submitted to Google Maps by presenting them in a familiar property portal format.
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What is an online estate agent?  (by James Cole)

A recent post on our new UK property forum asked what value traditional high street agents offer over and above online estate agents, and it got me thinking.  What is an online estate agent?

It seems obvious, but what actually distinguishes an Online Estate Agent from a common or garden Estate Agent?

A website?  Well, all estate agents have a website.

That they don’t have an office?  If an online estate agent is to offer a national service they will need at least a head office for their marketing, IT, head office and management people.

That they don’t have a High Street office?  Well, that’s getting closer to the point, but what if a High Street Estate Agent moved to a retail park and put their property posters in the window of the high street newsagents – would they then be an online Estate Agent?

To me the ‘online estate agent’ debate draws a line in the sand that’s unhelpful for the property industry and seems to focus on the idea that ‘online estate agents’ are internet people from outside the industry starting websites from their bedrooms. And what’s more, they’re trying to take the jobs of hardworking people in suits that sit in offices in the high street and park their mini coopers out front.

To me that’s a too simplistic a view which polarises the discussion and prevents recognition of the wider driving trend which is simply a shift away from the high street to save costs.  This is nothing new and the same thing that happened to nightclubs, supermarkets and music stores in the ‘90s and 00’s.

The real thinking to be done is how much to move off the high street, how quickly and how best to serve the consumer. After all, houses aren’t like music tracks – you’ll never buy your house online using PayPal and download it to your hard-drive – but the marketing can move online.

Many ‘High Street Estate Agents’ are entrenched in a business model which revolves around the office and in my view run the risk of being the next Our Price rather than HMV.  Classifying an Estate Agency as offline as opposed to online is a sure way to commit yourself to the history books – and yes new entrants with an eye for online marketing and without the constraints of an existing High Street business model may come in and move faster than you can change.

In my view, the move from offline to online, in marketing focus and budget, from print and High Street to online will be seen in four main sub-trends:

  1. Estate Agents spending more time and money on their websites, social media and online marketing and less on print advertising.
  2. Estate Agents reducing overheads and in turn offering low fixed fee services by moving off the High Street (even to the point where agents work from home).
  3. New entrants to the market, not tied in to the culture, cost and structure of a High Street office set up with home based agents and online marketing and get classed as ‘Online Estate Agents’.
  4. Existing ‘High Street Estate Agent’ brands using a separate brand name to compete online without high street offices as a way to gradually change their business model to focus efforts online and reduce cost. (such as Spicerhaart have done with isold.com)

Staying power

We’ve been watching the progress of so called ‘online estate agents’ websites very carefully for the last 18 months and it’s true that there’s a new one each week and most disappear within 6 months – but there is a trend emerging that cannot be ignored.  The quality ones are growing, and far from being back-bedroom schoolboy operations (no offense intended to back-bedroom schoolboy operations – remember Google started there) they are being run in a very serious manner.  And by property professionals – people like Danny Williams, a former Estate Agent, at One London Property, and Spicerhaart, who own a majority stake in isold.com to name just two.

What’s more they employ Estate Agents.  You know, people that drive minis and wear suits.  They’ll come around and measure up your house, take photos and value the property.  They’ll even do viewings and take potential punters for a look-see – then try to negotiate a sale and do things like instructing your solicitor and following up the dreaded chain.  Hang on, doesn’t that sound like an estate agent?

Well, yes, they are Estate Agents – that’s the point.  They just don’t have an Office on the High Street or a name that your parents would recognise (their business name probably even ends with .co.uk).  But don’t be fooled, some of them know how to sell houses.

Tomorrow James will be publishing his comparison of online estate agents report and we hope you will return here to see the data and to get involved in the debate

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  1. We are a new entrant to the lettings market, with a real office, just not a swanky and expensive one on the High Street. The cost savings mean we can offer our clients low fixed fee renewals rather than charging renewal commission which landlords rightly despise.

  2. eMoov says:

    This article is spot on. Online estate agents are misinterpreted, often as another breed of ‘private sales’ websites.
    We set up http://www.eMoov.co.uk at the beginning of this year and it is REALLY taking off. People simply don’t want to pay sky high fees anymore when there is a viable alternative. The online model works and in fact such an operation is fundamentally no different to a High St business except that the whole of the UK is covered from one office. On the basis that buyers (and indeed sellers) do not venture into fancy offices anymore, preferring the comfort of their laptop, then why pay £3k or more for a service you can get for £300/£400.
    Welcome to the future of estate agency 😉
    The past cannot continue to be justified.

    • housingdabble says:

      Thanks for your comments eMoov

      I can see these models are becoming much more widely accepted and wanted by consumers.

      My only issue with your comment is the closing comment that you should have to sell it on price. If your service is better or at least equal you should be able to avoid fee cutting

    • john says:

      It seems like I am a party pooper or wowser as the aussies say in regards to eMoov.

      When I did my research a few months ago there were no dissenting voices of all the opinions I found online, they were all agreed it was a good thing and so nice to save the estate agent’s fee of 3k or more. Their enthusiasm was akin to a religious revival meeting !

      However my experience is a tad different. In 3 months in Nottingham I have had only ONE enquiry. This was from a local couple who declared my house ‘stunning’. The house is certainly not overpriced for what it is, and considering the area it is in.

      So having paid several hundred pounds upfront to eMoov I now find myself in the position of having to market with a local estate agent who are strong in the area.

      So my advice to those thinking of eselling on eMoov or elsewhere is ‘buyer beware’. Check out the experience of other emove sellers in the area, and how many viewings they have had. I noticed an eMoov house a couple of miles away a few weeks back that had not sold. The last time I looked their board had been replaced by a local agent’s. So I guess I’ve come to the same conclusion as them – the internet isn’t always better. I grant it’s a lot cheaper – if it works.

      I also think it is disingenuous and misleading of eMoov to quote their fee as £395. The board is extra, as is the energy certificate (EPC) so when VAT is added on you are paying well over £500.

      Also their board seems to be more about advertising their services as selling your house. They should consider giving free to prospective clients one of those additional signs that tag onto the board that says what is house is ‘e.g. semi 3 bed extended with garage’. That way they would at least
      get some passing trade.

      Also not everyone is internet savvy so say older potential buyers might not even go on the net, hence you could be completely missing that target market.

  3. We are pushing our online activity, but finding its not as easy as people think to knock these large national estate agencies off their positions within the search engines. With this said, most of our business actually walks through the door.

  4. There is no doubt that is now a place in the market for online estate agents. They are currently not really challenging high street estate agents and are not going to be the right option for everyone. However, they will continue to grow and perhaps one day will drive high street estate agents out the market in the same way travel agents were driven out by online equivalents.

  5. Peter says:

    Online estate angency gives you a chance to advertise your property in a unique way, letting all possible buyers on the internet veiw your property at a touch of a button for a very reasonable price.

    We have plenty of property to let and buy in the Leigh/Westcliff/Southend area. Please visit out website http://www.thinkonlineproperty.co.uk

    Thankyou

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