BLOG: Britain’s backlash against traditional estate agents
Figures published by Nationwide reporting that house prices have soared by 11.1% in the past year will be welcomed by homeowners who are looking to move.
But with an increase in house prices comes an increase in estate agent commission. While some prefer the services of estate agents many are willing to search for an alternative.
It is a fact that 95% of homemovers will search for property online using sites such as Rightmove, so why do estate agents still have expensive high street branches and charge percentage-based fees?
Before the internet, estate agents were a vital part of drumming up initial interest. And after the initial interest, they would make the sale and pass it on to solicitors. However, many homeowners are now comfortable showing people around their homes and dealing with solicitors themselves.
With the most recently reported rise in house prices estate agents will on average gain an extra £216 in fees, meaning for the average priced home, they benefit from £2,797 in commission just for marketing the property – the equivalent of landscaping the garden, new sofas or sprucing up the house.
With this in mind, it’s unsurprising that there are rumblings of a backlash from homeowners. And the alternative of a fixed-fee estate agent model is being well received by the public – for example, in addition to a multi-million pound investment from the company’s board, the public invested £660,000 in EstatesDirect.com in just 10 days through a crowdfunding website.
When homeowners have saved, painted, decorated, extended, ploughed thousands of pounds into paying off their mortgage and increased the equity in their homes, why should an estate agent take the profits in commission?
Homeowners should be able to reap the rewards of their efforts, maximising any equity for purchasing their next property or putting savings towards retirement and themselves not spending it on extortionate fees.
Ben Grove is managing director of EstatesDirect.com