Selling your home: should you use an online estate agent?
The cost of selling your house can be large, with estate agency fees making up a significant part of the overall bill. In the past few years, a whole host of 24/7 online estate agents have appeared, hoping to disrupt the traditional market by delivering the same service at a lower price.
Online estate agents are now estimated to have around 3% of the market share and there were 261 registered firms in the UK as of 30 April 2016, according to the Property Ombudsman (TPO), which resolves disputes between consumers and property agents.
On the face of it, these online propositions look a lot cheaper. The average high street fee is 1.5% of the final sale price of the property, but charges can be as much as 3% if home sellers opt for multiple agency contracts. On a £300,000 property, that means you could end up paying anywhere from £4,500 to £9,000. In contrast, online agencies charge a flat fee of around £500.
So is the cheaper price worth it?
The first thing to consider is what the flat fee actually includes. There are a range of packages on the market, all with slightly different offerings.
Angela Kerr, director of the HomeOwners Alliance, says: “Don’t take online agents’ claims on face value. If they say they can sell your home for £475, we advise consumers to check that includes all the essentials – professional photos, floorplans, description and being placed on the main property portals, as well as VAT. And make sure you know how long the agent will be marketing your property for.”
The TPO says: “Some online offerings do little more than act as a notice board for your property, while others provide a full service. It would be advisable to obtain quotes from three separate agents – whether online or traditional – and check the terms carefully. If a fee is significantly less than a competitor, ask why. Always be clear about what the fees are before you commit to using a service.”
What should home sellers look for when choosing an online agent?
Kerr says it’s best to think about what’s important for you, such as whether you want a ‘for sale’ sign, if you want someone to conduct the viewings and whether you want someone to handle the negotiations on your behalf.
Look at the different packages on offer as some offer a ‘pay on completion’ option, which works for many as they feel it incentivises the agent to sell the property, but ‘upfront payment’ packages may work out cheaper.
Kerr says: “Don’t be pushed into using their conveyancing service or mortgage broker even if they do offer you a reduction. Get the quote and details of what’s included.
“Also don’t forget to haggle. Just because online agents are cheaper than high street ones doesn’t mean they aren’t still making money along the way. You have nothing to lose asking for money off the Energy Performance Certificate (EPC), for example.”
You can also read reviews on third party sites, such as Trustpilot, to get an idea of customer satisfaction levels.
What about home buyers?
For home buyers, be aware that in most instances you’ll be shown around the property by the seller. This shouldn’t put you off and you should ask the same questions as you would of an agent.
The process may also be quicker as homebuyers can go online 24/7 to arrange a viewing date and time that suits you both, rather than waiting for a high street agent to open and for the viewing to be conducted within usual working hours.
Five online estate agents to consider
With eMoov, you can choose its ‘pay now’ package for £595, including VAT, or its ‘pay later’ package for £995, including VAT when your property is sold.
With both you receive a valuation, home visit, professional photography, listing on Zoopla, Rightmove and Prime Location, a ‘for sale’ board, floorplans plus help with negotiation.
It also offers free mortgage advice and a conveyancing quote – though you should always get other quotes as a comparison.
The fee doesn’t include an Energy Performance Certificate (EPC) – this will cost an extra £70. Your property is marketed for 12 months though there is an option to freeze this time period.
eMoov says in 2015 it sold properties totalling £676m, and achieved asking price in 99% of cases. In 16% of cases, properties were sold above the asking price.
It claims to have saved the UK public over £20m in high street fees, an average of £4,200 per person.
HouseSimple has three fixed fee structures all including VAT: £345 if you pay upfront, £395 upon sale or after 12 months (whichever’s first) or £895 for the ‘no sale, no fee’ package which you pay once your sale is complete.
If you use the firm’s own conveyancers you can get a discounted fee. HouseSimple claims doing this will reduce the fee and speed up the legal part of the process by an average of 50%. You can also get a discount by using its mortgage brokers (London and Country).
After you’ve signed up for your free trial, you arrange a date and time for a valuation assessor to visit your home to take photos and arrange floorplans.
The advert then goes on Rightmove and Zoopla and you’ll need to show potential buyers your property. The fee includes an online messaging service but an EPC is excluded and costs an additional £90.
HouseSimple’s marketing period is 12 months and it also includes a number of options if you don’t want to conduct the viewings: an open hour is £75, a single hosted viewing is £35 or for unlimited viewings in three months it’s £245, while the six month option is £295.
HouseSimple says its customers sell their home for 99% of the asking price or more and on average, it saves users £5,594 per house sale. The firm says to date, it has sold or let £1bn worth of property, saving customers £13m in fees.
This ‘hybrid estate agent’ came on the scene in 2014 and to use it will cost you £798 including VAT to sell your property outside of London, or £1,158 in Greater London.
You can choose to pay up front or defer payment up until the earlier of either 10 months or when the house is sold.
A ‘local property expert’ will visit your property to provide a free valuation and you’re given their direct number and email address. They’ll take the photos and create a floorplan and the advert and it’ll go live on Rightmove and Zoopla.
Again the EPC is not included in the price and this costs an additional £99 including VAT. For additional fees, Purple Bricks can also handle the viewings (£110) plus insurance and mortgage referrals. A spokesperson says there’s an “open-ended marketing period” for your property.
Purple Bricks says that on average, it saves a home seller £4,158.
The company, founded by property developer Sarah Beeny, has two sales packages: ‘pay now’ or ‘pay later’.
The pay now upfront package costs £495 and includes instructing Tepilo as your estate agent, sales management and progression, your property listing on Rightmove and Zoopla and legal set-up.
There are also optional add-ons, such as a ‘for sale’ board which costs £60 extra while professional photography is £120 and floorplans cost £75.
With the pay later package, the fee is £795 and contains the same as the up-front bundle, but the price also includes professional photography, floorplan, ‘for sale’ board and a premium listing on Rightmove.
With both packages, it costs an extra £90 for the EPC. The marketing period is for six months and if you want to extend this, it costs £180 for another six month period.
You will be approached by Tepilo’s conveyancers who will offer a discounted rate. However, if you choose not to use their conveyancers you’ll have to pay an additional £295 including VAT irrespective of which package you go for.
For a fixed fee of £780 (£1,140 in some London postcodes), you can sell your property via YOPA. You can also choose to defer payment until after you’ve sold or it remains unsold after six months and YOPA confirms this is at 0% so “you won’t be charged extra”.
The fee doesn’t include a host to conduct viewings: accompanied viewings are £150 extra. Your property will be listed on the big property portals such as Rightmove, Zoopla and Prime Location.
Properties are listed for six months and if it doesn’t sell within that time frame, you can pay £150 extra to extend the term.
As with the other online agents, an EPC is extra – £75. The fee does include a ‘for sale’ sign, photos and floorplans however.
It’s important to note that if you market your property with another estate agent, you must check this is allowed first before also using YOPA. Your listing can be stopped with YOPA, providing you give 48 hours’ notice and it doesn’t go live, you will receive a refund if it’s “not incurred any time or expenditure”.