Late Autumn - 11

Signing Up with the “Parasites”

So we’ve finally gone and done it, we’ve signed up with an agent to put our house on the market. It’s almost exactly three years since we pulled out of our last experience with the joys of the property market, so hopefully this time around will be less frustrating. We’ve had one hiccup so far which is that our local solicitor who spotted the issue over the parking at the Bewley Homes development last time has now retired so we’re scouting around for a new solicitor, however at this point we’ve been running the gauntlet of the local estate agents.

Talking to those who have moved recently we haven’t come across any ringing endorsements of any of the local agents, most people seem to regard dealing with them as a necessary evil. So we’re starting from a pretty blank sheet of paper.

My thoughts coming to selling the house have been that online exposure is paramount, so any local agent that is not putting properties on both the major property portals – Rightmove and Zoopla – is instantly off the list. Rightmove is the bigger of the two portals, however I’ve always much preferred the Zoopla site, in particular the level of detail you can get on a potential property, and the area.

I’ve also been taking a look at how each of the agents promote the houses on their books. So do they get the basic information right – I can show you several examples of local agents who can’t get the basic information on Rightmove correct which means the properties they’re selling get categorised in the wrong place – four bedroom properties listed as three bedroom for example. Next what are the pictures of the property like – are they good pictures or do they look like quick snaps somebody has taken on their phone? Another local agent pads their adverts out with a whole load of pictures of the local area rather than the property they’re supposed to be selling. Also what is the floor plan like – there is quite some variation amongst the agents with pretty good quality plans from some, whilst another local agent has a number of properties where the measurements don’t add up and there are rooms with doors missing altogether, for example a bedroom that has no wall at all. Then finally there is the wording on the advert, does it tell you about the property? Some agents do a traditional room by room tour, others a straightforward bullet point list, whilst another you get a little essay that doesn’t really tell you that much about the house. Are there basic factual errors in the text – I can show you several examples of local agents who get basic local details wrong.

Having gone through all of those we’ve had a couple of local agents out to value the house with a view to putting it on the market. Both valuations were around the same sort of ballpark, and both agents seem to be offering a similar service, both of them were looking to charge around the same sort of percentage commission which would work out as about £4000 to sell the house. The contracts are littered with the usual lock-ins, and clauses that result in the agents getting paid their commission if you trade your house in for a new build property as we’ve looked to doing before, plus the usual sole agent stuff.

However do you really need to spend £4000 to sell a house, or is the money partly going to pay for flashy cars painted in the estate agents colours, or a chain of high street offices that in some cases look like wine bars. Given that the primary way of looking for property these days seems to be online, do you really need to be funding a chain of high street offices anyway? I’ve been aware of eMoov, the biggest of the online estate agents for a while. They have a few houses up for sale locally, and I’ve actually had online chats with them on Twitter several times over the past few years. There was a good introduction to the company and how it was founded published last year in the Telegraph. More recently they have also done a more general overview of the online options, complete with a video with a traditional and an online estate agent discussing the relative merits of the two routes. The bottom line though is that the cheapest package eMoov offer is ten times less than the local agents were proposing to charge – is what they are offering seriously worth ten times more than going online, or is this another industry where online is shaking things up.

I did a bit more digging and there really isn’t any tangible evidence that the local agents can justify a tenfold price difference. Certainly with some of the online options you’re paying in advance, but if you’re serious about selling that doesn’t matter. If you’re not a serious seller then eMoov have a traditional pricing option too, but even that is a quarter of what the local agents were proposing. Indeed if you look at how the traditional estate agents are reacting, they’re basically name calling – in this article they refer to the online agents as parasites. They also seem to be reacting by setting up a protectionist market, as of the end of January they are launching their own property portal which has banned the online agents from posting, banned their own members from promoting on both Rightmove and Zoopla (participating agents have to pick one), and are encouraging their members to only post to the new portal first, holding back posting the new instructions to the better known portals like Rightmove and Zoopla. Essentially unable to compete with the online options they are trying to close them out of the market and giving their customers a worse service in the process.

Where does that leave us then? I have to say I was always leaning towards selling online – I bank online, buy groceries online, do pretty well everything else online, and I can find no overwhelming evidence that the local agents are doing anything to justify charging ten times as much as their online competition. The real clincher though was that the local agents are resorting to setting up a protectionist market and calling the online sellers “parasites” rather than stepping up and actually competing, so last night we set the process in motion, and had confirmation via e-mail first thing this morning. I’ll post more as we work through the process.

Thoughts from, and the lives of a Canadian and a Brit living in Southern England.