High street estate agents considering price cuts or business restructure in battle with online-only firms
A quarter of estate agents would consider changing their business model to compete with online competitors, a survey has revealed.
A poll of more than 200 estate agents across the country by Accounts and Legal reveals the ways traditional high street firms are responding to the threat of online-only brands that let sellers list a property for a flat fee rather than pay a commission.
Online agents have shaken up the property market, offering sellers a cheaper place to list their property as they tend to pay flat fees rather than a commission charged by high street agents that can be anything from 0.5 per cent to 2 per cent of the sale price.
Sellers pay a flat fee with an online agent, meaning they would make a saving compared with high street agents, but if you fail to sell you would lose that money.
Critics of online agents also claim you don’t get the same sort of service and may end up losing out on the best sale price.
Yet online agents such as Purplebricks and eMoov are still proving popular with buyers and sellers.
Our research reveals how traditional agents are coping with the threat.
A quarter of agents said they would consider moving to a hybrid model combining an online-only and high street presence.
Almost a fifth said they had reduced or restructured their fees while more than half, 57 per cent, of respondents, said they had not changed their pricing to complete with online agents.
Of the respondents, 22 were in rural areas, 116 were in towns and 98 in cities.
Overall traditional agents didn’t seem too concerned about their online rivals with 86 per cent agreeing that a high street presence is still valuable and 72 per cent not feeling the pressure from internet-based agents.
Despite this positive sentiment, just 42 per cent felt now was a good time to open a high street agency.
This is an important debate at a time where technology is used more in professional services and the intermediary is often set aside. This has been seen in financial services where crowdfunding has replaced the bank manager but there are questions over whether a seller can get the best value from selling their own property.
It could be argued that there are plenty of tools online such as property portals Zoopla or Rightmove where sellers could make judgements on the best price and then just list their property with an online agent. But traditional high street estate agents will have a book of potential buyers ready to view the property and can help with negotiations and the process from exchange to completion.
About the authorChris Conway is the Managing Director at Accounts and Legal, who specialise in providing accounting services, taxation and business advice to individuals and small businesses owners. Founded only three years ago, its philosophy has been to deliver an accounting service which offers more than just statutory compliance, by helping interpret technical accounting and taxation topics in a way that is digestible and useful.
View more posts by Chris Conway
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