It’s really important for homeowners to have this information when they are deciding whether it is best for them to use an online estate agent or a traditional high street estate agent. So, as a data driven business we decided it was our duty to conduct the research ourselves to help our homeowners.
We looked at 500 new listings by Purplebricks and all listings by Tepilo, Housesimple and Emoov from January 2016. We analysed the success of each of these listings from January 2016 through to February 2017, allowing 14 months. We also sent out a questionnaire to customers who have used online estate agents to help us understand their motives and their level of satisfaction. We then conducted telephone interviews with some of the respondents, which provided us with some in depth analysis.
We have outlined the main findings from the research below.
Marketing Pays Off
With £45 million spent on TV and Radio by online estate agents in the last two years, it might come as a surprise to learn that only 30% of people interviewed heard about their online estate agent from watching TV. Most people came across the online agent from conducting an online search (43%) and 15% heard about their online agent through a friend.
Our data shows that market share of online agents has grown from 1.1% to 3.7% from January 2015 to January 2017, which is a big jump and we can’t help but assume marketing played a big role.
Homeowners Looking To Save Money
As suspected, over 80% of those interviewed chose an online estate agent to save money. Others liked the idea of having total control of the viewings themselves. A few respondents felt pushed towards an online agent due to the distrust they felt towards traditional high street agents.
Half Of Online Agent Listings Remain Unsold!
Our research found that around half of online agent listings hadn’t sold after the 14-month period. Purplebricks completed on just 57% of the listings from January 2016, as of February 2017. Housesimple completed on 58%, while Emoov and Tepilo were even lower with 51% and 48% completion rates.
The Cheaper Upfront Fee Could Cost Homeowners More
Online estate agents charge an upfront fee, which is payable even if the property does not sell. Traditional high street estate agents charge a commission on a ‘no sale, no fee’ basis.
When looking at the completion rates above and then the upfront fee paid to the online agents, some customers are being left with empty pockets. We have used Tepilo as an example:
Tepilo completed on just 48% of listings. That means over half of Tepilo customers paid more than they would have if they had used a traditional high street agent on a ‘no sale, no fee’ basis. What’s more concerning, is that 17% of homeowners went on to instruct a high street agent meaning they paid Tepilo and then paid a high street agent.
One customer interviewed felt that once the upfront fee was paid the online agent lost interest and lacked motivation to sell their home. Almost half of those interviewed felt the online estate agency they chose was poor value for money and 40% of respondents spent more time than expected managing the sales process.
Online Customers Switch Back To High Street Agents
We found that many online estate agency customers went on to appoint a traditional high street estate agent to continue the selling process. Interestingly, 44% of homeowners who switched from Purplebricks to a high street estate agent did so in the first 2 months.
Time Until Listing With Another Agent
The research also showed that there were asking price changes in 65% of re-listed properties.
Change in Asking Price When Relisted
It’s understandable that homeowners are attracted to online estate agents – who doesn’t like the idea of saving money! However, our research clearly shows that you won’t necessarily be saving money by appointing an online agent and it could be a dangerous assumption to make. We recommend our homeowners do their research and speak to a number of estate agents before making a decision (online and traditional). If you choose an online agent, you need to make sure you are prepared to take on the process yourself and remember that they are driven by the upfront fee.
The questionnaire was conducted by GetAgent in March 2017, a total of 45 respondents participated.
This Guest Blog is courtesy of Colby Short, CEO of GetAgent, analysts of Estate & Letting Agents. “One of the major issues with property is lack of transparency. Most Estate Agents look and sound the same. Homeowners don’t know which one will do a good job. So we set out to create a transparent way to help owners find the best agent for them.”