Selling a House using Online Estate Agents
Estate agents online are growing in popularity at a ferocious rate in the UK. They give homeowners a fast, convenient and relatively cheap way to sell their property on the open market. If you’re currently considering how to sell your home, these tips on selling a house online should help you to make the best decision for your circumstances. The best way to approach the process is probably to compare the traditional and online processes side by side. But first, it’s important to understand exactly how the house selling process works online.
House selling online explained
Online estate agents have the same goal as High Street agents — they aim to sell a residential property as profitably and as quickly as possible on the open market. But despite selling online is cheaper and easier than ever before, only around five per cent of the homes sold in the UK are sold via online agencies. Why is this? Well, some people prefer the personal touch, which means regular contact with their own, designated agent. It’s also true that most people still turn to traditional methods of selling houses because they don’t have the time to manage property viewings, communicate with buyers and liaise with estate agents and solicitors.
Online agents perform many of the same functions performed by traditional agents. However, they tend to concentrate more on the marketing side of the process. But to compete in a highly competitive market, an increasing number of online estate agencies are offering extra services, such as price negotiations, conveyancing and the management of the property viewing process. Generally speaking most online agents leave the bulk of the work to the homeowner once a property listed. The agents will pass on the details of interested parties to the owner as and when they come in.
What are the key differences between estate agents online-only & traditional high st estate agents?
While the ultimate goal of selling a house on the open market applies to both types of agent, there are some key differences that you need to be aware of if you’re going to make the best possible selling decisions.
In the majority of cases, online agents will charge considerably less for their services that High Street agents will. However, it’s important to remember that, in the primary, online estate agents focus mainly on the marketing side of things. And apart from an initial visit to value a home, they don’t provide a personal, face-to-face service.
If you’re waiting for proceeds of a house sale to pay an estate agent, it’s probably best to opt for the traditional property selling route because most online agencies will insist on a flat fee paid upfront. High Street agents will usually charge a fee based on the final selling price, which is payable on completion. The downside to this arrangement is that you can’t be sure how much the agent’s fees will be until a sale price agreed.
The house viewing process
Although estate agencies operating solely online tend to charge much lower fees, they also tend to offer far fewer services. If you opt for this route, you’re likely to be left to manage the property viewing process yourself, impossible if you work long hours or have other commitments.
Selling with a traditional agent will take the burden of property viewings off your shoulders. Your agent will schedule viewings based on your circumstances, and keep you abreast of developments throughout the process. Of course, certain Internet-based companies offer these services. However, they’re often part of a premium package or an optional extra.
Online companies will arrange an initial visit to your home to value it. They are unlikely to know your specific market very well, so they will base their valuation on a nearby Rightmove property value or asking prices on the Zoopla website. While this method is valid, it won’t take into account seasonal and geographic nuances in the local market. Traditional ageFrightmovents will rely on a combination of official house price data and their knowledge of the local area to reach an informed valuation. But remember, whichever way you go, the final decision on the initial asking price you set lies with you.
In most cases, an online agent’s face-to-face involvement in the house selling process ends after the initial home visit. After this point, the agency is likely to restrict further communications to emails and telephone calls. If you want the comfort of knowing that someone you know is always available to answer your questions, it might be best to enlist the services of a High Street agent.
Marketing a house for sale
In most cases, High Street agents will market your home until it sells, and then charge you a percentage of the sale price as their fee. Most online agencies will also continue marketing your property until it sells or you tell them to stop. However, they are likely to charge upfront, flat fee for the service. Also, some online agencies work by fixed-term contracts of six or 12 months. Their fee only covers the marketing of your home during this period which is why it’s essential that you check the terms of the agreement before committing.
Liaising with house buyers
The average house sale involves a lot of back and forth between the buyer and the seller. However, traditional agents will take care of the everyday dealings with prospective and confirmed buyers on your behalf. They will keep you updated when the critical decisions need making. Online agencies, on the other hand, tend to list your home for sale and leave the hard work to you. They pass on requests and communications from buyers as and when they arise. Of course, some online companies that offer more in-depth services, but you will probably have to pay a premium for them.
Save money with online estate agencies
The chances are your decision on whether to use a traditional or online estate agent will rest on the costs involved — and what they deliver in return. You are likely to pay a commission of between one and three per cent of the final selling price if you choose to use a traditional agent. But hire the services of a competitive online estate agency, and you’ll pay a flat fee at the very start of the process. In most cases, this flat fee will be significantly lower than selling with a High Street firm.
The best way to demonstrate the cost implications of both types of an agent is with an example:
High Street agent:
Sale price: £110,000
The rate of commission: 1.9%
Final commission payable: £2,090
Sale price: £400,000
The percentage of commission: 1.7%
Final commission payable:£6,800
Compare these costs to the average cost of hiring an online agent, which is somewhere between £300 and £1,500. Although the savings are relatively modest with the cheaper house, they are huge for the more expensive property. In very general terms, the more valuable your home is, the more you stand to save by selling your property online.
Of course, the headline figure for each type of estate agent doesn’t tell the whole story. Estate agents online only will usually require payment upfront — before your home is listed. Also, this fee is not reliant on a sale achieved. If your home hasn’t sold during the initial listing period, you may have to pay another fee to keep your listing online.
But don’t discount online agencies just yet. The competition between companies is growing more fierce by the day. Some online firms will now defer payment until the property sold. And there is an increasing number of pay-as-you-go deals available from online agencies, so it’s worth spending some time shopping around to see what’s on offer.
What are the advantages of selling houses online?
There are several advantages to selling houses online, but not all of them will relate to your circumstances. While this method is often cheaper, it usually comes with far fewer services, and a lot less involved in the process once the initial marketing completed. When assessing the various advantages involved in selling online, it’s important to relate them to your present situation. How quickly you need to sell and how much cash you have right now will ultimately dictate the route you take. Nevertheless, the advantages to selling online are clear.
Selling through an online agency is usually cheaper
The most significant advantage involved in selling your home online relates to cost. A modest, upfront fee of between £300 and £1,500 is needed to list your home online. Compare this to the thousands of Pounds High Street agencies charge with their price-based commission structures, and it’s easy to see why the use of online companies is on the rise.
Selling online usually offers increased flexibility and convenience
Selling your property via an online agency will usually allow you to create a package that suits both your pocket and your circumstances. You can sometimes choose optional extras such as the management of property viewings, conveyancing issues and increased communication with buyers. And because these services delivered primarily online, you can track developments at any time you wish. Most online companies don’t insert exclusivity clauses in their contracts, which means you’re free to list your home for sale with several different agents if time is of the essence.
What are the disadvantages of selling a house online?
There are many more factors to consider than cost when deciding exactly how you will sell your home, however. Whether or not selling online is right for you depends heavily on how much time you have on your hands, as well as how much cash you have available at the start of the process. Among the possible drawbacks to consider are:
Estate agents online only will usually ask for payment upfront before they list your home for sale. And it doesn’t matter whether the agent sells your home or not, this fee is for the listing, and not for sale. If you don’t have the cash, most online companies won’t entertain you.
A potential lack of incentive for the agency to secure the best price
Without the incentive of earning more commission the higher the sale price is, less reputable online agencies may not do all that they can to secure you the best possible price for your home. There are, however, a few online estate agents that do offer commission-based fees, but they’re few and far between.
Little or no local knowledge
Most online agencies are located in a central headquarters, their agents probably won’t know your local property market very well. A lack of knowledge can sometimes lead to poor decision making and, ultimately, an unsatisfactory selling price that doesn’t reflect the property’s real potential. Most local markets have their unique nuances and characteristics — most of which the average online company will be unaware.
Is selling my house online the best option?
This entirely depends on your personal circumstances. If you’re a busy person, with little or no help available from friends and family, it’s probably best to seek the services of a traditional agent with whom you can meet and talk to when the need arises. A High Street agent will also do the bulk of the work involved in selling a property. However, if you have time on your hands, and you’re keen to minimise the cost of property selling, the online route is probably the best one for you.
A growing number of bricks-and-mortar estate agents are combining their efforts of large online portals, which most online agents don’t have access. So opting to sell with Internet-based companies will probably mean missing out on these vast resources. However, as most online firms list on Rightmove and Zoopla, your home will still have a massive audience.
In simple terms, choose an online agent if you want to save money, you have the cash to pay the fees upfront, and you have enough time to devote to the complexities of selling a house in the UK. But if you’re short of time, you just don’t want the hassle of managing the selling process, or you’d prefer a one-to-one relationship with a local agent, it’s probably best to turn to a High Street agency.
What are my rights when selling a house online?
Online agents are subject to the same rules, regulations and laws that apply to traditional ones. Before you sign an agreement with your chosen online agency, check that they are signed up to either the Property Redress Scheme or the Property Ombudsman. These schemes are there to protect your interests, so make sure you have their contact details before you agree.
FAQs about online home selling
How do I know I can trust an online estate agency?
As long as your chosen agent is signed up to one of the three schemes listed above, your legal interests are protected. But the best way to ensure you can trust an agency is doing a little research on them? What have their previous customers said about them? What is their reputation within the industry?
Will I be in charge of property viewings?
Most likely, yes, you will be in charge of managing the property viewing process if you use an online agency. However, there is a growing number of companies that are providing these services of a premium.
How will buyers find my property?
As well as using their websites, online agencies will use the likes of Rightmove and Zoopla to advertise your home — giving you a potential audience in the tens of thousands. A few online firms will also use local media and physical ‘For Sale’ signs too.
Do online agents still value homes?
Yes, your chosen online company will probably send an agent to your home to perform a detailed valuation. They will use the essential characteristics of your home and published house price data during the process. However, they probably won’t be able to call upon detailed knowledge of the local area.
What about price negotiations?
Most online agencies will relay information to you, and not get involved in price negotiations with prospective buyers. This job will be left to you unless you have an agreement in place that covers this service (which usually entails an additional charge).
So, should I sell my house online?
The Internet is now such a huge part of daily life — everyone has either direct or indirect access, a huge potential online audience for your home listing. While there’s absolutely nothing to fear from selling online, you should ask yourself a few questions before you go ahead.
- Am I happy to perform the bulk of the work involved in selling a house myself?
- Do I fully understand how property sales work?
- Do I have sufficient local knowledge to achieve the best price possible?
- Do I have enough spare time to devote to the process?
- Is the minimisation of costs a priority?
- Do I have enough money available to cover an upfront fee?
If you have answered ‘yes’ to all of these questions, it’s a no brainer! Selling your house online is the best way to go.