As we all know the online estate agency industry is growing by the day with Purplebricks still been the market leader. However, this does not make them the best.
The main reason why the online agents appeared and still do more attractive than the high street agents are the savings the vendor can make when it comes to commission. However, although the savings are great I strongly feel the vendors are not using these savings to their maximum advantage.
Why do I say this? Basically, it’s simple too many vendors are concentrating on the offers they are receiving before commission is taken into consideration (Gross amount) rather than thinking of the amount after the commission has been paid (Net amount). I strongly believe this mindset is holding back 1000’s of people from agreeing to sell their property, its madness.
Why do I think this? Its simple. Let’s take a £250,000 property for example. There are two options, the high street estate agent are offering to sell for 1.5% commission and the online estate agent have a package at £800 no sale no fee. Let’s say someone offers £240,000 for the property. With the high street agent, the commission charged would be £4,320 (including VAT) making the NET amount £235,680 whereas the local agent would be £800 making the NET amount £239,200. In our example the vendor declines. However, the question is if they have appointed the online estate agent would the vendor accept £242,000 if they had gone with the local agent? This is where the madness comes into it as you would be amazed by the amount that would.
Why is this mad? It’s obvious accepting £242,000 would leave the vendor with a NET amount of £237,644 which is less than the offer of £240,000 with the online estate agent.
This is why the online agents with the attractive commission rates offer the vendor a higher chance of selling. It gives the vendor more chance of getting an offer which gives them the money in their pocket they require after agents commission has been paid.
Although this article is to push the vendor to use the cheapest estate agent but one thing to remember is the service standards the agent offers is equally if not more important. It’s ok going with an agent who only charges £100. If this is the case you are going to have to take your own photos which is fine, host your own viewings which is fine, but you still need an agent who is
- Going to answer the phone when people call to enquire or book viewings
- Negotiate hard for you
- Progress your sale tenaciously with the solicitors to get the sale through as quick and seamless as possible
The art is to find an estate agent who is not greedy and have the mindset that building a business takes time and they are not in a rush for success. Once you come across an online estate agent with this ethos you will have found an agent that is well priced and at the same time offers excellent levels of service.