Selling a house
Online estate agents
By Marie Kemplay
Article 6 of 12
Online estate agents
Online estate agents pitch themselves as a cheaper alternative to their high street counterparts, but are they a viable option? We explore the pros and cons of going online.
Online estate agents, such as Emoov, HouseSimple, Purplebricks and Tepilo, can charge much lower fees for selling your house than high street agents. We explain how online estate agents work, the pros and cons of using them, and compare the major companies.
Online estate agents: how do they work?
The services offered by online estate agents are, for the most part, quite similar to those offered by high street agents. At the moment, online estate agents only account for about 5% of property sales, but this is likely to increase.
An online estate agent will value and market your home for you, and arrange property viewings. Most will also accept and negotiate offers on your behalf, and liaise with your conveyancer, other estate agents and buyers until the sale is complete.
But there are a few significant differences.
- Fees: online agency fees tend to be lower than those charged by high street agents (see below), but you often have to pay them up front, whether or not the company manages to sell your property. Fees charged by online estate agents are usually a set rate rather than being a percentage of the selling price, which can mean the agency has less incentive to negotiate the best-possible price for your home.
- Viewings: most high street estate agents will conduct viewings for you but, with an online agent, the default option is that you do them yourself.
- Communication: although someone will visit to take photographs and create floor plans, all other contact will usually be via email or phone. Some online estate agents will assign you a personal account manager, but it is unlikely that you'll meet them in person.
- Valuations: most online estate agents will visit your home to value it, just like a high street agent, but you won't necessarily get an agent with specific knowledge of the local market (although an increasing number of online agents do employ 'local experts' to do this). Bear in mind that you don't have to use the valuation provided by your online agent: you could always ask a local high street agent for a valuation and use that figure to inform the asking price you set with an online agent.
- Marketing: high street estate agents market your home until it sells or your contract comes to an end. In practice, the same is true of online estate agents, but always check the package you've chosen. Most offer 12 months as standard, although some only offer six months (scroll down for more details on what the biggest companies offer).
- Vetting buyers: good high street agents will know whether potential buyers are quality applicants. All of the online estate agents we've spoken to say they take details of names, finances and whether potential buyers are already part of a chain. We'd recommend asking your agent exactly how this works – for example, Purplebricks uses a third party to ensure buyers are able to proceed with the purchase after the offer has been accepted.
Find out more: if you need a mortgage for your new property, call Which? Mortgage Advisers on 0808 252 7987 for impartial advice on the best deal for your personal circumstances
Online estate agent fees
Unlike high street estate agents, who usually charge commission, online estate agents generally charge fixed fees. This means they are often a lot cheaper.
For example, if you sold a property worth £200,000 using a high street estate agency that charged 1.3% commission, you'd pay £2,600. Online estate agents typically charge a flat fee of between £300 and £1,500, regardless of the value of your property.
The downside of online estate agents' lower prices is that you'll often have to pay up front, regardless of whether they end up selling your home or not. However, some companies will let you pay some or all of your fee on completion, reducing the risk of wasting your money. A few companies also offer pay-as-you-go packages.
The table below provides an indication of what some of the most well-known online estate agents offer in their packages, plus how much they cost, but you should visit their websites for exact details.
|Online estate agents compared: what the big brands offer|
|Online estate agent||Fees*||Included in all packages||Extras**|
|Easyproperty||£475 ('Easy One' package, pay upfront), £825 ('Easy Two' package, pay later), £1,500 ('Easy Three' package, pay later)||
|Emoov||£679 (pay now, or pay later)||
|Hatched||£695 ('standard' package, pay now), £895 ('enhanced' package, pay now), £1,695 ('traditional' paid only on completion)||
|House Simple||£595 (pay upfront) £695 (pay on completion or after 6 months), £995 (paid only on completion)||
|House Network||£699 (pay now, on completion or after 12 months)||
|Purplebricks||£798 or £1,158 in central London (pay after 10 months or on completion)||
|Tepilo||£495 (pay now), £795 (pay later)||
|Yopa||£780 or £1,140 in some London postcodes (pay now or pay later with 0% finance*** option)||
*Fees will vary depending on package chosen and whether fees are paid up front, on a monthly subscription, at a deferred later date or on completion.
**Extras are paid for as part of a package or for a standalone fee.
***Applying for this will leave a 'soft' footprint on your credit file. This shouldn't affect your credit rating.
Data correct as of 8th September 2016. Prices include VAT unless stated otherwise. 'Premium listings' on property portals are larger and include more pictures. 'Sales progression' will cover the agency liaising between relevant parties once an offer has been accepted and providing you with updates. 'Offer negotiation' covers the agency handling offers made by buyers.
Online estate agents pros and cons
Online estate agents can be a great money-saving option when you're selling your house, but you should be aware of the pros and cons of using one versus a high street agent before making a decision.
Pros of using an online estate agent
- Fees: in most cases using an online estate agent will be a lot cheaper than using a high street agent. The more expensive your home is, the more you stand to save if they charge a flat fee.
- Convenience: it can sometimes be easier to get hold of online estate agents. Their call centres are open during evenings and weekends, so they are able to deal with queries outside of working hours.
- Flexibility: packages can be tailored to your specific requirements, and you can often track viewings and feedback online (although some high street agents offer this, too).
- Freedom to use multiple agents: generally, there is no contract period, which means you can instruct other estate agents if you wish.
Cons of using an online estate agent
- Lack of local knowledge: even online agents with regional reps could struggle to compete with a high street agent who will know your neighbourhood and its property market inside out.
- Legwork: some online estate agents will negotiate offers for you and act as a middleman to progress your sale to completion, but not all will. Taking charge of communications with buyers and solicitors without the help of an agent could be time-consuming and stressful.
- Viewings: you'll usually have to conduct viewings yourself, so you'll need to be comfortable showing strangers around your home and make yourself available during evenings and weekends.
- Paying up front: if you opt for this type of package you won't be paying on results. In fact, you'll have to pay even if that company doesn't end up selling your house.
- Selling price: because most online estate agents charge a flat fee rather than commission, they have less incentive to get the best-possible price for you. That said, they have reputations to maintain, and many companies claim to typically achieve 99% of the asking price.
Find out more: to find out more about traditional estate agents, see our guide to high street estate agents
Beware overvaluation of your property
As with any estate agent, it’s the job of an online agent to find the best price for your house. However, our research, published in February 2017, has found that estate agents who routinely overvalue properties can potentially leave sellers worse off as they have to make big price cuts to sell their home.
We examined which agents were heavily reducing (by more than 5%) property prices in order to sell. We think this indicates that they are listing homes with an inflated initial asking price.
In our investigation, we found this was less of a problem with online agents that with traditional high street estate agents.
Properties sold through online agents sold, on average, 38 days faster than traditional agents. Furthermore, where 19% of properties sold by traditional agents were reduced by 5% or more, that figure was 13% for online-only agents.
Purplebricks – by far the largest online-only estate agent – heavily reduced the smallest proportion of its properties, while easyProperty heavily reduced 34% of their properties. EasyProperty claims that it sells hundreds of new-build properties, the prices of which are set by the developer, rather than themselves Of the properties that were actually sold on behalf of private individuals, they claim to have reduced far fewer than listed here.
The graph below shows how online estate agents performed in our investigation.
Should I use an online estate agent?
There isn’t a straightforward 'yes' or 'no' answer to whether you should use an online estate agent. If you think you know the local property market well and would be comfortable showing buyers around your property, then using an online estate agent could present good value.
However, if you’re stretched for time or would prefer more tailored support and advice, you may be better off using a high street agent.
Something else to be aware of is that online estate agents will not be able to list your home on new property portal OnTheMarket.com, which launched in early 2015. The portal is being run by a consortium of high street estate agencies, and it will not allow online estate agents to sign up to it. However, at the moment this is unlikely to cause you problems because, in terms of audience size, Rightmove and Zoopla are by far the most popular property listings sites.
High street estate agents that choose to advertise their properties on OnTheMarket.com are also only allowed to list properties on one other online portal (this is a contractual condition). This means that, for the time being at least, using an online estate agent may expose your property to more potential viewers than a high street agent that has signed up to OnTheMarket.com, as it can be listed on both Rightmove and Zoopla.
Find out more: read our guide to setting the right asking price for your property
Online estate agents: your rights
Online estate agents are governed by the same regulations that cover high street estate agents.
As with high street agents, online estate agents must be members of one of three government-approved redress schemes: the Property Ombudsman, Ombudsman Services: Property, or Property Redress Scheme.
Your agent has to be clear about which of these schemes they are a member of, and the scheme should be your first port of call if you have a problem.
Trading Standards will also investigate agents that it believes have acted in breach of the 1979 Estate Agent Act, which sets out minimum standards of conduct for estate agents.
- Last updated: September 2016
- Updated by: Marie Kemplay