Online estate agents are becoming increasingly popular at the lower end of the property market, with cash-strapped sellers likely to be enticed by their low fees.
A new report by the data consultancy TwentyCi found 10% of people selling homes for less than £200,000 used an online agent in the last quarter of 2019.
But should you seek out a cut-price online deal or go for a high street agent?
Online agents are now securing 10% of instructions on properties valued below £200,000 - that's the highest level on record.
|Property value||Online agent share (Q4 2019)||Online agent share (Q4, 2018)|
|Less than £200,000||10%||9.3%|
Source: Twenty CI Property & Homemover report, Q4 2019.
Breaking the 10% barrier is a major boost for online agents, but they still face challenges in getting instructions to sell more expensive properties.
The overall online market share is 7.9% (the same as 2018), and for properties valued between £200,000 and £1 million the share has actually decreased, as shown in the table above.
Slow price growth and fewer properties selling may have resulted in cash-strapped sellers looking to try out a cheaper service to keep their costs down.
Online agents have had their greatest successes in the Midlands and North of England.
Yorkshire and the Humber led the way in the final quarter of 2019, with 12.3% of instructions going online. The West Midlands (11.4%) and East Midlands (11%) followed close behind.
These figures mask losses elsewhere, however. Online market share fell in seven of the 12 regions assessed by TwentyCi.
Online estate agents are an alternative to traditional high street estate agencies that typically operate on your local high street.
They are instead run through websites and call centres, and generally offer a lower-cost and more basic service.
Online agents come in all shapes and sizes, but they broadly fit into two categories:
Rather than charging their fee as a percentage of the property price like a high street agent, most online players charge a flat fee instead.
Some agents require this to be paid up front, while others allow it to be paid in instalments. You'll usually need to pay the fee whether the property sells or not.
Fees are often tiered depending on the level of service you choose, which can suit more hands-on sellers.
If you want one of its agents to conduct the viewings for you, however, you'll have to pay a further £300 (£399 in London).
Yes, but they're also riskier.
If you're selling a £200,000 home with a traditional estate agent, you might pay commission of around 1.4% if the property sells - that's just under £2,800.
With an online agent, you might only pay £999, but you'll usually need to pay even if the property doesn't sell, and you will receive a less comprehensive service.
Online estate agents are subject to the same regulations as high street agents.
The agent should clearly state which redress scheme it belongs to on its website.
If you end up in a dispute with the agent, you'll need to contact and provide evidence to the relevant redress provider.