Why are online agents cheap? The hidden truths behind the low prices

As a high street agent, we hear it all the time:

Potential Customer: "I'm thinking of selling my house, can you tell me what your fees are?" Agent answers with a figure, in our case usually somewhere between £1,500 and £2,000. Potential Customer gasps: "How much?? Well, I'm being quoted £300 by <name of online company>, so why would I go with you?" Caller hangs up, outraged. Most of the time we don't even get a chance to explain, calmly, that yes you may have been quoted a comparatively low price for selling your house by an online agent, but are you comparing like for like? What service would you be getting? Or, to tell them that many of our customers have come to us after having tried and failed to sell their house with an online agent. It amazes us that time and again vendors fall for the headline low price, rather than digging a bit deeper to see what they're actually getting. After all, £300 is still £300.

How many people using online agents ask them the following questions first:

  • Do I still pay even if you don't sell my house? Most online agents get paid upfront rather than on results like Trinity
  • What is your percentage of completions? High Street local agents fare a lot better here. Because online agents a re generally paid upfront for their service there is a lot less incentive for that sale to be pro-actively pushed through to completion. The industry average for sales collapsing is 1 in 3. At trinity this is closer to 1 in 8. This is due to our pro active agents pushing the sale through and proper verification of buyers ability to buy at the offer stage. These are things you don't tend to get from a low cost online agent.
  • What is your average selling price compared to your average asking price?
  • How well do you know the local area? (How can an online agent "sell" your area to a buyer if they've never been there?)

And I haven't even covered accompanied viewings, help negotiating any offers, or liaising with buyers, mortgage brokers and conveyancers on your behalf. As agents we can be involved in your house sale for several months, and we may not even get paid at the end of it if the sale collapses.

McDonalds and Le Manoir both serve beef dishes, the former for a few £, the latter for probably 25 times as much. Customers know they are not getting the same service in both establishments. They take into account the quality of the ingredients, table service, preparation time, surroundings, etc. It's interesting that we are so much more willing to accept the difference when it comes to what we eat than when we sell our houses. Food for thought. See http://www.propertyindustryeye.com/14694/ for some interesting statistics on online vs high street agents.

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Published on 27 April 2016

Source Trinity Sales Wakefield

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