It is estimated that one in ten properties have sold in the UK without involving an estate agent, as home buyers and sellers decide to go it alone.
Prior to the advent of the internet, when an estate agent was appointed to sell a property, an alert is put out to registered buyers (those who have previously expressed an interest in buying through that agent). Until recently, a nice picture would put in the agents’ window and an advert placed in the local newspaper or perhaps, in the case of top of the market properties, in the London circulars and glossy magazines. In exchange for a percentage fee of the purchase price, of course.
A new market popular with those selling top of the market homes or where a seller wants to move discreetly has also given rise to the buying agent. Again, for a percentage fee of the purchase price. The buying agent will seek a property on your behalf and deal directly with estate agents, property portals and, in some cases, even approach a home owner direct to find your ideal home. In some cases, nobody would know a transaction had taken place until Land Registry became involved.
The online property portal market has changed the way in which traditional estate agents market properties for sale and, in some cases, removed the estate agent from the transaction completely.
However, there is a downside to using the internet to market your home. Rightmove, for instance, is among other websites where a property’s sales history and details can remain in the public domain. While price information can be readily gleaned from a search of the Land Registry, a digital footprint can leave the asking price history available in perpetuity and can put future buyers off, particularly where an asking price is shown to be reduced or a property shown to be withdrawn from the market. Photographs of your home’s interior can also remain available on the internet to anyone who cares to look, whether it be future buyers, nosey neighbours or house voyeurs.
In the current sellers’ market climate of few homes for sale and swift sale agreements, as many as 23% of London properties are now sold “off-market”, according to Hamptons. Buying agents can, in some cases, provide access to properties that are not yet publicly on the market.
The vendor retaining more control of the transaction can result in a higher selling price, although it doesn’t test the market so could actually result in a property not achieving its potential in terms of sales price.
It was thought that Purplebricks, on starting its online estate agency some eight years ago, would close the doors of traditional high street estate agents. However, a hybrid market has since emerged and three online property agents now dominate around 70% of the non-traditional market: Purplebricks, Yopa and Strike.
One of the reasons for this is cost. Strike, for instance, does not charge for listing a property but instead earns its crust from referral fees, photos and other additional services. The difference can be several thousands of pounds to the seller.
So does all this mean the end of the traditional estate agent? Not at all, it seems. An agent may charge you 2% or more to sell your home, but they will have knowledge of the area in which they work and can help to whittle down time wasters and accompany viewings. And when the housing market does eventually cool down, employing someone to market your home in the right places will be invaluable – particularly now that so many of them have learned how to take an Instagram-style photo.
You might be tempted to save money and DIY your house purchase, but if you are looking to buy a new property – ask an independent Chartered Surveyor for a building survey.