by ANDY MARINO
GOING ONLINE TO VIEW, BUY AND SELL HOMES IS CHANGING HOW THE PROPERTY MARKET OPERATES
EVERYBODY knows that moving home is supposed to be as stressful as a divorce. There are several similarities – a lot of money is involved, you see more solicitors than you ever want to ever again, and there’s probably the same amount of screaming and broken crockery involved.
As house prices have rocketed in recent years, and loans have grown ever larger, the sense of standing on the edge of a cliff wearing a blindfold has only got worse. Luckily, at least you can now enjoy the process from the comfort of your armchair – more than 95 per cent of buyers start their property search online.
That usually involves browsing the major listings portals, including Rightmove, Zoopla and Prime Location. These sites aren’t estate agents (EAs), but they are used by EAs to show what’s for sale. The listings are not free, but form part of the fee billed to buyer or seller when the deal is completed.
What’s transforming the landscape of the property market is the presence of more and more so-called online EAs. They are different from the traditional high street offices, although their properties will be listed online in just the same way. They claim to offer a cheaper, near-to-comprehensive online service that eliminates the need for the guys with the slicked-back hair.
Online EAs also boast that their fees are much lower than the percentage-based charges charged by high street firms – and while that may be true, be aware of hidden charges and check all the details when comparing web offers. Delayed payment is often an option, but bear in mind that it will be more costly; and if you don’t sell your property they will still come for their money.
Currently, the online market is organised at three levels. First there are the listings where you start searching; after that come what might be called “hybrid” EAs – these include web-based services such as emoov, who use “local property experts” to guide you through a sale, or traditional EAs who run a website and do some of their business online. Last, there are the pure-bred online EAs, who might send round a photographer, but basically try to do as much as possible seamlessly via the web.
These days the number of high street versus online EA transactions is beginning to tilt – slowly – towards the web variety. According to Statista, which collects the data, in the second quarter of 2018 online sales rose to more than eight per cent of all transactions (15,986 out of 192,653), up from seven per cent the previous quarter. At that rate, traditional EAs will be in serious trouble in a few years. Although nothing goes up in a straight line, it’s generally accepted that above 20 per cent, an industry becomes seriously “disrupted”. Ask the booksellers about what happened with Amazon, or Blackberry about the iPhone.
The 2015 launch of easyGroup’s easyProperty website even featured a winding traditional funeral procession through the streets of London, with an ornate horse-drawn hearse and undertakers in black (not orange), with wreaths and a New Orleans-style jazz band – all to announce the demise of traditional EAs. It set off from outside a West End branch of Foxtons and there were very few mourners, apparently.
Purplebricks is the 500-pound gorilla of the online property world. It went public in 2015 valued at £240 million and launched in the US late last year. But though Purplebricks has a 60 per cent share of the online market and is now the UK’s fourth-largest estate agent, it is by no means safe from competition. It has now been joined by several nimble and innovative newcomers.
Moonline Property (2018) was started by Robert Woolf, a property-mad former Metropolitan Police firearms officer. It’s a beyond-the call-of-duty agency – Woolf will give you a lift home or come out at night if need be, all part of the effort of getting established as a 100 per cent trustworthy alternative to the high street. “Not only that,” says Woolf. “We are an incredibly heavily regulated part of the industry. I’m part of the Property Redress Scheme, which is the ombudsman – there is no difference between what I do and what a high street agent does.”
Settled was set up in 2015 by Gemma and Paul Young, a brother and sister duo, who had worked for Google, Facebook and Twitter and believed they could make property-selling software a lot better, and have done so.
Unlike certain big online outfits, these firms won’t impose “fines” if you don’t use the solicitors they recommend, and Woolf stresses that he displays his total charges on the website, including VAT, and there are no hidden extras.
Always check the FAQs – if it’s a good site you will find all the answers.
These new companies joined pioneers such as House Simple, founded in 2007 and named by Trustpilot as online estate agent of the year in 2018; Tepilo, started in 2009 by TV’s property queen Sarah Beeny; and Yopa, which was born in 2015 – and received an investment from Savills a year later as the traditional property giant sought to compete with Purplebricks.
So there are many online EAs out there, but why use them?
At the moment, they typically sell themselves as the cheaper but not shabby alternative to the high street, but as competition intensifies the profits will inevitably be shaved and online EAs will have to work flat out just to keep the lights on. Purplebricks was launched in 2012 but made its first-ever profit of £300,000 only in late 2016 – you can’t even buy a studio flat in London for that.
In future, perhaps, the pared-back services that keep the fees low might have to be sacrificed to provide more concierge-style treatment for online buyers and sellers. When that happens, the ease of selling and buying online could become a real threat to bricks-and-mortar sellers of bricks and mortar, with the efficiency of the software providing most of the profit margin.
But there is another killer feature online EAs can make use of. Chris Voss, one of the FBI’s top hostage negotiators, compares the experience of selling your house to having a family member kidnapped by terrorists – suddenly the future is uncertain and frightening. Worst of all, you don’t know how long the nightmare will last, and it’s the sense of not knowing which is the main cause of stress.
Perhaps the best thing about online estate agents relates to what Voss recommends hostage negotiators (and EAs) should always do with the worried relatives (or sellers): call them every couple of days. Don’t ask ‘how are you?’ Just say, ‘I’m just calling to let you know that nothing’s happened yet.’ This is where “always-on” online can win because nothing happening is not the real problem, it’s having no way of finding out nothing is happening that hurts.
Being able to ascertain the situation whenever you want to is so reassuring that worry and stress evaporate. Trust the FBI on this. Having a dashboard on the website of an online EA that you can log into whenever you want, or a switchboard available 24/7, as with Moonline Property, can totally transform the experience of selling or buying a house.
“Nothing to report” is music to the ears, compared with the familiar silence from indifferent brick and mortar EAs who don’t work a night shift.
With a model like the one used by Settled, the seller can replace the EA completely, arranging and managing viewings personally via a comprehensive, easy-to-use control panel where the seller can also receive offers and performance statistics, and even manage feedback. Moonline is now offering the same option, with the possibility of bringing in one of their negotiators to help: “You receive updates, requests and feedback alerts on your phone and in your inbox telling you to log in to view. You even have a choice on accepting, counter offering any bids on your property, or asking your Moonline Agent to negotiate incoming offers on your behalf.”
That sort of hands-on responsibility might not be everyone’s cup of tea, but as people become more relaxed about online purchases, saving money and not having to rely on a fast-talking fellow in a shiny suit calling you might be increasingly attractive.
If you can deal with eBay’s interface, all this should not present a problem. If not, best get used to it quickly – the future is online.
