They seem to be everywhere and claim to be cheaper than traditional estate agents: But will an online seller really get you the best price for your home?

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  • Operators such as Strike, Yopa and Purplebricks claim to save merchants money.
  • They offer to sell homes with commissions that are much cheaper than traditional agents.
  • But some say there are hidden fees and they don’t always get the best price.
  • We’ll take a look at the pros and cons of selling your home on a budget.

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Faced with double-digit inflation, a cost-of-living crisis and skyrocketing mortgage bills, anyone moving home this fall will want to count pennies.

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So, is a cheap online real estate agency just a ticket or a false economy? And is a trusted traditional High Street agent the smartest way to sell in a tough market?

Operators such as Strike, Yopa and Purplebricks – the three largest online agencies – say they are saving thousands for sellers by charging budget commissions or even offering to sell a home for free, though they offer various additional “marketing incentives” that come at an additional cost.

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But proponents of old-school High Street agents say online competitors’ sales numbers are poor, they may have hidden fees and get lower prices from buyers.

Options: Anyone moving home this fall will want to count pennies, but is using a cheaper online real estate agent a false economy?

Internet firms have struggled to make an impact despite spending millions on advertising. New data released this week by consultancy TwentyCi shows that online buyers accounted for just 7.6% of home sales nationwide in the third quarter of this year — a proportion that has remained largely unchanged for years.

But will they tempt sellers when the economy is down and bills are rising? Here are the pros and cons of budget selling.

FAIR FEES

Online agencies seem to win for being cheap, but remember that this is just a basic package with no extras.

Purplebricks charges £1999 in and around London and £1119 in the rest of the UK. So if you are in, say, the Midlands and use this agency to sell a home for £300,000, the base commission will be £1,800 less than the High Street firm’s 1.0 percent commission. If this traditional agent charges 1.5%, as some do, the savings are a whopping £3,300.

“This is prompting owners of beautiful homes to consider whether they really need the outdated approach of the old High Street,” says Purplebricks chief executive Helen Marston.

ADDITIONAL CHARGES

This is where traditional agents win. Most High Street firms typically offer guided viewings and often provide property video tours as a standard service at no additional cost to the seller.

Seller regret?  Proponents of traditional real estate agents say online firms don't get as many buyers through the door and therefore sell homes cheaper.

Seller regret? Proponents of traditional real estate agents say online firms don’t get as many buyers through the door and therefore sell homes cheaper.

Internet businesses usually charge for various services. For example, Strike, which offers to sell a home without a base fee, offers additional “marketing incentives” worth between £599 and £799, as well as a “hosted view package” between £699 and £899.

Most other online agencies receive additional fees if their clients use recommended carriers, surveyors, or mortgage lenders.

And remember, traditional agents don’t charge at all if your property doesn’t sell, while many online competitors charge upfront fees that are non-refundable if a buyer isn’t found.

CONSUMER RIGHTS

Both online and traditional agents must play by the same rules.

By law, they must be members of the Property Ombudsman or the Indemnification Scheme and comply with the Real Estate Agents Act and the Consumer Anti-Fair Trade Regulations. Membership in a trade organization is optional, but the largest of these is the Propertymark, which TV real estate expert Phil Spencer describes as “driving change towards a better, more reliable industry by regulating and protecting everyone involved in real estate.”

LOCAL KNOWLEDGE

Not surprisingly, most High Street firms pride themselves on knowing how the housing market works, not just in the wider area, but in specific neighborhoods or even on the streets. Some may have years of experience in the same field.

Online agents operate more centrally – for example, the largest Purplebricks says it has a “field force” of 600 people working “in a wide variety of geographical areas” across the UK.

STRENGTH IN SALES

Some real estate analysts suggest that because online agents receive upfront payments, they have less incentive to move the sale forward if there are disruptions in the chain or delays in transferring ownership, though online firms deny this.

In the difficult housing market that many believe we are now entering, the best High Street agents will have a list of potential buyers and then pick up the phones to call, text or email to convince them to view properties for sale.

The Little Black Book: Traditional agents are more likely to have a list of interested local buyers to reach out to, meaning it may be easier for them to close a deal.

Little black book: Traditional agents are more likely to have a list of interested local buyers to call, which means it may be easier for them to close a deal.

Similarly, if a sale has been agreed but one part of the chain is slowing down, perhaps due to a mortgage issue or a poor survey result, a High Street agent will step in and try to make progress.

Online agencies, typically relying on call centers and lower levels of staff, are less likely to have the resources to chase sales and troubleshoot.

PERFORMANCE AND PRICES

The bottom line for most sellers is how many buyers they get through the door, how many offers they get, and how much they actually get for their property when they accept an offer, regardless of the type of agent involved.

The HomeOwners Alliance consumer group publishes statements by online agents about the prices they sell properties for. The three big online firms claim that their average prices are between 96 and 97 percent of the asking price.

There are no comparable numbers for High Street agents, but another consumer advisory service called The Advisory did a pre-pandemic study comparing…

Credit: www.dailymail.co.uk /

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