Online agents slowing down and even preventing sales, new report suggests
Traditional estate agents are having to step in to support sellers who have chosen online agents to ensure that chains do not collapse and that sales complete, a new report from a legal firm claims.
Summarised in the industry newsletter Property Wire, the result is rising costs for traditional agents and the home buying process becoming more time consuming and protracted, more expensive and more stressful for individuals, according to the report from Rix & Kay.
The findings of the research came from six months of detailed face to face interviews with traditional estate agents across the South East of England and while it is critical of the cheaper options, it also says that traditional agents have to be innovative and embrace new technology to remain viable.
It says that the most critical part of the sales process is the support that an agent provides once an offer has been accepted and this is the most skilled part and without it a sale is more likely to collapse.
Indeed, some 98% of those who took part in the research said that the home buying process is more likely to collapse in the absence of experienced professionals.
The report suggests that the business model adopted by alternative online estate agents where an upfront fee is charged and they are not relying on a sale completing means they do not have the same motivation or incentive to support clients during the sales progression phase.
The research also found that the public do not understand the value and importance of having a skilled team and the differences between services offered by traditional agents and alternative online providers. The upshot is that rising costs mean traditional agents need to consider alternative business models if they are to remain profitable and sustainable.
In particular, it suggests that traditional agents need to embrace new technology to improve their services and adapt to the changing needs of clients driven by the advance of mobile technology and innovation online.
“We do think the term ‘online agents’ is misleading” commented Beresfords Director Terry Holmes. “ ‘Online only’ is more accurate because all estate agents are online. Agents such as ourselves have a massive web presence with properties on our website being viewed in over 80% of the countries in the world.
“It’s just that we do don’t limit ourselves to online, we do far more and this report reflects that. We have made huge investments in technology to ensure that we cover every marketing stream possible.
“That maximum coverage gets our properties in front of as many people as possible and delivers more sales.
“The fundamental difference is that we only get paid if we sell a property and it goes through.
“A lot of the online only agents on the other hand are paid even if the property is taken off the market because ‘no commission’ doesn’t mean no fees.”
Report author Scott Garner, head of business development at Rix & Kay said “The traditional agents I spoke to have been central to their communities for a long time and their primary concern is helping local people to move. The challenge for them is to be seen as a key advisor to the home buying and selling process and not an unnecessary expense,’ said
“That challenge is now even harder as new entrants continue to devalue the profession and increase pressure on margins” he added.