High street agents versus online agents – what’s the difference and is there a better option? The answer is yes, and we’re going to be talking about that in this video.
I’m really excited to put out this video because it really is a question I often get when I get in front of sellers as to “why choose you, we’re used to high street agents we want to use a high street agent” – but why should we even consider making a different choice? And so in this blog I really want to talk about the difference in different types of agents and what might be best for you depends on what you’re looking for but let’s start with why it even matters.
According to an annual survey by the market and research opinion international, which is an organization that puts out an annual poll to British consumers, apparently only 30% of British consumers actually trust the estate agents and estate agents are featured in the five least trusted professions including journalists, advertising execs, government ministers, and politicians generally.
So, there’s definitely a problem in terms of the value consumers receive in terms of the service they’re getting from estate agents.
What are the differences in the different type of estate agents?
High Street Estate Agents
Well, let’s start with the traditional high street estate agent, which is the dominant model here in the UK. For my international readers this might be something a little bit unfamiliar, especially if you’re coming over with the US, where we’re used to having licensed agents working on both the behalf of the buyer and the seller, but here in the UK, basically the market’s dominated by high street estate agents and as a buyer you have to register with each one of them to get the data on the listings that they have, but the model really evolved from back before the internet where if you were looking to buy a home you’d have estate agents that had a local high street presence. There’d be multiple estate agents who have little office shops on the high street, they put out the pictures of their latest listings and they really controlled the information. So therefore if you were looking to move into a community you’d have to go into that high street, you’d go on a register with each one of those estate agents, have a look at what they have, and really rely on them to show you what’s coming on their books at any point in time.
The problem is though that these estate agents are really models built on the high street agency being owned by an owner but the employees are actually just that – they’re employees of that estate agency. So what happens is often there’s very little incentive for them when they’re working with sellers to really do the best job for sellers.
It means that you might have one person who goes in as a valuer, they might be the person you’ve met, you might have established some rapport with them, and then they get a bonus for getting that listing on their books, that also might mean that they might be more incentivized to overvalue a property knowing that they’re actually not the ones who actually then have to work with you over the coming months to sell it and their bonus is actually quite small.
Then there’s the negotiator who then comes in and they’re often a more junior person who then does the viewings and, again, their compensation or remuneration for achieving for you the best possible price for your home and creating that good customer service isn’t always there, so in a situation where you might be paying a percentage of the purchase price as your sales commission, that negotiator might only be getting a small percentage of that value ultimately as a bonus and again for transactions that take months to complete there’s really not much motivation.
So therefore there’s where the disconnect is because you haven’t really necessarily built rapport with that person, they don’t really know your situation, they may not even really know your home that well and might sometimes not have even ever been in there, and yet they’re the ones trying to create that experience for the buyer, and yet you kind of signed up based on the valuer you met at the beginning. So that’s one of the big differences I see in terms of the high street agency model and where there’s a disconnect in terms of the level of service they’re able to deliver.
Online Estate Agents
Now, with the evolution of the internet what we then saw was the search portals such as Rightmove, Zoopla, Prime Location, and On The Market, it really shifted the ability for buyers to reach out independently to find out the latest listings that are on the market.
Unlike in America, though, where we have the multiple listing service, which really provides robust data on not just properties that are on the market but comparisons of key features and benefits, and also properties that are sold, we’re still very reliant when the models or the portals such as Rightmove and Zoopla, which at least will show you properties that are on the market but it’s not as robust as far as data that we might get in America.
With the online access and presence of the internet we then saw an explosion of online services such as Purple Bricks or Yopa. Now this model is really driven about putting you as the seller as a “for sale by owner” situation so they create a portal or an access point which you can access the online portal such as Rightmove and Zoopla but really you’re relying on selling the home yourself, so it’s a very low cost model driven based on the premise that you as a seller have to do all the work and yes while you might save on estate agent fees you are going to pay them a flat fee for their service, regardless of whether you sell your home or not.
Speaking of the “savings” of the online estate agency, it doesn’t necessarily mean that you’re going to net more money in your pocket and I would think, ultimately, that would be your goal and why is that? Because you’re not in the industry every single day, you probably have a different profession that you’re really specialist at, and you probably wouldn’t think about trying to cure yourself if you were ill, or representing yourself in a court of law – you go hire a professional like a doctor or a lawyer but some people think that selling a home themselves and saving that money is paramount but they don’t always think are they going to be the most effective in marketing the home, positioning it well, pricing it well, proactively marketing it, putting resources to do that to make sure that you are attracting the widest audience possible of potential buyers, and then also the viewing process. While you might know your home better than anyone else, there’s also, I think, a skill set in terms of interacting with buyers, making sure that their experience is a good one, and also the ability to pre-qualify buyers and making sure that the people that are coming into your home are actually going to be in a position to make an offer and then when it comes time to negotiating that offer, you have to keep emotion out of it and make sure that you can effectively deliver the best possible price for your home that the market will bear.
So are you thinking about selling your home or have you sold your home recently? What’s your experience been if you had to grade your estate agent or whoever you used on a scale of one to five – one being the lowest and five being the best? Let me know in the comments below what your experience has been.
Bespoke Estate Agents
So I’ve mentioned the two most common options you might think you have but there is a third option that we actually think is the best option out there and certainly with coronavirus what we’re definitely seeing is that the bespoke agency model is the way forward given that so many people, when they do sell their home with traditional high street agents, have had such a bad experience with it. We definitely recognize that there’s a gap in that market to deliver great customer service but also achieve the best possible price for our clients in the least amount of time and that’s why I’m so excited and love being affiliated with Keller Williams.
Keller Williams is actually now the world’s largest global estate agency and it’s come over from America and really driving the model where you, as the real estate agent, develop a direct relationship with your sellers to service them, to work for them, and actually being your own business owner. Your goal of achieving for them the best possible price is aligned with the commission you’ll be able to earn.
My goal in working with my sellers is to work with a smaller number of clients, knowing that I can dedicate the resources, commitment, time energy, and effort to getting for them the best results. I love understanding the needs of my sellers and making sure that I’m aligned with their goal to get them the best price but also achieving their timeline for selling. It means being realistic and honest up front with them and sometimes that means telling them things that they don’t want to hear, but if you’re establishing that rapport that you truly have their best interests at heart, I think that’s really important.
Oftentimes when people are selling, it’s associated with other major life events such as perhaps divorce or death or other emotional situations so you really need to be sensitive to that and that’s why I consider it a true honour to work with someone during those critical times in their life and make sure that it’s not just about selling but getting them moved effectively.
What to look for in your estate agent
As far as the role of an agent I think there’s two primary roles that people should be assessing the person that they’re going to hire to sell their home because there’s two major critical skills that I think a good agent should be able to deliver:
One is to effectively market your home. What does that mean? That means understanding the best features, and it means understanding the neighbourhood, the area, and it also means targeting who might be that right buyer.
For example, if you’re in a suburban area perhaps it might be young families who are looking to upgrade, or it might be young professionals who have been renting and are first-time buyers, so again how do you market and position your home or your property in a way that’s going to attract those buyers? Or it could be a prime central London location which is heavily dominated by international buyers, so that might require a different strategy or more expanded strategy to reach out to the global investment buyer, or that global high net worth individual who is considering London as an investment opportunity.
That’s why spending the time and resources to position and market your home effectively is so important, and that’s what a bespoke agent is really able to do.
The second key skill that I really think an estate agent needs to be able to bring is to protect and defend your price. That means if we’re doing it right on the front end and being realistic and honest and seeing how we can position your home not just to market it but to actually effectively sell it, then my job as an estate agent is to defend that price when it comes time to negotiating on your behalf.
Now, if the market is dictating what’s happening we don’t always have control over that but it is my goal and my commitment to my sellers to get them the best possible price and that’s what any good agent should be able to negotiate strongly on your behalf.
I hope this article has given you some of the key differences as to what you need to consider when you’re looking at the different models to get your home sold and each one might be different and be a better fit for you as an individual but I really think it’s important to help you understand what are those differences and what should you really consider if you’re looking to achieve the best possible price?
Often people make the sole decision based on the commission and what agents are going to charge them but that’s really not the most important thing because obviously if we can effectively get you the most amount of money then surely the commission should reflect that service.
I hope this has helped you better understand the different options, if you have any questions or actually want to debate anything I said please make sure to leave me a comment in the section below and I’ll see you soon.