The arrival of online agents a few years ago was accompanied with much fanfare and hailed as a revolution on how people will sell and buy properties. Now a few years has passed many are questioning if all the hype and speculation surrounding these online businesses really was justified. What has followed the fanfare is several damning reports on TV programmes such as Watchdog and in publications such as Which? about the poor levels of service provided by these agents. In addition to this, several investigations by the Advertisement Standards Authority of multiple false or exaggerated advertisement claims by online agents has seen many ads removed. To make matters worse news is now filtering through about money troubles, actual collapse or risk of collapse of many of these online agents.
The customer could lose out
The biggest concern for many in the industry is that many customers could financially lose out if these businesses overstretch their resources or fail. It has already been well documented that customers who choose to pay an upfront fee (a model many online agents prefer) could be paying an agent yet never actually achieve a sale. Read more about this in our recent blog here: http://galleyproperties.co.uk/experts-warn-sellers-avoid-paying-full-fees-upfront/
What’s happening with some online agents?
It has been reported in the news about serious problems at the online agent Emoov. Sky News reported on rumours that Emoov were in the process of selling the company due to the agency facing “a cash squeeze”, although this has been denied by Emoov many in the industry think this is close to happening. To make matters worse two of its key directors have recently resigned. Both directors joined the firm earlier this year just before the news that Emoov would acquire rival company Tepilo and the company was also due an additional £15 Million of funding from new and prominent shareholders. In the space of a few month things appear to have taken a turn for the worse and both the experienced directors have now jumped ship. Emoov’s Founder and CEO Russell Quirk also revealed that his business were talking with parties who were interested in either acquiring the company or making an investment. He stated that a lot of funding is required to set up a new brand along with public awareness to allow the business to get off the ground. Quirk also claimed that unless he could find financial backing from another source or is unable to find the right buyer then a “hard stop” for Emoov could soon be likely. The next few month could be difficult for the online agent. Customers using them, who may have paid large fees up front, will rightfully be worried.
How about the larger online agents?
Purple Bricks, one of the most prominent online estate agencies also appears to be facing financial trouble due to the loss of confidence by investors within the company. As reported in the Negotiator magazine, Purple Bricks share price has fallen to its lowest amount in 21 Months as confidence in its business evaporates. The Motley Fool, a leading financial advice company believe that investors are wondering where profits may come from and that the company’s global expansion is at the moment too far reaching.
Purple bricks not only operate in the UK, but also have operations in Australia, North America and mainland Europe. Although the company has previously announced OK results in the UK it has been reported by several of the property news organisations that Purple bricks are struggling to make a profit in Australia and America. They have recently been forced to raise prices in Australia but many resignations have seen the number of property experts reduce from 105 in 2017 to 85 this year significantly impacting the business.
In addition to this, Purple bricks in the UK have been in the spotlight for all the wrong reasons on shows such as the BBC’s Watchdog which looked into their poor customer service levels. Add into the mix the disintegration of share prices and the international troubles and you can see why many are wondering if Purple bricks have stretched themselves too far and too thin leaving then vulnerable to trouble ahead.
Some people simply want out of the online agent model
For some the online agent model is simply not the way forward. In September the Negotiator reported the closure of online estate agency Hatched. Connells group, a large property business, spent a significant sum to buy Hatched but after a few years they have come to the conclusion that the solely online and hybrid agency business model is “fundamentally flawed”. According to Connells Chief Executive vast resources had been invested into the programme since 2015 and through rigorous testing of the online/hybrid model they concluded that it did not produce “A viable economic result”.
The main concern for Connells is that they feel the online model lacks the same level of customer service and advice that is provided in their high street branches. Connells Chief Executive explains: “Customers overwhelmingly demand our ‘full service’ and local expertise that blends traditional marketing techniques with the best technological advancements”. He goes on to say “Face-to-face accessibility, intimate local market knowledge, a progressive digital offering, dedicated sales progression – and not just a focus on winning instructions – undisputedly works best for our customers”.
One can conclude that the experienced property business Connells sees that the online agency model simply does not provide the same level of service as a traditional estate agency. So much so that they were willing to close the online agency Hatched despite spending huge sums of money on it. The fact that a business is willing to get rid of their online agency in this way is a huge warning sign for the online estate agency business. Luckily in this instance no customers have lots out financially like they could if the other online agents struggle.
A reputable local agent with a proven track record could be the safer option
As explained in our previous blog, ‘experts warn sellers to avoid paying full fees upfront’, a reputable agent could be the best option for sellers within the current property market climate. A local agent, opposed to an online only agent, will be confident that they can deliver results and achieve a sale for you. It is recommended by GetAgent, the estate agent comparison website, to choose an agent that has a no sale, no commission fee structure so as a seller you pay on results. GetAgent explain that a local agent who works in this way is incentivised to sell your property and to progress the sale as quickly and efficiently as possible otherwise they don’t get paid. Also by having a percentage fee they have an incentive to achieve the best possible price for you. By paying based on results you will ensure that the agent works hard to not only achieve a sale but to make you, and them, the most money. Paying a fee up front means that even if you never achieve a sale you have paid out, and a large amount of properties who have chosen to do this go unsold each year. This means that thousands of sellers in the UK have paid to NOT sell their property, essentially paying huge sums of money for the result they did not want.
If you are looking for a reputable local agent why not give us a call?
If you are thinking of selling your property why not speak to us. At Galley Properties we are confident we can sell your property for a great price and in the best possible time. Zoopla statistics show that for a number of years we have sold properties, on average, at more than twice the average Doncaster sales time. Last year, on average, we also achieved 97% of asking prices. In the past five years we have also won more awards than any other agency branch in Doncaster. But it’s not just about our amazing stats and awards, when you call our friendly team for a chat you will understand why that they can provide the level of service you need that you simply don’t get with an online agent. Why not give us a call today on 01302570470 and speak to our sales team.