Nowadays more and more people are choosing to sell their properties themselves directly to the buyer, cutting out the need for a middle man. If this trend continues it could mean the end of estate agents as we know them.
Advances in technology and attitudes to its use are driving this revolution. The success and popularity of sites such as eBay and Amazon have calmed the public’s initial concern over internet commerce. Now rather than fear or ignore the potential of the internet, normal members of the public are using it as the powerful tool that it is.
The job of an estate agent is to market and sell a property and for this service they charge between one and four percent of the value of the property plus VAT. This charge will, on most properties, run into thousands. If a person could successfully fulfil the role of estate agent then they would be looking at a very large saving.
A proliferation of property portals and do it yourself sites have sprung up to help people avoid the agent. These sites charge around £100, which includes a listing on their website, their partners websites and a 'for sale' sign. There are also sites such as www.gumtree.com offering free listings to which you can add your own pictures or link to a video hosting site so potential customers can see the property.
Martin Charlick, the managing director of property portal The Little House Company, said, “Estate agents will go out of business if they do not adapt and change. They will have to improve their service and will have to actually provide a service that is worth what they expect to charge.”
Estate agents do more than put an advert in the window though (well at least they should do). They organise viewings, make negations and they know the property market. This means they are able to value a property correctly which is incredibly important when it comes to selling quickly and not being ripped off.
Peter King, Chief Executive of the National Association of Estate Agents (NAEA) warns DIY sellers: “For many it can actually mean making less on the property than they would have done through an agent, even after taking fees into account. Getting the price right in the first place takes expertise. DIY vendors can easily sell themselves short because they don’t have the inside track on the local market.”
When you pay a commission fee to an agent, you are not only paying for their leg work but for the benefit of their knowledge and experience. If people are not confident about valuation, the local market and negotiating price then they are probably best with an agent.
Another option for the homeowner is to both DIY sell and go through an agency. When you sign up with an agency you are normally within your rights to sell the property privately. Most agents contracts are Sole Agency Contracts, which means that they only get commission if they sell the property for you, although you cannot use other agents you can sell the property yourself. The benefit is that once you let the agent know this is what you are doing it makes them work really hard to make sure they get that commission.
Unconcerned by the rise in DIY selling Mr King said: “We certainly do not see private selling as a major threat. There will always be strong demand for good, professional agents who can provide expert guidance and support for consumers who are making their way through the complicated home buying and selling process."
There is no doubt that DIY sales are threatening some estate agents, despite Mr King’s confidence. People are becoming increasingly informed and as a result have more confidence dealing in the property market. Unless Estate Agents can prove their worth then it is likely that they will be the ones selling up and moving on |
