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Our family has spent the last few weeks moving house, and two things became clear to us throughout the whole process – how important the internet is in marketing your property, and what a totally noisome experience it is to deal with most estate agents.
Although neither conclusion is newsworthy, it got me wondering whether Freakonomics is right and that the current industry model is set for annihilation at the hands of the web…
There are now no less than 17 estate agents clustered around the crossroads at the top of our local high street. They are clearly doing well. Some of them call themselves ‘property consultants’ and look more like nail bars from the outside. But why do they actually exist? Do they actually save you time or effort? Or - to use industry lingo - are they a complete WOFT?
Going purely on how our property was brought to market and priced, we aren't sure how agents add any value any more.
When we started out, we chose three companies - one local, one regional and one London-wide - to value our house and were expecting some disparities. But the differences in their efforts were huge. The range between the lowest and highest was almost a third of the property's eventual value, and one seemed more interested in what we thought it was worth than actually looking at the house and doing some maths.
So if it’s clear that sellers have a large hand in the pricing of properties anyway, why not do it yourself? There is lots of good info on the web to help research house values in specific areas – like property search engines and sites such as Upmystreet and Houseprices.co.uk. Using the net, you could also promote your house or flat pretty effectively. The problem is that the major listings websites don't display properties from individual sellers, only from agents.
One encouraging thing that we surmised from our move was that online performance is now a major differentiator between property companies – at least at face value.
All agents know that the vast majority of housebuyers use the web for research. The ones we spoke to were very keen to show us how many directories and search engines their listings appear on, and how they monitor clickthroughs to gauge interest from buyers. But how well do they actually analyse this traffic and respond to the data? Not very well, it would seem.
We had to point out errors in our listing (i.e. placing the Google Maps pointer in the middle of a busy road around 50m away from the house, not uploading the photos and neglecting to mention other pretty important details), when the agent should have noticed a lack of impressions. It then took its IT team five days to fix them.
This could have been an isolated incident, but it was more than a little annoying – especially when you’re at a disadvantage as a buyer until you make a deal on your own house, and when your agent uses its supposed web marketing skills to justify its charges. It also leads you to question whether you are getting value for money by employing an agent or are better off taking the DIY route.
Considering the costs of employing an agent, the process of selling your house still involves a lot of hassle. You still have to harry it for feedback and keep on top of how it is performing. And although we sold quickly, there was a big void in communication and CRM by the agent we chose.
Nearly all your decisions as a buyer are affected by how your own property is doing on the market, so is some email reporting too much to ask for? Perhaps it is, especially in an industry that relies on providing its customers with as little information as possible.
Our internet experiences as buyers were also pretty patchy. Some agents’ sites were clearly highly optimised and usable, but others weren’t.
One of our main gripes was the amount of properties being displayed that were actually under offer or already sold. How is that helpful? Doesn't it encourage gazumping? And although all agents we spoke to used email to provide updates on new houses coming onto the market, we’re yet to have been able to remove ourselves from some of their lists, and none seemed to do any sophisticated targeting.
When it comes to the aggregators and search engines, they are also quite a mixed bag. Findaproperty and Rightmove were the ones we were recommended by most agents, but we didn’t find the former’s search facility particularly user-friendly. Why display sold properties by default, for example?
Also, many individual listings on these sites lack important details, don't include a floorplan or even photography. We couldn't search by categories we would have found useful, such as by square footage rather than number of bedrooms, and some agents seem to be willing to try anything to become more visible in the results.
On the other hand, we found vertical search engines like Zoomf, Extate and Nestoria to be much more usable, but they also have downsides. They had far fewer properties on display, for example. And none of the three agents that valued our house had heard of them.
As a buyer, all this basically means you have to regularly check a number of sites – not a massive hassle. But it would be great to have a service that stores your favourite properties from different directories, search engines and individual agents. Zoomf is planning to launch one, but it isn’t available yet.
There are all the old arguments about estate agents to consider as well. We found it doesn’t matter if you’re a buyer or seller - if you want a good deal, you have to work hard.
As a seller, you’re pressured into selling your house in order to buy, then pressured into buying a house in order to exchange. The two agents we rejected also tried to lock us into long contracts with big notice periods. And as a buyer, you have to contend with fierce competition and clever tactics like open hours.
But there are still few alternatives to the agency route, and I'm sure the industry will have some fiendish plan to deal with any threat to the status quo – just like it has with online competitors set up over the past few years. Perhaps it will take more difficult market conditions to see any change taking place.