Until about 20 years ago, a DIY sale of one’s own home was confined to people with special skills (eg solicitors or marketing types) or the brave or tight-fisted.
The internet has changed all that; if it’s possible to sell a Maserati or a range yacht online, why not a suburban semi?
No one wants to pay more for a professional service than they need to
However, today’s DIY sales are not as we used to know them; rather the trend has been encouraged by the emergence of a new breed of agent which offers a digital platform for sellers and claims to guide them through the process.
The service has caught the imagination of the City, which is why the share price of one of the leaders, Purplebricks, launched at £1.36 at the beginning of March 2016 had, by the start of this month, risen to £3.53 even though the company has still to produce a profit.
• READ MORE: Purplebricks eyes major expansion as sales rocket
As is the case with most areas of consumerism these days, the digital newcomers focus on price and by charging a fixed fee, undercut conventional estate agents, most of whom base their charges on a percentage of the selling price (incidentally, ensuring that the first-time seller pays less, both pro rata in real terms, than someone in a larger, more expensive, property).
Clearly agencies with an on-street presence and full complement of trained staff (with all the attendant costs) have a fight on their hands.
However, we cannot afford to pull up the drawbridge but must meet the challenge head on by upping our game and treating the new playing field as an opportunity rather than a threat. Which means taking on new technology and ideas to complement, rather than replace, our traditional levels of service.
Without the right people expert in their particular field (and full administrative back-up) technology has little or no benefit. Consequently, a conventional agency, operating at full efficiency, should be well placed to exploit the technology adopted by the “new kids on the block” and by combining this with their experience and greater manpower levels, offering an enhanced service.
But, I hear you say, this counts for little to Joe MacBloggs, when the online agency is offering a fixed fee of, say, £900 to sell a house whereas a conventional agency might charge several times that.
No one wants to pay more for a professional service than they need to but a salient reason the conventional agency charges so much more is because it is manned by experts with sound experience not just of the property sector but, even more crucially, their local market.
Thus the charge should be viewed against an ability to achieve the highest possible price under local market circumstances, leaving the vendor better off in net terms.
Helping to achieve this is that an on-street agent will provide face to face meetings with clients whenever reasonably required. One online company simply offers the contact number and e-mail address of your “dedicated expert”, who might work from home or be based in some garret.
Another area where the conventional agent is likely to be streets ahead is post-sales support. Look around any residential suburb and you will see agents’ boards with the words “Sold subject to conclusion of missives” or “Under offer”. These caveats used to be virtually unknown in Scotland because once an offer was formally accepted the property was more or less sold – no ifs, no buts.
They reflect how much more open to question a buyer’s commitment to purchase has become. In such a scenario would a seller prefer to seek guidance from a call centre – or talk in person to their dedicated agent with legal contacts or back-up?
To clarify, I am not against innovation and clearly some of the new ideas introduced by the digital players will benefit the market as a whole. However, I remain hopeful the majority of sellers will continue to use conventional agents based on the adage that ‘technology makes things possible; people make things happen’.
• David Alexander is managing director of DJ Alexander