Disruptive Technology, Can the High Street Estate Agency Survive?
Outside of work I don’t usually spend time thinking about technology, I’m a bit of a luddite really. I know vinyl records are back – but for me they never went away! Recently, a couple of things have prompted me to think that the high street estate agency model might be staring into the abyss.
Online estate agencies have been pushing hard on TV advertising and becoming better known by the masses. Their fixed fee model is extremely attractive to the average home seller who can save hundreds of pounds on what is likely to be the largest financial transaction most people undertake.
However, the established thinking, and a view I have always shared, is that whilst high street agents charge more commission than the flat fees of online agents, the high street agent earns their fee by added sales value. Unlike online agents, high street agents have the advantage of local knowledge, they can advise sellers how best to present their property to maximise value and they organise viewings. To challenge the rise of the online agent, in 2015 a consortium of well-known high street estate agents joined forces to launch OnTheMarket.com, a home sales platform not accessible to the purely online estate agents. But has it worked?
There is a second change in the wind which starts to challenge my long-held view. Recently a local Property Consultant has door-stepped my home proposing to “advise on presenting the house for sale or letting”. Again, it’s a fixed fee proposition, and a modest fee at that, from somebody working independently with low overheads (basically a car, a camera, a laptop and their knowledge). Could these lower priced consultants combined with online sales rival the high street estate agency model?
Twenty years ago, most high streets had two, three, maybe four travel agents. Apart from just a few niche providers, high street travel agents are a thing of the past, online has taken over. My feeling is that the high street estate agency model has value but it is under pressure and must evolve to survive.