Online estate agent HouseSimple has launched what it calls a “weekly pay-as-you-go estate agent service” which asks sellers to pay from £9 per week to market their home with a £495 ‘success fee’ if the property is sold.
It will run alongside its existing fixed-fee option, which involves customers paying £395 on completion of the sale or after 12 months, whichever happens first.
It claims the structure will “better meet the needs of the consumer” who may still be unfamiliar with how online agents operate and charge.
It says the pay-as-you option enables sellers to put their property on the market, and try out the online agency service, without paying the substantial upfront fees which are often criticised in the online business model.
The vendor is not tied into a contract and can cancel the service at any time, and can advertise on the agency’s website for as long as they pay the weekly charge.
"Unlike high street estate agents, who stubbornly refuse to change their commission model to provide a better value service to home sellers, we are continually striving to meet the needs of our customers” says Alex Gosling, the firm’s chief executive.
"We recognise there is still some uncertainty amongst home sellers around online estate agents, and the existing up-front fee model can dissuade people if they've never sold a property online before. We wanted to address that concern and make the service more accessible to all.”
While many analysts say the online agency sector accounts for around five per cent of all residential transactions, Gosling says it is actually only around four per cent - and that comes after a doubling of its size in the past 12 months.
Sir Charles Dunstone - founder of Carphone Warehouse and chairman of TalkTalk and of Dixons Carphone - together with his business partner, Roger Taylor, recently invested £5m into HouseSimple.
The website claims to have sold or let more than £1 billion worth of properties to date, and to save sellers on average £1.2 million in fees every month.
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Well well well. What were the chances of this release being accompanied by a swipe at 'traditional' agents.."Unlike high street estate agents, who stubbornly refuse to change their commission model " What Gosling doesn't seem to understand is that the general public really couldn't care less about the in-industry squabbling between two different business models. He should be taking the opportunity to say how good his service is, rather than the continual swiping at others. As he admits there is still some 'uncertainty' from home sellers around online agents...I would say it is a little more than 'uncertainty'.
Indeed, John. Both sides are as bad as each other. If we could put this playground level squabbling to bed once and for all, we wouldn't have so many of these 'my model is better than yours, ner ner ner' type articles.
I hear on the grapevine that they're about to start a TV ad campaign and tube advertising. Sounds like Charles Dunstone's money is about to be put to the test...
Interesting concept. Not sure it has legs - and might be a case of innovation for innovation's sake - but we shall wait and see.
It seems they've managed to get a fair bit of funding behind them but I'm not quite sure that this will grab the consumers attention in the way in which it desires.
Interesting, Greg. There's no doubting the amount of money that has been ploughed into online agency by these experienced business people. Do the public really know or care that there is a 'different' way to sell their home yet? I'm not sure. If they come into contact with PB for example and like the service offered then they will go with them. I don't really understand why onliners continue to place themselves against full service agents. Selling the benefits of your own business is what will win the consumer over. Let's see which route HS' advertising goes down.
That would suggest they've got some significant backing then, Greg.
I personally can't see the model working, but I'm willing to be proved wrong. I suppose we will just have to wait and see how this plays out. Interesting times.
Yeah, Karl, they have! Something to the tune of £5m I think you'll find!
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