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Disruptive
Whilst this 'disruptive' internet business and lower agency fees sounds great in theory we have seen time after time similar businesses fail. Why? The reality is property is all about the face to face. Most people get scared buying and selling a pair of jeans on ebay. To do the same with your life's biggest asset without any expert guidance is too much for the vast majority of buyers and sellers. In this respect the model is far from outmoded...it just does what most of us want from it.
Poor timing...
Added to the above is the fact that the aggregators don't like these strange online estate agent model who threaten their regular clients and income stream. With Zoopla looking to bar the online estate agents; one has to question the timing of this investment. Without the oxygen provided by the likes of Rightmove and Zoopla, eMoov could just be another one of the Internets' footnotes of failed business ideas.
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4 comments:
I would not agree that most people get scared buying and selling jeans on ebay. eBay have made an enormous fortune by being good at what they do and convincing millions of people that it's safe.
Sure, it's mainly younger people, but look to the future when these people are the main income earners and their offspring are internet savvy from the word Go. The internet is here to stay and as time passes fewer and fewer people will be scare of it, no matter how big the price tag.
I think online estate agency is appealing to younger people trying to save their hardly earned bucks from estate agents. I sold my 3bed terraced house through an online estate agent, paid £200 to advertise on the major websites like rightmove and eventually sold my house. It took 7 months to complete as there was a very long chain but that was in a very difficult market. I must say I literally did everything myself but saved myself around 3k of fees otherwise.
Over the years I have seen many of these type of operations - initially appearing pre Interent as Property Shops, where sellers could advertise their properties for a set fee. They all failed - so still not sure if they will work due to the on line availability of the net. It is not always about being technically savy - just having someone on your side assisting in the sale. Time will tell.
The reality is that high street estate and letting agents usually don't have an attractive, efficient and fair business model.
I am renting a property without a high street letting agent and saving a lot from their fees. If my fees were lower, I am sure agents would screw the tenant.
And all the time, I find more and more reasons to believe that agents do a very simple administrative work that doesn't justify their fees.
As other types of industries, high street property agents need to re-invent their business model, reduce their prices and offer a service that worth paying for. Otherwise they will just sink altogether to bankruptcy with more and more people using online services.
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