News

What do you mean by online agent?

21st Jul 2017

At our recent customer roadshows, I asked those who joined us what proportion of property transactions would be handled by online agents within the next three years. The answers varied greatly from 5% to 100%, but there should probably have been another qualifying question… What do we mean by online agents?

When you look at most of the operators in this fast-evolving space, there are two key aspects to their propositions which resonate with consumers:

 

1 – Cheap fees

2 – Online service

 

CHEAP FEES

The cheap fees proposition isn’t new in estate agency and any given high street has had a half a percent operator for a considerable number of years. Some of the biggest brands in agency still use the low or no commission proposition to divide and conquer a new office area until such time as they establish market share. There is undoubtedly a market for low-cost operators, but how big is that market?

Perhaps the US offers us a glimpse of what the future may hold with a mature market in which undercutting traditional agents or Realtors has been an option for decades. FSBO (For Sale By Owner) sales accounted for just 8% of transactions in 2016 according to the National Association of Realtors’ Profile of Home Buyers and Sellers.

This has steadily declined from FSBO’s peak share of 21% in 1997, but much of that decline has shifted to ‘agent-assisted’ sales where vendors pay a fee to simply list their property on the MLS – the American equivalent of the property portal and akin to the service offered by many UK ‘online’ agents. Collectively, they still represent around a 20% of property transactions in the US.

20% market share in any given high street would be decent by most agents’ standards. 20% in every given high street equates to a multi-million-pound opportunity and the battle for this will undoubtedly continue for some time. This race to the bottom will be fuelled by big marketing budgets derived from ambitious market capitalisation.

 

ONLINE SERVICE

The other online agent battle is around the service point or, to be more specific, around removing the pain in the process of delivering a service.

Reapit has provided a set of online self-service tools to traditional agents for a couple of years and we have recently upgraded this suite comprehensively to include live booking functionality for valuations and viewings. This addresses the traditional pain point of telephone tennis to organise something as simple as a valuation, which seems archaic to consumers who are now used to arranging holidays, taxis, restaurants and all manner of other services in a few clicks.

Pain points can quickly become barriers to consumers when others offer a better, more convenient experience and those who insist on telephone contact in normal working hours are probably in for a wake-up email sooner rather than later.

Using digital tools to provide a great, customer-centric experience is the more challenging, but ultimately more rewarding, battleground for online agency. The devil is in the detail and the simplicity of the consumer experience of booking online is masked by a complex set of configurations to ensure the real-world requirements of the right branch organising the right appointment at the right time is considerable.

Our dedicated digital development team have a busy roadmap for the RPS Digital suite and there are plenty of other pain points to address yet.