easyJet founder Sir Stelios Haji-Ioannou aims to make buying a home easier
The entrepreneur behind the budget airline has entered the competitive world of online estate agents. Rob Griffin looks at what he, and others, have to offer house hunters
Friday 18 April 2014
He has already revolutionised air travel with his innovative, no-frills services, and now entrepreneur Sir Stelios Haji-Ioannou is planning to enter the increasingly competitive world of online estate agents.
The founder of airline easyJet is joining forces with property entrepreneur Robert Ellice to "shake up the UK property market" and make buying, selling, renting and letting "simple, quick and cost effective".
The site – easyproperty.com – is expected to launch at the end of the summer. It will initially focus on lettings with services for residential sales likely to be introduced next year.
Mr Ellice is pledging that the new, totally web-focused venture will slash fees by making property transactions straightforward and offer more services than are currently offered by traditional estate agents.
"The sector is ready to take off and we have got an internationally recognised brand," he says. "We can offer choice, cost savings and don't need offices across the country. It will be a new-style estate agent of the future."
Key will be building something that is more flexible and convenient. In particular, he makes the point that many transactions can be made at any time of day.
Which begs the question, why you would want to be restricted by office-opening hours when it comes to house sales?
"It's ridiculous that you can view the property online but you can't do the paperwork or put your deposit down," Mr Ellice adds. "If you want to move in on the weekend you can't pick your keys up easily so have to take time off work. That's not for today's lifestyles."
Of course, saving money by sidestepping traditional estate agents is nothing new. For many years people have tried marketing their own properties on eBay, setting up websites to showcase their homes and doing leaflet drops in a bid to find potential buyers.
The new venture by the easy team will be the latest in a long line of websites launched to take advantage of our love for the internet and general disillusionment with paying thousands of pounds in commission to traditional estate agencies.
When you consider the cost benefits you can understand their enthusiasm. Even though fierce competition means many agents now charge just 1 per cent of the selling price, this still equates to a fee of £2,540 for an average house worth £254,000.
Given the fact that many online rivals charge around £500, property consultant Kate Faulkner of Designs on Property isn't surprised that the demand for web-based services has been growing in popularity, but points out it's not a straightforward choice.
"This market can be divided into three groups," she explains. "The first are traditional agents that have a high-street presence but also an online facility. Then you have the early online agents (passive agents) to whom you'll pay £50 for them to put it on a website."
The final group features the online businesses offering estate-agency services.
"These are the most interesting," she says. "They offer all the services provided by an estate agent, such as being on the end of a phone, and can advertise your property on the likes of Rightmove, which you need to be on in order to reach the whole market."
Sir Stelios is taking advantage of our general disillusionment with paying thousands of pounds in commission to traditional estate agencies (Getty Images)
There is certainly no shortage of offerings with the likes of eMoov (www.emoov.co.uk), House Simple (www.housesimple.co.uk) and Hatched (www.hatched.co.uk) all offering various options to sellers depending on their needs and how they want to pay the fees.
One of this new breed of online offerings is Tepilo (www.tepilo.com), which has been set up by property developer and television personality Sarah Beeny, and claims to offer all the services of a traditional estate agent – but just online.
A member of The Property Ombudsman Tepilo follows its code of practice. As well as sending round an agent once instructed, it will also handle any offers received.
"I felt there should be an option for people to be able to pay less if they wanted to," Ms Beeny explains.
"People can get all the services they need and have their property online, which is where the buyers are, without having a high-street shop."
One of the options offered, for instance, requires an upfront payment of £495, which includes basics such as a home visit and advertising on Rightmove and Zoopla. Optional extras include a for sale board (£50) and professional photography (£99).
"People want to decide how much hand-holding they need," she adds. "If they want floor plans they should be able to pay for them. Similarly, if they want someone to deal with the viewings then they can pay extra. It seems a fairer way to do things."
Regardless of which online offering is most suitable, sellers need to ensure they have some element of protection, according to Christopher Hamer of The Property Ombudsman (TPO) scheme, an independent and impartial dispute-resolution service.
For example, members of TPO agree to comply to a code of practice which includes strict guidelines on issues such as market appraisals, what constitutes a fair contract, clear charging structures, and transparent terms and conditions.
"Consumers may not realise they aren't dealing with a proper estate agent until they find out later they don't have access to some of the protections," he says. "The passive agents are not subject to the same obligations that a normal estate agent must adhere to."
For example, the ombudsman can make compensatory awards in individual cases up to a maximum of £25,000 for actual and quantifiable loss and/or for aggravation, distress and inconvenience caused by the actions of a registered firm.
When you consider the latest report from the TPO reveals the number of complaint enquiries received rose 25 per cent in 2013 – 63 per cent of which were from sellers – it illustrates how important it is to safeguard your interests should problems occur.
So what else do you need to consider when choosing the right service provider?
The first step is to see what's on offer, what you will get for your money and which extras will be required – then you can decide if this meets your needs, according to Mark Hayward, managing director of the National Association of Estate Agents.
"They are not going to be able to offer all services at the rock-bottom prices that some are quoting," he says. "It's like buying a budget air fare. You will get other things added to your bill, such as floor plans, so the headline figure may not be what you end up paying."
It's also important to establish the agent's expertise in valuing properties, the role they will adopt throughout the selling process and what will be expected of the seller. All of these are crucial factors to consider before making up your mind.
"Only an agent on the ground selling day-to-day in your area will know exactly what you're going to get for your property," he adds.
"Also, if you're paying up front then what incentive does the online agent have to get your property sold?"
In addition, you need to know your limits, points out Ms Faulkner. "Not all online agents will do viewings – and it's much nicer for the buyer to have a third person not attached to the property showing them around as it can otherwise be quite awkward," she says.
It all goes to prove that the decision is not a simple one.
"I've seen a few (online) business models that would work but other sites are confusing, not upfront with their fees and fail to give good advice – such as the requirement to have an energy-performance certificate in place at the time of viewing," adds Ms Faulkner.
Despite all these new options becoming available it's not time to sound the death knell for traditional estate agents just yet, agrees Mark Hayward at the National Association of Estate Agents, who suggests that 80 per cent of what an agent does starts after a buyer is found.
"When you're dealing with a member of the public's largest purchase they will want traditional assistance with someone managing them through that process," he says. "We're in the digital age now so there is a place for online services – it's just not clear how big it is."
Case study: Website seller
James Daley sold his property via an online agency and had such a good experience he can't understand why everyone isn't going down this route.
The 36-year-old, who runs Fairer Finance, sold his two-bedroom flat in Wandsworth, London, via website Hatched for just a few hundred pounds.
And considering the sale price was £206,000 he managed to save himself more than £2,000 by not going with a traditional estate agent.
"I thought it was brilliant," he said. "I saved a lot of money and the only downside was that you didn't have anyone showing people around when you were out.
"You just had to be flexible enough to ensure someone was home for the viewings," he added.
Unsurprisingly he would use online services again.
"People are just as likely to come across your property on one of the big search engines as they are by walking in to a high-street agent."
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