Google Real Estate: Coming to a street near you

From next month, the biggest name on the internet will be cutting out the middleman and challenging the property professionals at their own game. Graham Norwood reports
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The Independent Online

Buying and selling a home is never going to be the same again. One day soon we are all going to be changed into, of all things, estate agents. That is because next month the all-powerful Google search engine is to test a future British house-sales website. Google refuses to comment on its plans but several estate agents say they are in negotiations with the firm. A spokeswoman says its new Australian property site may be a template of how a British version may look.

Down under, where Google Real Estate began in July, the way homes are bought and sold has been revolutionised with consumers empowered to become their own estate agents. The service is free, and open to individual home owners or landlords letting their own homes, as well as to professional estate agents.

People email property details and images to Google, which then places them into its database of maps and photographs in its Streetview service.

"It's cracked open the market here. So far agents haven't lost much business but we're expecting that to change by the end of 2010. If Google remains free and builds its profile, there's no way sellers will pay agents when they can do it themselves," explains Mitch Benson, a Melbourne estate agent who moved from Surrey in 2006.

Will the same happen in the UK? "It depends whether Google is free," says Ed Mead of London estate agency Douglas & Gordon, which has already entered into discussions with Google. "If it is, it'll be a winner. If not it'll struggle. Commercial advantage counts."

D&G is one of the few British agencies with a developed "new media strategy", so using the new Google service will complement existing activities. It has an interactive website and a frequently updated blog, and its staff are geared to new ways of working.

A few other property firms are experimenting with new ways of selling and buying. The search agency Property Vision has 14 staff contributing to a daily blog, while sales agency Chesterton Humberts provides ad hoc market data on Twitter.

But these examples are rare. Most property firms, from high street estate agents to volume house builders, simply advertise their homes on websites and still rely mainly on printed details and personal visits to branch offices.

That is why they charge sellers commission rates of up to 3 per cent – £6,000 on a typical £200,000 home – and why in the lettings market they levy fees for finding and vetting tenants, and even for routine work like extending existing rental contracts.

David Newnes, managing director of Your Move, doesn't see Google as a threat: "Private sales are certainly much talked about. But less than 5 per cent of sales are private, and buyers and sellers still want and need the expertise of an estate agent."

And until now private sales websites, unlike property portals, have struggled to find enough homes to encourage buyers to think of them as a "first resort": www.mypropertyforsale.com, for example, has just three entries for homes in six Exeter city postcodes.

Richard Barber of estate agency W A Ellis says: "Since the advent of the internet there have been private sales sites, none of which has negatively affected traditional businesses. Professional agents with excellent track records and high standards of service will continue to be required by sellers, purchasers, landlords and tenants."

But a global brand like Google will put previous websites in the shade. Its Australian service already has "hundreds of thousands of homes," says a spokesman. More than just buying and selling will change if the British site enjoys similar success.

Local papers used to see housing ads as a cash cow but revenues dropped 60 per cent or more in the recession and after aggressive marketing by rival outlets, including "property portals" like Rightmove and Primelocation.

Now it is those portals – which currently charge estate agents to display properties for sale – which appear vulnerable to the Google onslaught. Rightmove shares slumped 13 per cent on the December day it was revealed that the search engine firm would enter the British property market, although it has regained some of that loss since.

"The internet is changing the market from 'seller-driven' to 'buyer-driven,'" says Graham Downie, a former Savills agent who now runs cognacproperty.com and uses a blog and Twitter for publicity. "Estate agents have been all-powerful, controlling information on what's available, how much a property's worth and how it's best marketed. Portals and sites have chipped away at this, and with Google entering the market the walls protecting this information will soon crumble and fall."

Whether agents like it or not, Google is coming and by next Christmas we may able to buy and sell homes without paying them a fee – a present many people may think is long overdue.

Deals Down Under: Google's Australian experiment

* Google's Australia service is more useful than any current British internet property portal. The obvious advantage for sellers is that it is free and has a huge range of homes, making it a 'must visit' starting point for would-be purchasers or renters.

* For buyers and those looking to rent, it works like this: You indicate on a map where you want to live – county or town, right down to specific neighbourhood and street; add your criteria (price, bedrooms, must-haves); Google then finds all listed properties with red dots. You can then view all the details and pictures provided by estate agents and private sellers.

* So far, so similar to other property search engines. But then: Google Streetview allows you to look at images of a street and locality and 'walk through' the neighbourhood (not just see closely cropped images); you see map locations of nearby schools, cafes, parks, shops, pharmacies, bus stops and so on; you can calculate your commuter drive or train trip to work, making direct comparisons with other properties in your price and location range.

See www.maps.google.com.au

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