Posts with tag: estate agent fees

HouseSimple Changes Advert Following Complaint

Published On: August 27, 2015 at 8:50 am

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An advertisement on London Tube trains for an online estate agent featuring a savings claim has led to a complaint to the advertising regulator.

The HouseSimple advert states: “Save £15,665 versus average Foxtons fee of 2.4%.”1 

The complainant went to the Advertising Standards Authority (ASA) saying that they believed the advert to be misleading because it did not make the basis of the savings claim clear.

HouseSimple Changes Advert Following Complaint

HouseSimple Changes Advert Following Complaint

It has now emerged that the complaint has been informally resolved.

An ASA spokesperson says: “We approached HouseSimple with the concerns that had been raised.

“It agreed to amend the ad to make clear that the savings claim is based on selling a property at their current average London asking price.

“On that basis, we considered the matter had been resolved and closed the case.”1

HouseSimple comments: “The complaint was relating to clarifying on an advert we are running on London Tubes and how we came to the savings figure of £15,665 versus average Foxtons fee of 2.4%.”1

HouseSimple reveals that its average London property costs £561,373 and its average vendor fee is £502.80. Foxtons’ fee on a home of the same value would be £16,167.51, based on its 2.4% + VAT fee.

HouseSimple used Foxtons’ current average asking price of £885,553 to calculate the potential savings that clients could make, a huge £25,001.

The agent also used Rightmove’s average listed asking price for a London house, £615,115, to calculate an average saving of £17,213.

Head of HouseSimple, Alex Gosling, adds that the London Evening Standard has banned a similar advert, as it mentioned Foxtons.

He says: “The Evening Standard disallowed a similar advert due to the fact Foxtons is a long standing advertiser with them.

“Whilst this may seem anti-competitive to some, we understood the position the Evening Standard were in and so agreed to suggested amendments without taking further action. Interestingly, when the advert was amended and subsequently published, guess who had an advert on the next-door page to HouseSimple… Foxtons!

“We have existed for over eight years now and the levels of anti-competitive behaviour have always been high in this industry. We have fought through numerous issues such as adverts being disallowed in numerous publications or websites, to being thrown off well-known portals and even more recently banned from portals such as OnTheMarket. It is all symptomatic of an industry fighting change and desperately trying to hang on to its high fees.

“We are proud to have started this industry renaissance and to still be spearheading the revolution.”1

Earlier this year, Carphone Warehouse founder, Sir Charles Dunstone and his business partner Roger Taylor, invested £5m into HouseSimple. They plan to invest in the firm further.

Recently, HouseSimple hired creative agency Wordley Production to create its first TV advert.

1 http://www.propertyindustryeye.com/online-agent-agrees-to-amend-money-saving-advert-after-complaint-to-watchdog/

easyProperty Now Does Sales

Published On: August 11, 2015 at 2:57 pm

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Online agent easyProperty has ventured into the residential sales sector, believing it will save “home-sellers across the UK thousands of pounds in hefty high street fees.”

The new offerings are priced from £475 to £1,500.

easyProperty aims to reassure vendors by stating that most of its staff as “ex-high street agents with years of experience at big-name firms.”

It also says: “It’s little wonder online agents are starting to become pretty popular indeed.”

easyProperty claims to offer customers an average saving of £3,269 and £9,584 in London.

easyProperty Now Does Sales

easyProperty Now Does Sales

The firm launched in September 2014 with a lettings division and more recently a commercial property sector.

Robert Ellice introduced the site, which says: “We advertise on all the UK’s leading property websites, to line up prospective buyers fast – not all agents do.”

It emphasises that high street agents cannot list on Rightmove and Zoopla if they also use OnTheMarket. easyProperty states: “We advertise your home on both the UK’s biggest portals, where buyers search first.” 

easyProperty is now offering three packages, all with fees paid upfront and in full.

For £475, vendors host any viewings and deal with the sales progression.

At £825, sellers host viewings but easyProperty handles the sales progression.

The most expensive deal, at £1,500, involves a full service, including premium listings on Rightmove and Zoopla.

The lowest price is cheaper than Purplebricks’ flat price of £798. Purplebricks charges £1,158 in some areas of London.

Other agents’ prices vary massively, with split fees becoming increasingly popular. With these deals, vendors pay a cost upfront and then another fee upon sale.

For instance, a seller could pay £9 per week with House Simple and a £495 fee on completion, or £395 if they have sold through House Simple or been listed for 12 months.

Tepilo charges from £595 to £955. eMoov’s prices range from £594 to £1,194 on a no-sale no fee-basis. Hatched charges £295 upfront plus £595 on completion, or nothing upfront and £1,495 upon a sale or £595 upfront.

eMoov states that it is still analysing its no-sale no-fee price plan.

Hatched, run by Adam Day, is no longer focusing on being a low cost service.

The first 200 vendors to sign up to easyProperty are being offered “the chance to sell their home without paying any agency fees.”1

Yesterday on Rightmove, easyProperty had 408 properties available for rent.

The company said it may float on the stock market later this year, hoping to fund international expansion and a room rentals division alongside entering property auctions. Last year’s fundraising valued the firm at £66m.

1 http://www.propertyindustryeye.com/easyproperty-goes-into-sales-promising-to-save-sellers-hefty-high-street-fees/

Bank Says Online Agents are a Threat Within the Industry

Published On: August 7, 2015 at 11:58 am

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Barclays has warned that cheap online estate agents, such as Purplebricks, are credible competitors within the industry.

On Wednesday, shares in Foxtons estate agents dropped for the second consecutive day.

Barclays questions whether Foxtons can justify charging fees and believes that online agents “will drive commission rates down in time.”

On Tuesday, shares in Foxtons declined by 4% and on Wednesday by a further 2.07%, ending at 236.80p.

Barclays is concerned about sales volumes, fee levels and the fiercely competitive London market in which Foxtons is mostly based.

Bank Says Online Agents are a Threat Within the Industry

Bank Says Online Agents are a Threat Within the Industry

Jon Bell, of Barclays, says that although the general election result removed the fear of a mansion tax, “the extent to which volumes have rebounded since then is unclear.”1

The bank’s analysis states: “Ahead of the important month of September, we believe that the company’s post-election recovery is likely to be patchy, particularly for estate agency, for four reasons.

“First, there is a lack of available stock in the market.

“Second, last December’s Stamp Duty changes raised the tax on expensive properties, although some way above Foxtons’ average price point, and there could be a spillover effect on overall volumes.

“Third, the normal level of annual transactions in the capital is likely to have fallen over time: we stay longer, we move less, we dig more basements.

“And finally, we believe there is some pressure on fees.”

Barclays doesn’t know whether Foxtons can continue justifying its high fees, as online agents charge much less.

It continues: “Online agents, such as Purplebricks, operate with little or no high street presence and charge much lower fees than traditional players. Growing quickly from a low base – we understand that online market share is around 3.5% – they are disruptors; new entrants changing long-established norms.

“Foxtons has an unstinting belief that its fees – likely to be the highest in the market – are supported by a premium service that delivers superior net returns for its customers.

“Our view is that in a commoditised London market, where visibility over prices (expressed in £ per square feet) is high, online agents could start to demonstrate that they can deliver equivalent returns. Should they do this, then operators’ ability to charge more is compromised.

“We believe that new entrants will drive commission rates down in time, and that this will have repercussions for Foxtons, given that they underpin its very high (around 30% EBITDA) margins.

“This underlying attrition is in addition to that arising from a mix change: a greater proportion of new build sales (15% of its current pipeline, higher than 10-12% previously) on which commission rates are relatively low.”1

Foxtons is currently opening five to seven branches per year, but several other agents are making their presence felt in London.

The Foxtons share price is currently down from a peak of 295p last August, but up from its 52-week low of 142.70p in November 2014.

But other agents have continued to perform well, despite negative activity in the first half of this year. All agents reported a fall in transactions.

Shares in Countrywide fell by 1.46% on Wednesday and LSL shares dropped by 0.28%.

1 http://www.propertyindustryeye.com/barclays-says-online-agents-could-represent-credible-challenge-in-industry/

HouseSimple Defends New Fee Structure

Published On: July 20, 2015 at 1:15 pm

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Categories: Landlord News

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After introducing a pay-as-you-go fee option, which includes a success fee, online agent HouseSimple explains what its customers want.

The firm also confirms details of Carphone Warehouse founder, Sir Charles Dunstone’s investment in the company and its plans for improving the online estate agency sector.

HouseSimple is due to begin advertising on television “imminently” and will fundraise soon as it hopes to quadruple in size over the next 12 months.

HouseSimple Defends New Fee Structure

HouseSimple Defends New Fee Structure

It will also start advertising on the London Underground in the future.

On the new fees, HouseSimple CEO, Alex Gosling, says: “Until last week, HouseSimple did offer customers a no sale, no fee option.

“We introduced the £995, plus VAT, option back in 2007 but it has consistently been our least popular choice amongst our customers.

“The no sale, no fee price plan has now been discontinued.

“We have listened to our customers and given them what they want.

“We have brought our fees down to a much more appealing and realistic level, while still focusing on offering a high quality service.”

Gosling also states that Dunstone and his business partner invested £5m in HouseSimple.

He explains: “The investment agreement was for £5m and the valuation was in double digits.

“HouseSimple.com is also likely to be raising significantly more in the coming months.

“The company has doubled in size in each of the last two years and is now looking set to quadruple in size over the next 12 months.”1

eMoov’s Russell Quirk places HouseSimple fourth in a ranking of online agents, based on current inventory and weekly run rates. The top ten is as follows:

  1. Purple Bricks
  2. eMoov
  3. House Network
  4. HouseSimple
  5. Tepilo
  6. Hatched
  7. Open Houses
  8. Urban Sales
  9. Estates Direct
  10. MyOnlineEstateAgent.com

1 http://www.propertyindustryeye.com/customers-did-not-want-no-sale-no-fee-says-online-agent/

 

Average Estate Agent Fee is 1.3% for 15th Consecutive Month

Published On: July 20, 2015 at 11:14 am

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Average Estate Agent Fee is 1.3% for 15th Consecutive Month

Average Estate Agent Fee is 1.3% for 15th Consecutive Month

The UK’s largest conveyancing firm, Myhomemove, has revealed that the average estate agent fee in June was 1.3%, for the 15th consecutive month.

When the rate first dropped in April 2014, the average fee would have been £2,925.

Last month, this had increased by £83, due to rising house prices. As inflation is at 0%, this is a net gain.

June’s house price fall was unexpected and now the housing market is continuing its recovery with a 6.4% monthly increase, to £235,992.

From January to June this year, property prices have risen by 2.9% on average and annually by 5.5%.

These prices are based upon completed house prices, not asking prices.

The average fee does not include online and hybrid agent fees.

The average time to receive a mortgage offer has grown by another half day, to 49 days. This is around a week quicker than last year.

 

 

 

 

 

 

 

 

 

 

 

Online Agent Changes Fees to Pay-As-You-Go

Published On: July 16, 2015 at 4:49 pm

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HouseSimple, an online agent, has introduced a new fee structure.

Customers can choose to have one week’s free trial of the new fees followed by a weekly pay-as-you-go charge of £9, plus a success fee of £495 if the property sells.

Alternatively, they can pay a lump sum of £395 on completion of the sale or after 12 months of the property being on the market, whichever comes sooner.

Fees are reduced if vendors use the company’s conveyancing and mortgage broking services.

Sellers are not tied into a contract and under either payment plan, they receive services including valuation guidance, photography, floor plans and marketing on Rightmove and Zoopla.

HouseSimple also arranges viewings, and manages the negotiations and sales progression through to completion.

CEO of HouseSimple, Alex Gosling, says: “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.

“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.

“The free one week’s trial and pay-as-you-go payment plan that we’ve introduced gives home sellers the opportunity to see how selling their property online works.

“Once they’ve dipped their toe into the water, they’ll wonder why they never tried selling with an online estate agent before.”

Gosling ignored the high street’s no-sale-no-fee model, but claims: “Consumers are fed up with paying the exorbitantly high fees that traditional estate agents charge.

“Many home sellers are paying through the nose for a poor quality customer service experience from a high street agent.

“Online estate agency is the future of this industry. Not only do we offer an equivalent service to the high street agent for a fraction of the cost, but we also secure more sales than high street estate agents and achieve a higher asking price on sales.”1

Founder of Carphone Warehouse and Chairman of TalkTalk and Dixons Carphone, Sir Charles Dunstone, alongside his business partner, Roger Taylor, recently invested £5m into HouseSimple.

HouseSimple claims to achieve an average 99% of the asking price and an average selling time of 20 days.

1 http://www.propertyindustryeye.com/online-agent-changes-fee-structure-to-pay-as-you-go/