The market share of online agents is at just 6% for now, but this is expected to grow significantly over the coming years as more and more businesses look to innovate towards lower cost online models.
The online model has seen much success in the UK estate agency industry, far more so than in other countries. But this is less because of what they do offer and more because of what high street agents don't offer.
The key aspect to remember with online agents, is that their business model is not geared toward selling real estate. It is geared toward winning property instructions. Their fees are payable on instruction and therefore any work that is done after that point is, financially, an inconvenience.
The practice of typical high street estate agency has many flaws in this country. The industry has become so fragmented that it has become impossible for a client to have faith and trust in one agent. There is no requirement for any agent to become a general expert of an entire market because agents are defined, labelled and categorised to single specific roles. There are no start-to-finish agents and for a customer, this is incredibly frustrating. Customers want to be able to build a relationship with an individual and create trust and confidence. There seems to be a completely backward practice in this country whereby an agent that wins an instruction doesn't seem to have full accountability and responsibility for the sale of that instruction. Anyone in the company is able to take a prospective buyer through the door and on countless occasions you get the immediate feeling that the agent is only there to unlock that door. The commission structure for individual agents in this country is very different to the structure in high performance and high service global real estate markets. In high performing markets, individual agents are driven by their sales and generally paid approx. 50% of the commission for each deal. This means that an agent will fight tooth and nail to get you as a client, keep you as a client and sell / find your property. This structure completely removes the ceiling of what an individual agent can earn and motivates them to love and be great at their work. In this country, some agencies even split their commission pots "fairly" so no matter how bad a service you provided, you're still entitled to a piece of the pie, though a very small piece of a very small pie. As a seller, surely, you'd like to know that the person selling your property is financially incentivised to do so, rather than someone who will get their same salary regardless if they sell it or not.
At NEXA, we offer a hybrid to the high street vs online debate and our offer is more inline with international standards whereby you only ever deal with your single, trusted client manager. Your client manager is properly financially incentivised and rewarded for your success, and you take comfort in knowing your client manager is solely responsible and accountable for your property and the sale or letting of it.
