Filed under: Economics
The BBC recently ran a story on cutting out estate agents by using DIY house sale websites. How many house buyers still use the physical offices of the estate agents to go through books of details? I suspect that the majority of people who have enough cash to go buying a house are on-line. If I am selling my house though, can I afford to ignore those who are not online? The trade-off should be fairly simple in that I would lose some potential buyers but I would save the 1-2% fee. The other major change in the economics would be that I would lose the services of an experienced salesman but on the other hand I would not have the man in the middle pressuring me to take a sale that would suit him but may not give me a good price. The way that agents like to write their contracts is that they make a simple percentage of the sale price. This motivates them more to sell at any price rather than to hold out for a better price.
The private websites look good but do they attract the traffic of the majors? My suspicion is that until one of them stumps up for a major ad campaign and accepts ads for free then they won’t have enough stock to hold enough punters for repeat visits. If I haven’t seen a banner ad for The Little House Company or MouseSale then they may not be exposed enough to get to a tipping point. Until then I suspect that they will remain as obscure minority websites that tick over in a corner of the market.
At the same time, the major property websites in the UK seem to have moved against the DIY seller by refusing to accept private sales. It seems to me that this may not be in the public interest and that there is an opportunity for the Office of Fair Trading to stick its nose in.
