Homeowner hopes to save £263,000 by selling house online
A businessman says he's saving more than a quarter of a million pounds by selling his £15.5 million Knightsbridge home online, rather than through an estate agent.
The owner - the founder of a pharmaceutical company who prefers not to be named - says that agents wanted to charge as much as £264,000 to handle the sale.
"What struck me during the process of appointing an agent was the work involved to sell my house seemed disproportionate," he told Prime Resi magazine.
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"How can it be that selling a £15.5 million property should cost 15.5 times more than selling a £1 million property, when the agent's workload is virtually identical? When we raised the issue with agents, there seemed to be very little wiggle room on the 1.2 to 1.7 per cent commission."
Instead, he approached Sellmyhome.co.uk, which charged him less than £1,000 for essentially the same service as a high street agent. Properties are listed on the major online portals, and vendors can manage viewings, feedback and offers using a phone app.
While using an online agent means that a vendor will miss out on "drop-in trade", research shows more than 90% of buyers look for a new property online.
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Online agents have tended to be popular at the lower end of the market, where vendors may be more concerned about counting the pennies. But because agents charge on a percentage basis, it's the owners of more expensive properties that will see the biggest savings.
On average estate agents charge 1.5% of the sale price - plus VAT. Back when homes were more affordable, this represented reasonable value for money. According to the National Private House Sales Association, the the average sold price was just £68,713 in 1995. Now, though, it's ten times the average salary at around £250,000 - meaning that the vendor will have to pay £4,500 to the agent.
Online agents, on the other hand, tend to charge a flat fee of between £500 and £1,000. Fees are usually up-front, and vendors are free to use other agencies at the same time.
While private vendors going it alone can't place listings on the major property websites such as Rightmove, Zoopla and PrimeLocation, online agents can. They will also provide professional photographs, floorplans and Energy Performance Certificate (EPC).
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"We hope to avoid not only the exhausting politics and emotional freight of managing a traditional agent, but also to avoid what is clearly a dated commission structure which does not encourage service or performance," says the vendor. "Indeed, thus far we have found the approach, support and advice of Sellmyhome.co.uk to be at least at the same level as that of traditional agents. It makes one wonder."
The Hans Place, Knightsbridge house is the most expensive ever to be sold by an online agent. Dating back to 1792, the six-storey house has five bedrooms, five receptions and a staff flat, along with a wine cellar and gym on the lower floor. There's also a large garage. Interested buyers can book viewings - and make an offer - via the website.
Read more about estate agents on AOL Money:
What estate agents say Vs what they mean
Estate agent caught stealing chocolate
Estate agents forced to come clean
