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Online estate agents are failing

Journalist: Jake Carter, Mortgage Introducer

ended 13. March 2023

Purplebricks is an example of an online estate agent that has fallen from grace, with its shares once worth 500p each, now having fallen to 10p per share. 

Does this suggest that model was a fade? 

Are people returning to face-to-face advice?

Has there been a lack of innovation within this space?

What could online estate agents do to hold more market share?

Is there a lack of demand for online estate agents?

4 responses from the Newspage community

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Samuel Mather-Holgate
Independent Financial Adviser at Mather and Murray Financial
Your home is, most likely, your biggest asset and when completing a transaction on it you want to be able to rely on and trust the agent who will sell it for you. This is why big high street brands tend to dominate the space. Home sellers want to know there is an office to demand accountability and big brands convey a sense of trust. It is always going to be difficult for another player to enter the game, and especially an online brand.
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Kylie-Ann Gatecliffe
Director at KAG Financial
I do believe initially purple bricks were the trend setters in a model that we hadn't seen previously for estate agents - however they quickly became tarnished by call centre type service levels - which many clients just aren't prepared to settle for when it comes to one of the most stressful transactions they will complete in life. I think high street and online agents can both do well - especially in a time when people want choice. The biggest factor when it comes to either of their success is them being able to deliver fantastic service, both upfront and as part of the aftercare. This is the one thing all the agents in our area that are successful, and have lasted the test of time get right.
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David Conway
Director at Clayhall Financial Services Ltd
Stack em high and sell em cheap is a model that works when you can 'stack em' but when your stock depletes and the flow of business stalls, you can't 'sell em cheap' any more. Face to face agents arent necessarily being preferred over online agents when the majority of properties are still sold through portal adverts however, home buyers and sellers need a good quality intermediary to keep the transaction moving. I'm sure both sides prefer a knowledgable person to speak to than an agents portal chat when things start to get a bit hairy. Moving home is one of life's major events and the level of work involved to make it a reality has perhaps been watered down with the number of buyers in recent years so now buyers, agents, and sellers need to consider whether 'cheap' is a false economy.
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Graham Cox
Director at Bridging Hub
The pay up front and we'll sell your home model seems deeply flawed. There's no motivation for the online agent to sell your home once they've got your money.

That said, many bricks and mortar estate agents leave a lot to be desired. Unscrupulous and illegal tactics such as advising clients they can't present their offer unless they use the EA's in-house mortgage advisor being a particular bone of contention. But a lot of the cowboys will be found out in this market, as they'll continue to value properties unrealistically to win the business.