Tesco is reported to be moving into property, with plans to undercut estate agents by selling homes through the net for a flat fee of as little as £50. But how easy is it to sell your own home?
By Jonathan Duffy
BBC News Magazine
In its quest to become the ultimate retailer, Tesco has no shortage of ambition. In recent years the one-time neighbourhood grocer has branched out into selling clothes, consumer electronics, holidays, financial and legal services - even music downloads.
Now it's been reported the company, which last year became the first British retailer to break the £2bn profit barrier, is planning to muscle in on the property business.
A report in the Grocer, a trade magazine, says the supermarket is looking to set up a website where homeowners could shift their house for a fraction of the price charged by estate agents.
Instead of the commission charged by estate agents, which is traditionally 1% or 2% of the house price, sellers would pay a flat fee of just £50.
Although Tesco would not confirm the reports, the plan is not as radical as it might sound to some ears, reflecting a small but growing tend for homeowners to sidestep the traditional routes to moving house.
Reports such as one last week by the consumer watchdog Which? and one last year by the Office of Fair Trading only deepen the public's suspicion of estate agency practices. Which? found agents' valuations of flats and houses were a lottery, with some overvaluing to get customers on their books and others undervaluing for a quick sale.
As with many ways of life, though, the internet is beginning to shake things up, putting more power into the hands of individuals.
For six years PropertyBroker.co.uk has been gnawing away at estate agents' hold in the lucrative London market. For £137, it will send a photographer to take pictures of your property and erect a "For Sale" board outside.
Keith Davis, the site's co-founder, says it is happy to advise on a valuation, before the details go up on the Property Broker website. From then on it's up to the vendor to field calls from prospective buyers, arrange viewings and, hopefully, steer things through to an eventual sale.
The site sells £70m to £80m of property a month, says Mr Davis, including, recently, a £1.2m house in Islington.
George Haigh recently completed on the sale of his two-bedroom flat in East Sheen, London, after it was advertised on the site.
"Estate agents have a perceived ability to hold together a chain but I was moving in with my girlfriend, so I didn't have to bother about that," says the 32-year-old business development manager.
GEORGE HAIGH'S TIPS
Have as much paperwork, eg Land Registry details, to hand. It saves time.
Screen inquiries rigorously to weed out time-wasters
Keep all correspondence to reassure your buyer - buyers are naturally suspicious of people bypassing estate agents
He also felt there were particulars about the flat that he was better qualified to talk about to a potential buyer than an estate agent.
Mr Haigh also tried a more traditional method - advertising his property in local newsagents' windows. That yielded more inquiries than the website, although it also brought more time wasters.
An important lesson was to sift the "tyre kickers" from more serious inquirers, over the phone - something that a good estate agent would otherwise be expected to do. When he did find a buyer, it was again up to him to handle the procedural calls that an estate agent might take on.
Around the country, there are dozens of similar businesses rivalling the old order, such as The Little House Company and HouseWeb.co.uk, although few are dominant in any area. One of the newest is HouseNetwork.co.uk, which has national reach and advertises properties through the leading RightMove.co.uk website.
Graham Lock set up the business after working as an estate agent himself in Essex, where he witnessed some bad practices.
"Each agent gets a target of 10 to 15 viewings a day. So they find people who aren't suited to buy that property - maybe only two people that day would be suitable buyers."
Importantly, though, the company is not a private home selling firm. It remains an estate agent and complies with the Property Misdescriptions Act and the Estate Agency Act.
However, critics say there are risks to this sort of stripped-down approach. The National Association of Estate Agents sees "security and safety implications", saying that buyers in private sales have not been checked out by an estate agent.
George Haigh agrees, saying he felt confident arranging private viewings of his flat only because he's a man.
The association also suggests that most people are not experienced negotiators and so could undersell their home. But here, too, the
internet is shaking things up, with several new sites offering Land Registry price data. It means people can instantly find out how much their neighbours sold up for, helping them set a realistic price for their home.
Be prepared to conduct your own viewings
And for those who want to drive bidding up rather than down, there's always eBay, and other auction websites. Trusting your most prized possession to an auction website which begun as a trading place for soft toys might sound odd, and it is.
It is, nevertheless, one of the most viewed shop windows on the net and a handful of sellers will try anything.
Some, like Christine Lloyd-Knight, who has her three-bedroom converted school house on the site, are anxious to sell after a fruitless year with a local estate agent.
Others, like Steve Churton, who has just put his four-bedroom Nottinghamshire country pile on the market, think they might reach an overseas market.
"I sold a £6,000 car on eBay so thought it was worth a go. You suddenly have global reach and at £40 for 10 days on the site it's a low-risk way which could pay dividends."
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I think this is the start of something great for the property market. Having just bought my first house with my partner I realise now just how corrupt and dishonest estate agents are. We were charged £200 for "advice" which to be honest I could have read up on the internet. Good on anything that makes things cheaper and gives more power to the people.
Mark , Glasgow, UK
Why pay anything at all to sell or advertise your house?
There are plenty of property web sites that offer free advertising and charge no commission. I helped my father sell his property on easier.co.uk just before Christmas and we saved around £6,000 in estate agent commissions. The site was free to advertise on.
Jon Southall, United Kingdom
I wish the public all the luck in the world, I was an estate agent for seven years and people always think it is money for old rope. When individuals have to chase their solicitors and deal with dodgy offers from people who have also offered on other properties just to hedge their bets. That of course does not cover the 33% national fall through level, which means they only have a one in three chance of selling. Without the experience of years of dealing with the pitfalls of the market that percentage is bound to rise.Lost fees,Lost time, Lost money, Lost the house you had your heart set on?
I must ask the question of if £50 pounds sounds so inviting.
I moved home last year, and enlisted the help of a well known Estate Agency. I ended up selling the house myself, doing all of the running around myself, speaking to solicitors, and others in the chain to try to get things sorted. What did the estate agents do? They gave me duff information on the day we were supposed to be exchanging contracts - 'Oh yes, I've called everyone in the chain, and everyone's ready to exchange' - and 20 minutes later from my solicitor, I got 'so and so at the beginning of the chain hasn't signed their contract, and so and so in the middle of the chain hasn't got their mortgage offer yet'. And to top it off, the estate agents tried to bill me for £200 more than the contract stated. Needless to say, I didn't pay them!!
My wife and I sold our first home in 1988 by putting a sign in the garden. Three viewings in the first week and sold within 10 days for the asking price. We were a bit lucky in that the main spine road for the estate was close by and was quite busy. Would do this again.
John Dickinson, Wales
It's nice to see this trend getting some publicity. We gave up on our estate agent after 3 months of neglect, frustration and one totally nutty buyer. We then sold within 1 week using an internet service - cost £100 instead of £2000. More people should try it!
Paul Hinder, UK
We have our house on with agents and on a www site. We have had more viewers - and a higher proprotion of likely purchasers - through the www. It does make us wonder how the agents justify their fees (some 4000 in our caase if they are lucky enough to find the eventual buyer).
Andrew Scott, UK
I bought my house without an estate agent, it was very simple to do. I just kept in touch with the seller, the solicitors handled all the legal side. It saved us both a lot of money and I just can't see what extra the estate agent would have added.
Simon Greenaway, UK
We used the Little House Company website to sell our house. We got three valuations from local estate agents (which varied wildly, needless to say) and put it on the market towards the middle of the figures, and sold it for a fraction under that. We were delighted to save at least £3k on estate agent's fees. It is worth getting a "for sale" sign as well as using the website - about half our enquiries resulted from people seeing the sign.
Andy Moorhouse, England
We sold our house a few years ago by putting a card on a noticeboard at work, and sold it to a colleague's relative, with no problems. Because there was already a relationship (albeit tenuous) this inspired confidence and trust. Would work well if you work for a large organisation (and via internal e-mail/message boards these days too).
We recently wanted to sell our house in a small northamptonshire village. Instead of instructing an agent, we had the house valued and then put the word around in the local pub that we were thinking of selling. Within 2 days we had a phone call from a local couple who agreed immediately to our asking price. We move out next week!
I have recently sold a house through an estate agent and although they were polite and trustworthy, I cannot understand where they bring value. You do many viewings yourself, you instruct your own solicitors and the estate agents only contact you when they get nervous about their impending commission. Tesco cannot do this quickly enough in my opinion. With stamp duty so high, the opportunity to reduce selling fees down to £50 is amazing.
My wife and I sold our last house privately using The Little House Company and would certainly recommend it. The whole process was so very simple. I would say that I think it is important to get some good photos (internal and external), and it is worth taking time to prepare some decent looking accurate details sheets to hand to people at viewings. I'd also advise going for a package that includes listing your property on all the major independent property websites - so your property appears alongside all the others being sold through conventional estate agents.
Could I put my house on an internet sale if I have already appointed an estate agent?
You have a photo with the caption "Be prepared to conduct your own viewings". That's the norm with my experience of estate agents. I have only ever been shown round by an estate agent when the house was vacant. All other viewings have been conducted by the homeowner. Is this a north/south difference?
Ian Fitter, UK
Sold my last house & my mother in laws without using an agent. Looked at similar houses in the area and also got valuations, bought a "for sale" sign from a signmakers for £10 plus £2.50 for the wooden post and both properties sold within 4 to 6 weeks. Total cost of £25 to sell two properties for a total of £180,000.
Russell O'Brien, England
I recently purchased directly from an owner and found it much easier to deal directly than through an estate agent. Not only is there the obvious cost-saving, but also a greater degree of trust. The best service that estate agents provide is publicising what properties are for sale, but we even bypassed that bit by dropping leaflets to houses in the area that we were interested in. I know other people who have done things this way successfully. Estate Agents need to raise their game!
Simon Pyne, UK
I recently sold my house in Warwickshire. I used a popular private internet company, but also used a local estate agent in parallel. The estate agent was able to generate far more interest, and in the end this resulted in a sale at the asking price. By using both sales platforms I was able to force the estate agent to lower their commission rates, and they worked harder to market my property.
James McCormack, UK
Go for it, here in the Netherlands a lot of people have turned to this method of buying/selling their homes - here a buyer has to pay all the expenses of the purchase, including those of the seller, so buying without an agent, especially a property also without an agent, can save a big amount, typically 3-4% of the costs.
Jennifer, Netherlands, ex-UK
Another successful Internet company is netmovers.net
alfred bird, england
Estate agents do the same amount of work as ten years ago to sell a house but now get paid three times as much thanks to the market boom. I cant see how they can justify their fees, especially for places that sell quickly.
David Williams, England
I sold my house in the local paper rather than through an estate agent. The paper also publishes their adds on the internet. Total cost? £100, as opposed to £6,000 wanted by the agent.
Harish Hirani, Edgware, Middlesex
Since when do Estate Agents deal with all viewings for the vendor? I've only ever come accross Estate Agents showing a vacant property, never one that is occupied.
Self selling is a great idea, it's about time the shroud of mystery was removed from the whole process.
I used to work for the conveyancing dept of a small solicitors firm in S E london. Estate Agents at the time would charge around 1% (and in some cases 2%) for, effectively, taking a photo, putting a "For Sale" up and then, not having a clue how the legal process works, harrassing Solicitors to speed things up. More often than not they would play Purchasers, Vendors and their solicitors, off against each other. The solicitors firms in the area were having to vie for business and were charging less than half a percent for their fees. A fee which was begrudged by a client who would happily pay an estate agent double the price for doing nothing other than pester people on the phone all day. I will not be sad to see them fade away in favour of a DIY approach.
Worth remembering that it's unusual to use an Estate Agent to sell a house up here in Scotland. In fact if anyone helps you sell your house, it's usually your solicitor. I have sold 4 houses and never used an Estate Agent.
Gill Grant, Scotland
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