That profit was an adjusted EBITDA figure – before tax and after costs, depreciation, amortisation, net finance costs and share-based payment charges – of £0.3m on revenue of £18.3m. In the previous six months, it made losses of £6m.
The potentially disruptive new wave of online estate agents is shaking the sector and could grab a bigger share of the U.K. market: let’s discover why are they being chosen by clients and as a career by some estate agents.
Real estate agent concerns are focused on the fact that online estate agents taking off in the U.K., like eMoov, HouseSimple, Purplebricks and Tepilo typically charge lower fees for selling a home, as their more centralised and streamlined systems – not to mention a lack of retail outlets – enables them to cut costs. Yopa (Your Online Property Agent) promises to sell your house fast and charge you nothing upfront.
In the U.K., instead, a traditional real estate agent traditionally charges two percent of the sale price: they may charge £4,500 + tax to sell a property, whereas an online real estate agent might charge an upfront fee of around £300 plus tax.
Rebecca Peach, the CEO and founder of U.K online real estate agent I Am the Agent, declared that online agencies were growing 3.75 times quicker than traditional real estate agents, in terms of the amount of housing stock coming onto the market. Peach also predicted that online agencies would grab a 50 percent share of total inventories by 2020.
This view is shared by the people behind rival agency eMoov, who point towards similar growth in the online insurance, gaming, video streaming and that the changes in the property market are no different to what happened when grocery sales moved online, or just as Airbnb had shaken up the world of travel.
Real estate agents’ have a unique understanding of what buyers’ value in their local markets. Their real insights and local market knowledge and ability to help consumers navigate each step of the transaction are extremely difficult to imitate in an online-only model.
Buying a home is one of biggest – if not the biggest – financial decisions someone can make in their life, so it isn’t taken lightly and is far more complex than clicking buy on a website, like you’d do when purchasing an airline ticket.
This is why UK online real estate agents’ businesses include local experts: for example, in December 2016, Purplebricks announced that it had 340 local property experts, having recruited 124 in the six month period.
Some local property experts choose to move from the high street to online estate agents as they notice the way in which people contact agents more online instead of coming into branches. They claim they earn more in online estate agencies and that working on your own can give a much better work/life balance, because you can pick and choose when you work, also according to when most of your customers are available, being overall much more flexible than the 8 am to 7 pm, Monday to Saturday you get on the high street.
Still, local property experts of online estate agents generally aren’t employed, but under a self-employed more flexible arrangement, as a part of the completely new and different approach to estate agency: a mix of personal service and technology.
In the end, the estate agents who choose this shift think that, if all else fails, they can always go back to the high street should they need to.