While almost every sector of the marketplace has been disrupted by the burgeoning digital space and its alternative offerings, ultimately consumers will decide what remains. In property quarters, the establishment of new, low-cost, strictly online agencies raises the question about the ongoing role and need for the traditional real estate agent.
Dr Andrew Golding, chief executive of the Pam Golding Property group, believes that the value proposition, even in its simplest form, that professional property negotiators bring to the transaction, make the notion of an online agency a misnomer.
“Currently, traditional agencies and agents add real value in many varied and different ways. Firstly, the purchase or sale of a property is around a six-month process and can be complex and uniquely nuanced given that it is usually the single biggest transaction in the life of the buyer or seller.
“Generally speaking the disposal of or purchase of this asset is usually not the client’s area of knowledge and expertise, so the need for credible, professional, expert advice is essential. From the first decision to sell, to the final transfer of the property, these transactions involve hundreds of small steps that include the requirement for expertise in a number of different disciplines from extreme area knowledge, accurate valuations, marketing, finance, legal and conveyancing, to name a few. The highly personal nature of the transaction and the varied complex components require a skilled negotiator who is able to take the emotion out of the transaction by impartially dealing with inevitable objections from both parties.”
According to Dr Golding, time will tell whether the market will adopt a low-cost, non-agent, tech-driven model or not. He says that because of the relative infancy of these business models which rely on volume and scale for profitability and ultimate success, their long-term sustainability is yet to be proven.
“It’s also important to note that there is no clear definition that describes the difference between the online model and traditional agents. All so-called traditional agencies make extensive use of the digital environment and technological advances.
The central premise of the so-called ‘online agency’ is that they either purport to be able to automate a number of processes in the real estate transaction through technology or they assume that the consumer – which may be the buyer or seller – is willing, competent and able to expedite a number of processes which traditionally are the responsibility of the agent.”
Dr Golding concludes; “Fundamentally however, the difference between these two models is about the commission rate they charge and the service they offer. This aspect is not a new phenomenon as so-called low-cost agencies, defined as those who offer their services at a discount to other competitors, have always been a reality in our market. Consumers will need to carefully stack up the service offering and potential hidden costs of the two.”
Posted by Niki Jackson