Online "agencies" conversion rate of sale to sold is dire according to analyst
As the online only estate agency business models used by such as Purple Bricks and Emoov face further critisism and an uncertain future, one analyst has shared his findings on the current and recent conversion rates of online ”agencies”.
Andrew Stanton, who worked in traditional agency for over 30 years, now runs a consultancy called Estate Agency Insights and Strategies.
He says that out of some 1.5m homes marketed in the past 12 months, only 100,000 were handled by online agencies. “Although the media loves to talk about cheap fees and online agents, in fact the general public are using the traditional approach” he adds.
Using Rightmove data from - Tuesday November 13 2018- he has also given a market snapshot of six major online brands (two under the ownership of Emoov). According to his calculations these are:
Doorsteps - 2,054 properties listed, 1,321 for sale, 733 under offer not exchanged, 28% conversion of listed to sold subject to contract.
Yopa - 5,501 properties listed, 3,539 for sale, 1,962 under offer not exchanged, 35% conversion rate.
Purplebricks - 37,531 properties listed, 21,142 for sale, 16,389 under offer, 43% conversion rate.
Emoov - 2,504 properties listed, 1,696 for sale, 808 under offer, 32% conversion rate.
Tepilo (owned by Emoov) - 1,740 properties listed, 1,162 for sale, 587 under offer, 33% conversion rate.
HouseSimple - 1,140 properties listed, 763 for sale, 341 under offer, 30% conversion rate.
Stanton says that most of the online agents charge either an up-front fee or a fee payable in a period of time, typically up to 10 months. “So at the conversion rate of ‘for sale to sold’ I think there are a lot of clients who have paid for a service 'getting sold' which they never achieve” he claims, this is an absolutely dire end service when the fee has already been paid, and with every big name online "agency" selling less than 50% of the properties listed it is incredibly damaging to the market and artificially slows the housing market down giving the impression of market difficulties which then affects property prices.
Stanton also queries the fundamentals of some agencies.
“The bottom line is always the bottom line, so for instance Doorsteps sell your home for £99. If you have 2,054 clients at £99 paid upfront that is £203,346 income, and that will not cover the costs of running that company - if it did they would not keep getting a new round of fundraising” he says.
Stanton previously ran his own agency and worked at Sequence and Blackhorse agencies before setting up Estate Agency Insights and Strategies, which assists agencies grow their business.