Sarah Indranie, Director of Jason Dean talks about property portals, realism and swallowing pills

Everyone’s up in arms about the recent launch of On The Market (OTM) the new property portal – its rivals being Rightmove and Zoopla.

As Rightmove and Zoopla increase their fees (which they do regularly) we, as agents, are also forced to charge more in fees. OTM is owned by the agents and we have joined forces in an attempt to keep our advertising costs acceptable and, in turn, keeping our client fees acceptable, yes, really! Only independents with a shop front can join OTM. No big corporates or online agents.

90% of the agents that have joined OTM have dropped Zoopla advertising*, opting to stay with Rightmove as their chosen other. Whilst Zoopla does have visitors, agents are not receiving valuable leads from buyers or sellers, it’s evident, or we’d have stayed with them. And then there’s the other niggling issue of the valuation estimation tool. Whilst sellers like it, it has in fact, become more of a hindrance.

Take this example: Mr Smith uses the tool to find out what his house is worth, it gives him a figure of £450,000. He then calls four agents in to value and finds that only one of them suggests the price that matches his result from Zoopla. All the agents know he’s used the valuation tool but three of them provide him with more realistic figures.

Agent four knows that he will win Mr Smith’s business if he tells him that his property is worth £450k. He markets his property with that agent because he likes the sound of achieving £450k. Sadly it’s marketed for too much money and as a result he gets few or no viewings. His elation has now turned into disappointment. The agent discusses a price reduction which he’s not keen on. The house stays advertised at £450k.

After several weeks the agent approaches him again to discuss a reduction. He agrees to a small reduction and the property is marketed at £425,000. Its true value based on the interior and exterior (design, layout and condition) and comparable sold prices in the area is more in the region of £399,999.

What happens now is unfortunate for Mr Smith. Buyers are savvy and fully prepared to negotiate – they have watched the price fall and know it’s overpriced, plus it’s been on the market for a few months. Everything is on the buyers’ side. Viewings take place and they result in an offer of £375,000.

The agent will have to work hard to get that offer up to the £400k mark but it’s tricky and the final offer is £380,000. That’s a whopping £70k less than the seller expected. It’s a bitter pill to swallow. Have you ever been Mr Smith?

OTM is attracting buyers who want to be ahead of the game because agents are using the ‘early bird’ technique. New properties to the market are being uploaded by agents to OTM before being uploaded to any other portal – ultimately those looking on OTM first are seeing them before others get to see them.

I suppose in short, what I’m trying to say is, weigh up the advice given by agents and use online tools cautiously – digital tools cannot see inside and out of your property, plus the market changes and property conditions vary enormously. And don’t be worried that agents have left Zoopla, we have weighed up the pros and cons. My recommendations are to use land registry and net house prices for price ideas. These prices are actual sold prices and are only published once a property has completed.

For sale prices should not be relied upon nor should the highest price quoted by an agent. The highest price isn’t always the best price and no one wants a bitter pill.

*As stated by Ian Springett chief executive of OTM (and founder of Prime Location)