Tesco backs cheap online estate agency

The supermarket group, Tesco, is set to back a cheap online estate agency service that is soon to be launched.

A new website, iSold.com, is being launched by the estate agency Spicerhaart, aimed at buyers and sellers in the Bristol area.

Tesco will advertise the services on its own website.

Steve Shore of iSold said that they would be offering full estate agency services without the need for High Street presence.

Recently the Office of Fair Trading (OFT) called for more innovative online estate agency services to help drive down estate agency prices.

Online Service

Both buyers and sellers will be able to conduct their transactions online or via the telephone.  Instead of paying standard estate agency fees of between 1.5% to 2% of the selling price, there will be a basic online service costing £999.

Homes for sale will not only be advertised on the iSold website but will also be advertised on sites such as Zoopla and Rightmove.

Although neither iSold nor Tesco would comment on the commercial agreement between them, Tesco did point out that it already had a similar link with Interflora, the flower selling service.

Tesco briefly had an online property selling business called Tesco Property Market, which in return for a standard £199 charge allowed sellers to by-pass estate agents.  Sellers were able to advertise their homes for sale and put up a Tesco notice board outside their homes. 

However, Tesco discovered that it could not make money if it had to comply with the estate agency and property mis-description laws as it was effectively deemed to be offering estate agency services.

After only four months the business was sold to Spicerhaart although Mr Shore said that this was a new business and had not simply been rebranded and relaunched.

The OFT, last month, called for more competition in the estate agency business in order to help consumers obtain better deals on fees which are typically 2% of the purchase price.

The government has also been called on by the OFT to change the law making it easier for people to set up online home selling services.  At the current time online only estate agents account for only 2% of property sales in the UK, this is compared to 15% in the USA. 

08 March 2010