I read at the weekend that Tesco is going into the real estate market with a low cost service that aims to replace estate agents in the house selling process – turns out that this is not new news (this BBC article is dated May 17) – but if they can get it to work it is BIG news for the industry.
I posted a rant about the role of agents in the UK generally back in December – my general view is that they are a drag on innovation and I think that is particularly true in real estate. For that reason alone I welcome this move from Tescos.
On a personal level I’d love to avoid paying estate agents commissions and whilst that has always been possible up to now it has always been a bit risky and time consuming for me. This development might just change that.
I also like the disruptive nature of it, and the way, if successful, it will change the way houses are sold and marketed in the UK. In particular it will be good news for property mashups (Nestoria, Extate, OnOneMap and Zoomf) as sites like these stand a good chance of becoming the place that people go to manage their search for a new house. At the moment the role of estate agents makes that kind of difficult, but the more they are out of the loop the more you can control everything online.
There have been startups trying to get into this space for a while (e.g. PropertyBroker.co.uk), but none have made great headway. I have put this down to the stranglehold that agents have on the value chain – I guess the hope is that Tesco will have the muscle to break in and take a decent share of the market.
The Tesco service will have a flat fee of £50 and guide you through the sale process – measuring up your house, putting up for sale boards etc. etc.
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