An online agent that failed to get funding from the Dragons’ Den is now under new ownership and pitching itself as the UK’s first “no-fee” agent.
Its business model is to make its money from referral fees, meaning that to get a free service, sellers must use specific conveyancing and mortgage services.
House Tree, launched by Tom Harrington, tried to get funding from entrepreneurs on the BBC show in 2014 as the first pay-per viewing agent, charging £99 as an initial up-front fee, and then £35 per viewing for 12 viewings, after which viewings were free.
His pitch was rejected, with Dragon Peter Jones telling Harrington, then 24, that his business was destined for failure.
Harrington sold House Tree to entrepreneur Alan Simpson in October for an undisclosed sum.
Simpson has been involved in other property business such as quick sale firm Flying Homes.
He has now rebranded House Tree as a “no fee” agent. But is there a catch?
It is only potentially “no fee” at the end of the process with a refund of all or part of the money paid up-front.
The ‘free’ service would also only be available to a seller who is making an onward purchase and it would not be “free” to sellers making onward cash purchases, or who choose different conveyancers.
However, the vendor will get a full refund as long as they use all three services – House Tree’s stipulated conveyancer for both their sale and onward purchase, and also mortgage broker.
The process starts with the vendor taking out a ten-month interest free loan of £996 from provider Divido, or paying this amount by credit card.
This is paid to House Tree and is said to be the same amount the agent earns in referral fees from the conveyancing provider and mortgage broker.
A vendor would enter their property details on the House Tree website or can speak to an agent on the phone. They are then taken to a page where they are given the option to use House Tree’s mortgage broker and solicitor.
Technically the three services cost £332 each, with conveyancing through Convey Law for the sale and purchase and mortgages through brokerage Meridian Mortgages.
Customers don’t have to use every service, but not using one of them would mean the seller having to pay £332 to House Tree.
Once the transaction completes, and assuming the seller has used the stipulated providers, the referral fees are then used to pay back the vendor.
Sellers can also choose to pay £90 for professional photos, £395 for accompanied views, £95 for an energy performance certificate and £50 for floor plans.
If the home fails to sell during ten months of the interest-free loan, the vendor would need to repay it.
If vendors pull out of the sale they would still be liable for the loan.
Properties are listed on Rightmove and Zoopla, and House Tree helps arrange viewings and with sales progression.
House Tree does cover sellers for up to £720 of legal, estate agency and other fees, should anything go wrong with their onward purchase.
The agency has offices in London and Barnsley with 12 staff, split between agents and negotiators. Most valuations are done using Rightmove but staff can also visit homes to do a more detailed assessment.
Simpson said: “All agents, whether high street or online, will be getting these referral fees, so we are being more transparent about it.
“We hope that launching this industry-leading initiative will help home owners across the country get moving for less and set a precedent for more transparency across the industry.”
Yesterday, House Tree had 26 available sales properties listed on Rightmove.
Online ‘pay per view’ agent fails to close a deal on Dragons’ Den
“Most valuations are done using Rightmove but staff can also visit homes to do a more detailed assessment.”
One word – Hilarious!
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Congratulations… you have won the race to the bottom! 🙂
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If an estate agent does not align with quality conveyancers, it tarnishes their business.
We see estate agents using the wrong conveyancers all the time….conveyancers who have to pay high referral fees as they cannot otherwise attract customers.
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It IS a bit shocking to learn that nearly £1000 is being earned in back handers. Shame on any conveyancer ( especially those claiming to represent lawyer’s interests by being members of the Conveyancing Association) for helping perpetuate this consumer rip-off.
Since when did it become acceptable to pay £1000 referral fees ?
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I like the idea, but it’s too much hard work for the consumer. They just want things done and sorted within a few clicks. This is just too over complicated, and I would imagine that will scare them away. It’s only free IF! Nobody like an IF after the word FREE right?
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“All agents, whether high street or online, will be getting these referral fees, “. Really?
I hate ALL sweeping statements
Many agents have reciprocal arrangements in respect of recommendation which don’t always involve money. I used to recommend a local law firm because they were good. I didn’t receive any money – rather recommendations, probate sales, and the odd lunch. Rather than seek a ‘commission’ I would ask the lawyer to inform the client when reporting on title that unlike many agents, we didn’t take a commission and as such he would discount their fee by £x as they had been referred by us. Really great PR worth more than a couple of hundred quid.
In respect of mortgages, it’s not necessarily a referral fee, rather a share of the commission a broker would have earned from that client anyway.
Good luck in proving Peter Jones wrong. Trunkies did.
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“Many agents have reciprocal arrangements in respect of recommendation which don’t always involve money.”
AMEN to that, Mr W!
You were obviously lucky – I don’t even get bl00dy fed for recommending the best person for the job to my clients!
(not that you’d know from my waistline…)
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So the ‘no fee’ agent actually charges £996 plus any extras in the likely event that they do not sell the property and the customer wants nothing more to do with this company?
Is that the no sale, huge fee option?
Have national trading standards just warned agents about such tactics?
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Morecombe and Wise couldn’t have come up with anything funnier – Thank you House Tree, best laugh I’ve had for weeks!
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£99 what a rip off!
Today i am starting “Cheap Move”
£25.00 – VAT FREE (Turn over is so low!)
I am so cheap i can call myself a disruptor! #PropTech
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Seriously Mr Simpson, what happened to providing your clients with best advice? How do you advise your clients how to present their home to the market? Does their property have the possibility of a potensial building plot? When is the best time to market their property?
No doubt you will be launching a novel soon to accompany your deluded enterprise “How to sell your home for nothing and achieve the best possible price” maybe reconsider the title and use “The Emperors New Clothes” when you think that our industry cannot be dragged any lower!
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must be magic.
don’t worry what’s in my left hand cos I ain’t showing you that hand, just look at my right hand, see nothing in it.
Now in my left hand………….!
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Next week we will sell your house for nothing and give you £1000
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PB Already do 😉
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Don’t be so quick to mock, this chap is trading on agent’s complacent attitude towards the data they share with the advertising sites and service providers who very kindly pass on the most value barrier to entry, advice on value, to every; FSBO, PI and ‘full service, expert, guru, whack it on the web, list & leave it, internet listing rep/neg’.
Without the data some agents’ have warranted they have sought permission to share every photo, description and property spec is being shared about like favours on a hen or stag do.
If agents clamp down on 3rd party #datarustling firms like this simply won’t be able to comply with their redress scheme’s code of conduct or their contractual duties of care and skill. No redress? no trade!
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Yeah, yeah, yeah, I know my head’s gone, but welcome to my summer 17 hashtag. #datarustling; the accidental [didn’t read the service agreement] authorised harvesting and sharing of agents’ live & dead file data by some service suppliers.
NB this possibly already breaches existing ICO regulation and for certain will put agents on the wrong side of the tightened regulations. If agents are not telling applicants , vendors, landlords contractors solicitors their data is being shared with 3rd parties it is the agent in the wrong not the service supplier.
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Free!
Credit to this amusingly optimistic lad for having a pop but hasn’t he got a close freind who can sit him down over a pint and tell him not to waste his money?
Anyway, are people still doing this online thing? I thought various ‘disruptors’ had filled this little corner of the market, PB top the charts with an astonishing ability to raise and spend money but not make any, the sheep bloke just seemed bonkers and smug at the same time (rare skill) before he cashed in and wisely did a bunk, Tepilo cornered the celebrity angle, easyproperty did the ‘known brand’ thing and god love him Quirk took the gob on a stick / mildly angry man role while Countrywide have done that thing they’ve done with the upfront offer that might be the thing that busts them……oh and Hatched who in fairness under Adam Day took the job of ‘thoroughly decent chap’ of the budget world
Anyway the world has been blessed with a varied and diverse range of budget offerings all with one thing in common, none of them make money so proptech people or whatever you call your selves stop the silliness, this budget thing is just a massive willy wafting game and the Bruce Bros have cash flying out with every waft.
Jonnie
P.s – YOPA weren’t listed above because they have absolutely nothing interesting about them apart from being completely un interesting.
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PMSL! Love it!!
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Convey Law…!
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The public will begin, and they are in some places, to realise a free lunch is anything but a free lunch.Agents put on your boxing gloves and fight back with the added value and service, local experience etc you bring to the table. Oh and remember to tell client that you only charge when they get the result that you, Mr and Mrs Client,wanted . Other cheap firms just keep charging up front and if they don’t sell then …………………..but you Mr ans Mrs Client still paid.
With so many cheap/free/ etc listing portals entereing the market they will begin to eat each other and the good proper agents will succeed leaving those portals to feed on the scraps.
I wonder how you value a property via rightmove for sale purposes without viewing and making an inspection? I wonder what their PI insurers would think??
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Ros help! A strange man in the pub is trying to sell me an ATM hacking thingie!
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Far too complicated a proposal. Won’t work
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