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Tesco is apparently planning to launch a fully fledged online estate agency after having its property exchange venture scuppered by regulators a fortnight ago.
A spokeswoman told The Times that the retailer was reviewing its options with a view to launching "a new and exciting online estate agency service”.
She added:
“This would enable us to offer our customers personal advice on the sale of their home.”
Tesco suspended its online property marketplace last month after being told by the Office of Fair Trading (OFT) that it was acting as an estate agent and should be subject to the same regulations.
Through tescopropertymarket, the retailer charged home-sellers a flat fee of £199 to display their homes on its site, as well as providing them with a ‘For Sale’ sign to put up outside their properties. Apparently, this qualified it for estate agent status, hence the advice from the OFT.
The decision will have boosted estate agents that sought to hamper the service - mirroring, in some ways, bookmakers’ complaints about betting exchange Betfair in its early days - and seems to show that Tesco underestimated their willingness to protect their own interests.
But it also highlights how estate agencies' roles are changing as more and more homebuyers turn to the web for research.
Roger Young, the OFT's head of Estate Agent Enforcement, told the BBC that the decision may also have implications for other online property ventures:
"If an internet property retailer does anything for their clients more than simply carry an advertisement, for example if their website has a messageboard for sellers to contact buyers, they will be doing estate agency work. It may well be that most internet property retailers are acting as estate agents."
By expanding the venture to offer advice to vendors, Tesco seems to think it will be fully equipped to compete with existing estate agencies. But the nub will be whether it manages to get its listings onto popular, agency-backed portals like Rightmove.
That, it seems, has proved the biggest barrier for web-based start-ups that are seeking to offer alternative services and challenge the traditional agency model.
But a spokesman for Tesco said talks had already begun:
"We need to take forward discussions now with the portals, but as an online estate agent that will be subjected to the full regulations under the 1979 act, we see no reason why we should not be listed on these portals."
Related stories:
Are estate agents doomed?
Tesco's online empire expands with clothing move
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I've received a letter from Miles Shipside from Rightmove telling all us agents they've refused Tesco entry to Rightmove. It goes on to say this may end up going legal but it's a price they're prepared to pay.
How worried are estate agents if they have to protect themselves to such an extent?
Most of them have ridiculed a supermarket to even consider selling homes alongside groceries, but that's not the point.
The point is estate agents have shot themselves in both feet with Rightmove as they've given away their most important asset; THE BUYER
Buyers don't browse estate agent windows anymore, they're at home or work looking at full colour details, floorplans, and location maps on Rightmove. Only when they've seen something they'd like more information on, do they surrface and make themselves known.
In essence the role of marketing has been handed to Rightmove and now every estate agent is now a negotiator.
Because of this we don't need expensive high street offices and local press advertising (the days of selling property from the local paper disappeared about 5 years ago, now it's used almost exclusively to appease unhappy vendors and gain instructions).
Estate agents' have to realise; unless they evolve they're going to be chewed up and spat out.
Please don't view this comment as a negative to estate agency as a business, it's more a wake up call for us all to change and change now.