It's finally happened – and it may just be a transfor-mational moment for the residential property industry. This is because Google has launched a UK version of its property search tool that allows sellers – estate agents, developers or individual vendors alike – to upload property details free of charge. When a user clicks on a Google map of an area, they can see any home on sale at that location and then just click for additional details.

The UK is just one country, but what happens there often leads to comparable trends across the rest of the Western world too; and the effect of the new service will be seen in three key ways.

Firstly it will directly challenge the existing portals that charge estate agents to advertise their portfolios. In the UK, these are Rightmove and Primelocation, which say they will not upload their properties to Google and will continue to charge agents.

Rightmove, set up in 2000 and floated in 2006, has 90 per cent of estate agents on its site, but it has been heavily criticised for its charging £300 (Dh1,640) to £400 per month to advertise an agent's stock, and for excluding 'For Sale By Owner' (FSBO) properties.

Meanwhile, Primelocation, set up by a consortium of 200 agencies in 2001 but now owned by the Daily Mail's Digital Property Group, lists up to 650,000 homes plus 100,000 others from 60 overseas. It has been criticised for allegedly cherry-picking the properties it will include and again for excluding FSBO homes.

A second effect of the Google service will be to encourage dramatic variations on the traditional estate agency business model, ranging from the use of physical branches to the fees charged to vendors.

"The pace of change will ramp up in the acceptance of online agents, who are generally the pioneers of the fixed fee model," explains Martin Smith, who runs UK estate agency software firm PropertyADD and is an expert on industry trends.

He says Google means agencies with new business models such as Hunters (mixing 15 traditional branches and 12 home-based 'personal agents') and HomeXperts (running a franchised personal agent business) will receive a morale boost, and may indirectly push traditional agents into reconsidering fee levels and ways of working.

The Centre for Economic and Business Research says 15,000 UK estate agents have changed jobs since 2007 – because of closures, redundancies or voluntarily moving to other work – and many of those that remain have sharply reduced trading volumes. There is no industry-wide information about fee levels, but agents who remain in business are scrambling for share and it is highly likely they are using commission reductions to win instructions. After all, residential sales in early 2010 were between 55,000 and 75,000 per month; compare that with the figures in early to mid-2004 when there were a peak of 170,000 sales per month according to UK Government data collated by www.houseprices.uk.net.

Current 'personal agent' businesses typically charge 0.5 per cent to one per cent commission while online-only agencies often have fixed fees to sellers of £50 to £300 depending on the scale of service being offered. More traditional high street offices normally charge from one per cent to 2.25 per cent commission for the bulk of 'average priced' homes while top-end agents selling homes over £500,000 sometimes charge 2.5 per cent or even three per cent.

The third likely effect of the Google initiative is that the FSBO principle will, for the first time, be able to market on a level playing field with the professional agents.

In the US – where many local online 'Multiple Listings Service' schemes list all homes on sale, like Google, irrespective of whether they are using an agent or not – up to 15 per cent of all homes are designated as FSBO private transactions. Until recently in the UK, just a few hundred homes have been sold this way each year.

But Tepilo, a site run since mid-2009 by TV property developer Sarah Beeny, has been more successful than most UK FSBO operations. It says that as at mid-June it had 7,988 homes on its site and had directly sold 1,118 homes this year. Now it is putting its property listings on Google in a bid to make further inroads on traditional agency.

Research by the Office of Fair Trading says in 2009 some 27 per cent of sellers who hired traditional estate agents at least considered using an online agent instead. Now the OFT wants to see more online business models challenging the sales establishment – and Google could just be the tool to encourage such a challenge.

- The writer is property correspondent of The Observer. The views expressed are his own