The watchdog wants sellers to haggle hard with estate agents to win better value while senior officials also favour a switch to fixed fees.

A family selling a home for £400,000 could save more than £8,000 through the scheme compared to the normal commission based system.

The pre-launch website for iSold states: ‘In the last ten years a lot of things got easier, simpler and better value. But estate agents certainly haven’t … until now.’

It adds that it can offer all the expertise of estate agents but ‘without all the fees’.

‘We’re part of the UK’s largest independent estate agency group, working in association with Tesco, offering you our expertise to save thousands in fees.’

Tesco abandoned a similar internet estate agency business in 2007 after it found red-tape rules made it impossible.

The iSold website offers a fuller range of services, including a professional valuation. Properties will be advertised on leading home sale websites and in local papers.

The website gives some examples of the type of savings available for someone selling a home valued at £175,000 through to £400,000.

Currently an agent charging a 1.5per cent fee on a property selling for £175,000 would collect £3,084, which is some £2,085 than the iSold basic service.

The bill for an agent charging 2per cent on a £400,000 home would come to £9,400, which is £8,401 more than with iSold.

Chief executive of home buyers agency Buyers Edge, Tim Hammond, said: ‘An increasing number of people are now using the internet for all types of services, so I can see iSold appealing to the mass-market consumer as it takes the hassle out of selling your home, and is significantly cheaper than using a traditional estate agent.’

HOW iSOLD WORKS

The basic £999 package involves a visit from an estate agent valuer. He measures up and produces a set of property particulars, a floor plan and takes up to 15 ‘luxury’ photographs.

The property will then be listed via iSold on all the major internet estate agent websites. The seller also gets a For Sale board to put up.

iSold provides a negotiator who is the middle-man between the seller and potential buyers.

The negotiator, who is contacted by phone and email, will set up viewings and pass on any offers to the seller. The seller conducts the viewings.

A £1,199 package includes all of the above plus a premium website listing, which provides greater prominence, advertisements in local newspapers and virtual video tours of parts of the house to be posted on the web.

Also included is a 90 minute ‘open house’ event where buyers will be invited to tour the property.

The event will be advertised in the local newspaper, while the seller will get flags and posters to put up on the day. The seller will be expected to show buyers around themselves.

A customer paying £1,299 will get all of these services plus a member of the iSold team to host the open house event.