Adventures & observations in the real estate technology landscape #2
Rough week with some tight deadlines for the team at Entegral. We are getting ready to launch 2 major upgrades to our core products.
- Are estate agents’ days numbered?, asks this M&G article, and compares South African estate agent fees with other countries. In the middle is the US, where sales are done mostly through MLS’s and the buyer and seller is each represented with its own agent. (I like this model as you get an agent who represents your best interests, and not just one agent as in South Africa). Is there a future for MLS in South Africa?
- Who owns the client? Agents are the primary contact with buyers and sellers. Without them, an estate agency has little value. And without them, a national group has even less value. Sure the details of clients are captured by the agency for further correspondence. The problem is, that most people value the personal connection with an agent more than the brand itself. A good brand gives the assurance that you are dealing with a reputable agent and that there are structures in place to make buying or selling as easy as possible. If a good agent jumps ship, he will probably take a string of loyal buyers & sellers with him. There is no replacement for good service. A good agent is therefor worth gold to a company. The client is not ‘owned’ by the agency, nor the national franchise. It is the agent who holds the power and has the ability to nurture that relationship going forward. As an estate agent, you are your own brand. It is therefor critical for estate agencies, to provide value to their agents and give them a support structure they love. As principal, you work for your agents, not the other way round.
- Speaking of ownership, who owns your real estate domain name? We’ve had recent cases where service providers try to hold domains from agencies (who wish to move to us) ransom by registering it in their own names. Bad, bad practice. It also goes against the .co.za polices. Check if your real estate domain is registered in your name here, for .co.za domains visit this link. What is the risk? Well apart from causing frustration and possibly disruption in services (website/systems) when it is time to move, imagine that company closing down or selling your name to a competitor… scary thought. As business owner, you have to cover your risks. (Entegral is an accredited .co.za registrar).
Data is the new oil. It is the store of currency and the creator of value for companies in the 21st century ~ Spencer Rascoff, Zillow.
- Few real estate agents understand just how valuable their listing data is….is it time to turn the tables on portals? Many agents argue that it is ‘their data’, it is handed to portals on a silver plate, who in return, sell iot back to them. Value to that, but things to remember here:
- Portals play an important role in consolidating listing data and make it easier for buyers to view all the stock in a particular area. The alternative would be to search every agency’s website individually — time consuming! Portals save buyers time.
- It costs money to run a portal, market it and ensure a perfect user experience. In general, the best portals command a higher subscription fee due to higher marketing budgets and development teams that perfect that user experience. (Developers are expensive!). But, there is also a fine line between charging a subscription that provides a good profit, and going overboard to please your investors. Greed ruins a business.
- Opendoor, the technology startup that guarantees a quick and easy home sale (and resells those properties), is now buying homes at $100M/month. It is growing in traction and the model seems to appeal to many sellers. Opendoor, and similiar competitors like Knock and Offerpad, has found a way to connect directly with sellers and can simplify and shorten the whole sales process. With enough growth, nothing would stop them from lowering commissions in future. This would make a sale through them even more attractive, competing directly with real estate agents, where the length of the sale is always unkown. It could take a week to sell a home, or even months, with OpenDoor, the sale is guaranteed. Less stress for the client = winning business.
- This popped up in my FB timeline, I was catching up on some work in San Francisco exactly 5 years ago. I think that was one of the key moments I realized that as a team, we could work from anywhere. We started embracing remote work gradually and in 2015 got rid of our offices for good!. This move has opened a lot of new doors for us.