Are property portals competing with estate agents through FSBO listings?

Portals and Agents: Frenemies

The relationship between portals and agents can be best described as frenemies, a love-hate relationship. It is a symbiotic relationship where agents supply their listing data in exchange for leads. Some portals are more successful than others based largely on 1) coverage of listing data and 2) amount of money pushed into marketing to acquire more leads than competing portals. Redfin calls expensive portals “a tax on sellers”.

Getting closer to the transaction

You only have to look at the top US portal , Zillow, to see where the portal industry is likely headed: they are partnering with agents who are willing to pay premium subscription prices, and have a strong focus on expanding their Zillow Instant Offers (iBuyer direct-to-consumer model), now launching in Las Vegas after strong demand in Phoenix. Wall street have figured out that their is a lot of potential in offering people a quick and easy home sale and throwing money at iBuyer models.

Enter MyProperty

With our own property portal, MyProperty, we took a step back and reviewed this relationship between agent and portal. I like to question everything that is taken for granted and see the other side of the norm.

  • Are we uplifting the role of the agent or devaluing it by offering FSBO listings as alternative choice?
  • What else are we doing to uplift the value of the professional agent in a property transaction?

FSBO options in South Africa

Selling your own property in South Africa, you have quite a few options available, including:

  • Property portals, including Private Property, Property24 and IOL Property. Owners can list here and enjoy the same marketing exposure as agents.
  • Social media: Facebook & Twitter probably the top 2 options with the Facebook Marketplace quite a popular option. Can probably work quite well with hyper local ad placement, if the owner has the expertise and time to promote.

FSBO options on local property portals

The top property portals provide quite an easy way to list your property privately. In fact, ‘list property’ buttons are prominently displayed in the menus. Both Private Property and Property24 redirect you to pages where the FSBO option is the 1st thing you see if you want to sell your home, while IOL Property takes a more subtle approach by at least providing the client with an option to use an estate agent.

Who is the king of FSBO in the South African property portal space?

The general perception from agents is that x2 as many people would go to Private Property to list their home for sale compared to their nearest rival Property24. This makes sense, Private Property once focused exclusively on the private sale space before allowing agent listings to supplement and now drive their income stream:

based on 4 most votes
National market share of FSBO listings (for sale only) comparing top 2 portals

FSBO ads: a multi-million rand opportunity for portals

The estimated combined income for FSBO ads for the top 2 property portals, with the assumption that the same number of people will advertise again in 6 months once current ads expired is calculated to generate anything between R7 million and R21 million per year as minimum (least expensive vs most expensive ads chosen). The number could actually be much higher if ads are placed more frequently than every 6 months.

Is FSBO listings a threat to estate agents?

Most agents don’t seem to think so, as the property transaction is cited to be too complex, owners unable to price their home correctly and agents having a larger (qualified) buyers pool to introduce to new listings. The reality is that most agents are just too busy to worry about, or research any potential long term threats.

I’m the CEO of www.entegral.net, I love working with my remote team to solve real estate problems. Questions everything.