Adriaan Grové

Are property portals competing with estate agents through FSBO listings?

Portals and Agents: Frenemies

It is tempting for portals to get more involved with the transaction but run the risk of upsetting their biggest customer, their agents. Problem is, that most top portals are part of listed companies and need to show continuous growth. Price escalations will only get you so far, before you hit a ceiling, and you then need to look at alternative methods of boosting your bottom line, i.e. getting closer to the transaction to take a larger share of the property transaction commission pie. Years ago we’ve seen an attempt from Propert24 on charging agents a ‘success based fee’, based on a successful sale, while the current norm is charging clients based on number of leads received.

Getting closer to the transaction

Question is, where are we heading and will you see something similar happen in your country?

Enter MyProperty

We had to make a decision: our real estate clients pay us to help THEM sell properties and build their businesses, so why compete with them on other fronts, including For Sale By Owner listings?

  • Are we so greedy that the income generated from agent subscriptions is not enough in order to run a sustainable company?
  • 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?

Running a 100% independent company, the decision was easy: we are going to focus on working with our clients and uplift the real estate profession as much as we can. Read more on where we stand here: https://www.myproperty.co.za/about.

FSBO options in South Africa

  • Classified websites like Gumtree and OLX. Gut feel is that most FSBO listings will appear here as they have a free to list option.
  • 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

All 3 portals provide 6 months of advertising and attorney assistance for a once off fee, where the entry package for all 3 is very similarly priced:

Very little is done to promote the value of the agent when selling your home. Why?

Probably because the income stream generated from FSBO is big enough not to exclude from the income sheet. If owners are looking to advertise on the top 3 most visited portals, they are looking at spending anything between R3,790 to R8,190 to get their home listed, depending on package choice for maximum exposure. A substantial revenue stream is generated in the process depending on the number of ads placed on each portal.

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

based on 4 most votes

I then started to do my own research to get actual numbers. MyProperty is now agent only focused, so can be excluded from this chart. Based on the assumption of market share, number of visible FSBO listings in key areas, and time restrictions, I then only researched the top 2: Private Property and Property24.

My findings are that Private Property is still the king of FSBO for property only portals in South Africa, but interestingly enough it is quite close. Private Property is a historically FSBO site but Property24 caught up very quickly:

National market share of FSBO listings (for sale only) comparing top 2 portals

Gauteng is the top province when it comes to the number of FSBO listings. It would be interesting to calculate this again 6 or 12 months from now and see if anything changed.

FSBO ads: a multi-million rand opportunity for portals

Is FSBO listings a threat to estate agents?

In recent survey I’ve done, 90% of agents feel property portals who advertise FSBO listings is giving a slap in the face to the industry, based on the expensive fees they pay. They’ve seemed to make peace with seeing the FSBO option marketed as 1st option for home sellers.

You can argue that there will always be a FSBO market, but my feeling is that portals who promote this, will keep this option open to sellers and are not helping to promote the professionalism of agents. If selling your home privately is such a bad mistake, why do portals not promote the pitfalls? Unless FSBO works and it is growing in popularity?

It is beneficial for portals to keep a door open and extend the FSBO offerings to be more comprehensive: virtual tours, attorney assistance, virtual numbers, 24/7 helpdesk, buyer screening and maybe one day introduce an iBuyer or other concept. More involvement with the transaction and you can charge higher fees, and take more of the commission pie. My feeling is that it certainly is not helping to promote the professionalism of agents at this stage. Until then, the property transaction is made as simple as selling your own car, and agents will be seen as overpaid.

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