Is the South African real estate industry held to ransom by property portals?

Let’s build our own industry owned property portal

Historically, estate agents have countered threats to their industry by taking shares in newspapers and portals, or starting their own — with mixed results. And if you take a share in an existing portal, be sure it is not a minority stake, as we saw with Private Property.

  1. From a systems back-end perspective look at how listings will be imported into your portal, quality on listings are controlled and how support to all agents are handled.
  2. From a front-end, you would need to be laser-focused on creating the best possible user experience, and be prepared to constantly tweak the small things to create more leads.
  3. Invest a large portion of your funds in innovation. This means trying out new things that will in most cases not provide a visible ROI (if you are really aggressive in what you do).
  4. Have a really awesome team that know each other’s strengths and weaknesses.

The other threat: low commission and online agents

As if the threat from portals aren’t enough, traditional estate agency models now have to compete against the increasing number of low and fixed commission and online agencies. In South Africa we have the likes of Leadhome, PropertyFox and Steeple that resembles overseas models like PurpleBricks and eMoov. They do of course face a very difficult journey, and most agents will shrug it off and say that these models can never compete long term.

A defensive position

A year ago, REBOSA set up the EAPC (Estate Agents Portal Company) with the following mandate:

The danger to consumers

A defensive position taken by the real estate industry doesn’t necessarily result in good news for the man in the street. Consider the following statement made in the latest Property Professional magazine by a franchise CEO:

From the Nov/Dec 2016 Property Professional Magazine

The solution?

For agents, work on improving your own real estate business. Find new ways of generating leads, especially referral leads, so that all your eggs aren’t in one basket (portal). I believe there is a huge value for hyper-local marketing and establishing your self as the go-to agent in your local neighborhood. You don’t have to be part of the biggest franchise, or have all the top banners on all the portals.

Will an industry owned portal work?

With the right team and funding, you would be able to establish a #2 or #3 competitor. As a late entry into the market that has to play catch up, it would be extremely difficult to unsettle the #1 portal. Take a majority stake in an existing portal, and you can shorten this gap. Should a defensive approach be followed, where listings are delayed or regulated to portals, it could close the gap even further (although as I’ve mentioned, at the expensive of the consumer).

Food for thought, the future of estate agents

Seeff doesn’t see the industry changing in the next 3–5 years but see a changing role of the estate agent. I agree, the role of the estate agent is changing, perhaps faster than you realize: More technology oriented, more project manager & transaction coordinator. Gone are the days of being the only source of property information to sellers and buyers. They do their own research before they speak to you.

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

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Adriaan Grové

Adriaan Grové

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