PropTech Roundup #4: Poaching hot shot estate agents is a strategy
- Real estate technology company Compass, received $450M in funding and is now valued at $1.8B. They launched in 2013 which makes them 4 years old. Investors are betting on technology focused real estate companies and not traditional models. Is the future of real estate in the US, Redfin and Compass? Certainly looks promising. Their website is super sleek and after browsing a few properties, you are pushed to sign up to view more — quite a good strategy to get data although it would be frowned upon by some. With all the funding, Compass is poaching hot-shot estate agents — but just have a look at the diverse skills-set for new jobs offered — this is the approach from tech-first real estate companies right now.
- AI bots are making inroads into real estate, the latest is from REA Group Australia, launching a voice interaction service for Amazon’s Alexa intelligent personal assistant device. I think the opportunity is however to expand this into real estate search, home loans and finding the best estate agent for the job. Alexa has the potential to turn into one big lead generation machine for those involved in real estate transactions.
- It looks like our objection to the latest Private Property / Caxton deal last year was unsuccessful. Our main objection relates to the creation of an ‘industry database’ and how this new company wants to control the flow of listing in and out to property portals through their SWITCH project. This can create a unhealthy situation that seeks to promote the interest of those who have shareholding in this new company, including collaboration by the 2 larges bond originators. To me, it simply looks like a last ditch effort to remain the ‘data keepers’. (SWITCH if very much like Entegral’s SYNC listing syndication product created years ago, but it is a standalone, politics-free product where agents retain full control of the data and where it goes (as apposed to some industry body).
- Poaching hot-shot estate agents is a strategy. Agents are the most valuable asset to a real estate company and the good ones, are worth gold. Keeping good agents, is an investment but from what I can see, also a challenge, because everyone will head hunt them. To keep good agents, you need to perfect your leadership as business owner. Retrospectively look why agents leave and apply some small changes is your job. Rinse & repeat until you perfect it. It is much harder and takes more time to look for a great new agent, than keeping your current ones happy. Being a broker, you are very much in the recruitment business.
- Have a look at this tweet from Michael Jordaan. It is the same reason why hybrid & online real estate agencies can now challenge traditional high commission models through tech/automation optimization and running a more frugal business:
- Speaking of Hybrid Estate Agencies, Leadhome ran some cheeky Facebook ads that upset quite a few traditional agents.
“The industry is in need of drastic change. We acknowledge this and are working hard to gain the respect and trust of our clients by changing the way the current model works.” — Marcel du Toit, Leadhome
- Sell your home at the press of a button. Mike Delprete did an interesting analysis on Opendoor numbers — look how quick they flip houses now compared to a year ago: http://www.mikedp.com/articles/2017/12/4/the-opendoor-machine-4-numbers-you-need-to-know — can you imagine how much better they will be at this one year and 5 years down the line?
- Redfin claim their fixed salary agents earn a lot more than their traditional counterparts.
- Are you following a mobile first approach when designing your real estate website or system? We do, and why we’ve opted for responsive design, ensuring no functionality or user experience is lost when users visit your website on their desktop or phone. On most real estate websites you will see something like this, where +-50% of your visitors will use their mobile phones to view listings:
Creatures don’t like change. I guess this is why (fast food) franchises are so popular. You know what you’re getting. The same could be said for any other franchise if they stick to the rules. It is a winning recipe that is tweaked over time. Although not immune to (technology) disruption. The problem with franchise real estate models currently, is that most agents are appointed as independent contractors, which leaves a disconnect between what should be done (i.e. rules to be followed) and what the agent feels like doing. I guess this is why tech startups like Redfin follows the agent employee model — guarantee a consistent sales process, anywhere in the country.
- When will franchise models realize it is not just about agent or office numbers, but about the number of quality agents. The following illustrates my point ;) (if you have a small estate agency, know that you can compete in your local area based on quality of service).
- New South African property portal Qwengo launched, with Entegral clients enjoying an initial exclusive feed to them. Quite a user friendly, responsive website. Competition is needed to challenge the top portals, and keep prices under control.
- RE/MAX finally disclosed their 3rd + 4th Quarter earnings. It unfortunately made quite a dent in November when they failed to announce it, looks like it is on the upswing though: