PropTech roundup #7: Justifying real estate (com)missions & portal taxes

Justifying your (com)mission

Rize of the iBuyer

Average commissions

Real Estate companies sell a service, not a product

Expensive portals “a tax on sellers”

  • “MLS is the biggest gift given to consumers from agents in the US, in place for over 100 years. Real Estate is conducted different in US than most other countries but more countries are eyeing the US MLS model, according to the panel. The MLS system is getting better, getting consolidated and the dynamics are working. MLS is not sexy but it is important and future is” . (In South Africa MLS is isolated and perhaps have some negative association with agents ‘dumping overpriced stock’ through it. I believe there is opportunity to improve this model).
  • Zillow, Redfin and Realtor.com agrees competition is good and keeps everyone (including portals) on their toes. In South Africa more (portal) competition is needed, and agents need to support them.
  • Redfin argues agents are passing expensive cost from portals to consumers, a portal tax. Some agents paying $5000-$6000 per month to portals just to “connect with clients”. Glenn Kelman says “For us, we view the portals as a tax we have to pay. Every dollar we have to pay the portals is a dollar we have to charge the consumer.” I have to agree here, some portals are quite expensive due to a monopoly/duopoly created and agents are basically stuck in a Stockholm Syndrome.
  • Redfin says prices for portals go up if there is only a few major players, and they would actually love to avoid portals and drive consumers to their website. Their 1% low fee (listing agent side) marketing is done outside portals . (Redfin doing a great job, they are the most visited Brokerage website in the US. They are focusing on their own website and not the portals. In SA, I see daily posts of agents promoting their listings from links from the portals rather than their own websites.
  1. Base CRM system, with full listing syndication integration
  2. Flex Template Language, a development platform for real estate websites

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Adriaan Grové

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