Who owns the real estate industry?
According to this, South African estate agents ‘saved the industry’ by gaining control over print. And now they should guard against ‘unrelated business interests’, i.e. property portals and build an industry owned portal.
- Yes it is too late to build a new industry portal. Early adopters have a huge advantage. How long does it take to build a portal, apps, get interfaces up from agents and get enough traction that it can deliver substantial leads to estate agents? Being in the industry myself owning an independent portal, it is a very difficult and expensive road. It does require quite a huge investment and if you want to be #1, be prepared to run at a loss for while. Best bet? Buy an existing portal over to give you traction. Not one controlled by investor who may just one day want a return on their investment and decide to sell to the highest bidder (as in the case of Private Property). Not part of it…. lock stock and barrel. Be prepared to invest lots to play catch up and keep a close eye on similiar attempts worldwide to learn from mistakes.
- Estate Agents did not ‘save the industry’, the internet did. The internet prevented the industry from eating itself with its monopoly action that provided preferential treatment to some in the print space. The internet provided smaller independent estate agencies and new startups to thrive, by providing them with an easier entry to market…and it simplified the home search experience for buyers.
- Although property portals are seen as ‘Unrelated business interests’, I’m actually quite sure many buyers and sellers will find value with the simpler way of finding a home or agent on one website. In fact, property portals are one of the core elements of the real estate transaction although some agents feel they are held ransom. Buyers are doing more of their own homework and in many cases, now exactly which homes they want to view. It is unfortunate though, that portal monopolies do command heavy fees in return for leads. Some of the top portals will provide 80–90% of leads to agents. So reduce the dependency and start innovating. Invest in different ways of attracting leads and invest in your own website. It’s quite amazing to see how the portals dominate Google SEM positions, while many agencies, including big franchises, have it within their power to compete with that on a hyperlocal level. Opportunity lost.
You had control of print, what happened then?
I wonder why the industry failed to take advantage of their print monopoly years ago, and not invested and continued to push an industry owned portal when the internet arrived in the 90's? Maybe no one had the vision? There were attempts, but you need absolute focus, an awesome team with a vision and lots of cash to make it work. You also need buy in from everyone in what I believe is a fragmented industry. The real estate industry supported and allowed portals to grow and 20 years later people are complaining and even suggesting going back to print!…
Spoiler: Most disruptive businesses are new to the market, not existing players. Think Tesla, Uber and AirBNB. Uber doesn’t own taxis, AirBNB doesn’t own hotels, and Tesla introduced electric cars at a time where industry giants failed to see the opportunity. It is about taking risk and climbing out of your comfort zone as a company. Just have a look at what is currently happening in the USA, see any known real estate franchise names there? Zilch!
It is time for the real estate industry to stop playing victim. Start innovating, stop holding on to the believe that you are entitled to everything, stop trying to control the data. Stop thinking that because you are #1 in sales or number of agents, that you will always be #1. Explore opportunities, but above all, put your focus on the consumer, not your own best interests.
I hope some estate agents in South Africa share my view and see the opportunity. The time has never been better to start disrupting, are you going to be part of it?