Schalk Pienaar is the co-founder and CEO of Cleverprop.com. He is an admitted attorney with more than a decade’s real estate expertise.
Society has a cyclical co-dependence on technology, and technology and human life can no longer be separated. The more we have, the more we need and depend on it. We use technology to travel, communicate, learn, do business, and to live in comfort.
Let’s look at the following examples of how the correct use of technology has changed industries. Uber, the world’s largest taxi company, owns no vehicles. Facebook, the world’s most popular media network, creates no content. Alibaba, the world’s most valuable retailer, has no inventory. Airbnb, the world’s largest accommodation provider, owns no real estate.
Fixed-fee online estate agencies have been around for years, but only recently have they started to influence the South African real estate market. In the last year, growth in online fixed-fee estate agencies’ housing stock exceeded the conventional agencies by almost 4 times in the United Kingdom. If predictions are to be believed, 50% of all real estate stock will be marketed through these or similar agencies by 2020.
Why are fixed-fee online agencies so attractive?
- Savings: In Cleverprop’s case, you pay a once-off fixed-fee of R32 000, notwithstanding the value of the property. With conventional real estate agencies, you can expect to pay between 5% -7.5%, excluding vat, of the sales price to estate agent commision. That equates to a R150 000 saving for the seller on a R2.5mil property transaction;
- Instant: Generation X and Y consumers are actively participating in the real estate market and consumers have become accustomed to fast, efficient, platforms where transactions can be done at the click of a button. Online estate agencies’ platforms are purposely built to accommodate this. This is made possible by the fact that they have 24/7, 365 days a year capabilities;
- Convenience: The easy-to-use online platforms are attractive alternatives to attending offices of conventional estate agencies;
- Audience: Through clever use of social media campaigns, Google Ad-Words search engine optimizations and the like, specific consumers can be targeted with the click of a button. Purchasers are already making use of online portals like Property24 and Private Property to narrow down searches before booking viewings.
International consumer behaviour is changing as technology is improving and South Africa is no different. We’re steadily becoming more accustomed to online transaction – just look at the growth of sales from companies like takealot, Spree, or OneDayOnly. The real estate industry has remained unchanged for far too long. This is finally changing with the help of online and fixed-fee services. Consumers are finally offered an attractive alternative to buying or selling property.
The case for agents
We do believe, however, that no real estate agency (online or conventional) can exist without the human factor of a real-life agent. Experienced, licensed professionals will always be in demand – but where they find their services needed might change.
For most consumers, a property transaction is the biggest investment of their lives. They will still need the personal attention offered by an agent, guiding them through the steps of making the right purchase. Many consumers are still relatively conservative and uncertain about online transactions, which makes the ability to speak to a real person all the more important.
When buying property, we all know that location is of incredible importance. The geographical expertise offered by a person familiar with an area cannot be underestimated. Finally, we see a continuous need for experienced agents to manage the negotiation in sales. In a buyer’s market, as the one we’re currently experiencing, this negotiation in sales price is essential to secure the best possible price for the seller.
At the end of the day, conventional estate agencies only need to look to the previous kings of conventional transport, telecommunication, and accommodation to see that being complacent in the face of technology and change won’t end well.