Rightmove’s monopoly is the single biggest driver of venture capital investors piling into proptech.
Facebook, Google, Amazon and Microsoft before them operate in a world where ubiquity is the natural state.
The internet has created a new world with no barriers to entry, so the service that everyone else uses becomes the de-facto monopoly.
Monopolies often make life easier: who wants to visit a dozen search engines or property listing sites when you can get it all in one place?
Taking advantage of this phenomenon is the aim of entrepreneurs and venture capitalists: a hope to create the next generation monopoly in a world without middlemen – or in this case, estate agents.
But we know how that story ended when Purplebricks won with its ‘Avon-style’ estate agency creating a network of ‘Local Property Experts’.
The repercussions have so far affected proptech more than the traditional high street agent: easyProperty flung itself into the arms of The Guild of Property Professionals when a tech-only disruption strategy failed to capture enough customers.
This ‘Avon-style’ business model, termed as a hybrid agent by the property industry – neither online nor traditional – isn’t suited to the natural monopolies the internet tends to create.
Purplebricks requires significant investment in TV advertising to drive people to a service they use very few times in their lifetime.
And that’s not the only issue with disrupting the people in property: the conveyancing process is currently taking a minimum of six weeks to sell/buy a home legally. It’s almost as uncertain a timeframe as finding a buyer with sales falling through a common occurrence.
Can you imagine how small Amazon would be without next day delivery guarantees and one-click purchase?
And that’s the most relevant example: Amazon has broken through many of the barriers people throw up when talking about disruption.
Naysayers said people will never buy shoes online. Well, now they buy three sizes and send back the two that don’t fit. Or all three if they’ve changed their mind. Flexible, quality service that gives people confidence to come back for more.
We had much of this negative commentary at the bottom of my recent Viewber article.
What is interesting about Viewber, which absolutely will transform the estate agency industry, is how there are currently no copycat companies.
Viewber could absolutely be that natural monopoly aided by the internet that disrupts the property industry.
The facts are that Rightmove fees will increase, the minimum wage will soon be increased further and business rates rises are already biting.
Once agents become addicted to higher profits, serving customers out-of-hours and never having to waste money hiring and training new negotiators, they’ll wonder why they didn’t use Viewber sooner.
And yes, I am absolutely saying negotiators are going the way of the facsimile machine.
But what else could? What are VCs eyeing up for disruption?
Research firm CB Insights takes a global look at some of the tech companies trying to disrupt residential real estate:
Beyond the realm of ‘tech-enabled brokerage’ where most of the companies talk about ridding the world of agents, there are a few interesting points of focus.
Josef Wasinski, my Unmortgage co-founder, often says inertia wins/disruptors lose if the experience on offer is not ten times better than the incumbent offering.
Change is something people need to believe in – offering ‘features’ like signing agreements on a smartphone are like next day delivery. They’re good, but everyone will offer them if people come to expect such things.
The world is going to be dominated by the next launch of a service that changes the way we think about – let alone do – property.
This line of thinking leads to funding of myriad virtual reality technologies, new agencies/brokerages using apps and the internet and data companies to predict property prices.
The latest trend is digital mortgage brokerage – lots of money to be made from cutting out the human mortgage brokers and replacing them with electronic forms that plug directly into the banks’ lending criteria.
Flying cars and colonies on Mars these are not.
Looking at the companies I have written most about over the years – part personal enthusiasm, part genuinely newsworthy – there’s a fundamental re-imagining of the world: Opendoor, Property Partner, Fixflo and Viewber.
In addition there’s been a lot of coverage on Agents’ Mutual / OnTheMarket.com and Purplebricks, not because they’re going to be big monopolies, but because they’re controversial in our little bubble.
Like boiling a frog, the heat of change will come gradually until it’s too late and we accept the new status quo.
That’s exactly what happened with Rightmove. Out went split commissions and common courtesy to be replaced by negotiators chained to their desks getting a reverse tan from the dull glow in front of them.
By the way, Amazon just entered the real estate market in the US with this ‘Hire a Realtor’ page:
What this will be is yet to be seen. It could become the new way to choose an estate agent, or something completely removing the relationship between agent and consumer.
Whatever happens, now is the time to think about how the internet will monopolise property. And in my mind, it will look more like Viewber than Purplebricks.
Quality service, rather than saving a bit of money, will always win out in the end.
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What a joke of an article.
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What a very strange article indeed, i am presuming written by someone who doesnt have any knowledge of the property industry, and yet another advert for Viewber.
To sum up for any non-property type people reading all this…..the Viewber people only do viewings, they are not negotiators, they have no involvement in agreeing a purchase price, they do not get involved in financially qualifying a potential purchaser and they do not get involved in checking said potential purchasers chain.
So no they will no replace negotiators at all, any good company values quality staff, that can do multiple things which a “Viewber” cannot. Yes there is a place for them in our market place, but not in anyway taking a major slice of our market.
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The person who wrote that doesn’t know the first thing about property and What Estate Agents actually do! Why print it?
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You know why the fax machine died?
Email came along and did it in a tenth of a time and offer a lot more than faxes.
You seem to think that “PropTech” is the future if cuts staff.
As a business owner this is false economy and will lead to a decrease in profits.
The best time to get properties on is showing perspective purchaser around a property. Probably where 60% of our instructions come from.
Negs doing viewings are a window to our business. The last thing I want is a naff journalist showing my properties with little knowledge of the house, area, industry and my company.
You have no idea about estate agency. I ask Ros in the nicest possible way to stop you printing such garbage. You have no idea what you are talking about.
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My day as a Viewber…..
Met a lovely couple outside the house, but then i struggled like hell opening the door as the key seemed to need “wiggling” a little, and i had no experience of how to deal with this. The couple asked me a few questions about the owners situation, how long they had lived their, when the boiler was installed, serviced etc, and how the owner was getting on looking for properties…i couldnt answer these as i had never met or spoken to the owner, and it wasnt really relevant to me just opening the door to this couple. The couple it would seem have a property of their own that isnt on the market, they asked me if this was something i could help with, but as it wasnt part of my job and i wasnt really interested i told them i couldnt help, but advised that they could look on Rightmove for some estate agents. They told me they really liked the house and asked if the owner would consider an offer, again i had to advise them that i have no knowledge of the owners situation, so had no idea.
Later on the couple gave me 5 stars because i was able to fulfil my role of successfully not only opening the front door to the house but also the back door to the garden, and i was quite friendly.
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A better headline might have helped. The fax machine is making a comeback in some quarters. Emails containing personal banking and finance information can be hacked, faxes are much safer.
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What’s with this fax machine “meme” (as the kids say)? It’s not the “emails” that were hacked but the systems in which the emails were kept on. The data still needs to go on your systems regardless so if your systems are not robust enough, they’ll be hacked anyway unless we’re suggesting we go back to paper based?
Looking forward to the future panic headlines, “SONY FAX MACHINES HACKED” “STAND BACK FAX, PIGEON POST IS BACK”.
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Unless you use secure email of course
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or secure pigeon post !!!
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‘You can’t digitise empathy’. That was a quote from my brother who is a tech Meister.
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Will a Viewber jump on the phone and spend the afternoon selling people the idea of viewing that cramped bungalow on the dual carriageway until we get enough numbers through the door to eventually find a buyer?
The problem with this article, and with so much of these “proptech innovations” is they assume that the agents role is passive. Buyers simply see a property online, contact the agent, view and if they like it, buy it.
It completely overlooks everything else involved such as the “selling” elements that are critical throughout the entire process, from generating the viewings in the first place to coaxing an offer, diluting a price reduction throughout the chain or juggling completion dates with a chain of inflexible vendors, all threatening to pull the plug.
Viewed in this context, Viewber is simply an outsourced viewing service and given this represents only a fraction of the negs role, this article is completely misplaced.
Not only that, but have you seen Viewber’s rates? I can hire a neg for the same cost who does so much more than simply show people around property.
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Yet again, the same agents who want to stay firmly rooted in the past ( and clearly aren’t very busy) whinge and moan about this terrible thing ‘ NEW FANGLED TECHNOLOGY’ . Do you not get it, that this ‘ new fangled stuff’ and techno services are here to help and enhance our business, not threaten it?? My negotiators are very good at negotiating , it’s what they do best and I’d rather they did that than spend hours in the car on their way to open a door so someone can measure up for curtains for the flat they may or may not buy.
When they can and it’s essential , of course my negs show houses but there are times when we’re so stretched, we need extra help..and fast . I want them to be doing what they do best, negotiating/winning business/talking to clients/ My motto is ‘ adapt and adopt ‘… Given half a chance, the people posting here ( who always seem to be the same whingers who look backwards not forwards ) would want to get rid of the internet and go back to rollerdeck card details !
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The skeptic would think this was Rayhan justifying his story.
– Agents love proptech if it helps. Fixflo, RM, database software, voip phones, and a host of others.
Viewber, unmortgage and get agent do not help. They do not improve service they actually dumb it down – my opinion piece!
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In many other industries, the tech that you reference was adopted 5/10 years ago.
The point is that the industry is seeing new technology that adds value.
That puts agents closer to customers.
If technology creates a barrier it is bad, if it makes customers feel closer it is good.
Look at football club’s use of social media to help engage fans and make them spend more.
That is a good application of technology.
Viewber in my eyes is an emergency resource that is great to have on hand but I wouldn’t want to use it instead of doing viewings myself. As has been said, until a Viewber can answer questions related to onward purchases, can qualify the buyer and then chase them up, they are simply opening a door (this can be done with smart keys and CCTV).
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Give me just 3 examples of this within the property industry observer.
We have countless people on here everyday selling us the latest disruptor. Just give me 3 that are a success.
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Very little that is being done is disruptive, that’s my entire point – pretty much every piece of technology is simply automating processes.
In most industries, these automations and efficiency gains have already been incorporated.
That isn’t disruption, that is just a strive for efficiency which is business 101 but seems to beon the backburner for agents. I’m not here to bash agents, despite what some say. What I would like is for agents to be better at their jobs. This is not a personal attack on anybody here but more as a general theme. If the general public were happy with the service provided and felt it was value for money then PB would not be a success. Agents need to respond to what buyers, tenants and homeowners want.
Every single industry is moving to buyers having the power not suppliers. The longer agents keep their head in the sand about that then the worse it is going to get.
Use basic technology to provide the instant responses that PB and others provide not to cut costs but to deliver more added value. What would a customer prefer:
You entering details into a spreadsheet and spending 5/10 hours a week on admin
OR
You using tech to do all that stuff and then having more time to be on the phone with them, visiting them, coming up with marketing plans, calling buyers, chasing chains etc etc.
AskPorter I would suggest will be a success
LeadPro is another useful piece of technology that puts agents first.
What Zoopla do with Hometrack will probably result in a pretty dangerous piece of kit.
Not only can they monitor supply and demand but they have the historic data to go with it.
The article itself is deliberately provocative and some points are way off but the main idea is right. Agents need to adapt, they need to provide a 2017 service. That is how you add value and can continue to charge what you want and not enter a race to the bottom.
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observer – you state
“Every single industry is moving to buyers having the power not suppliers.”
It certainly seems that way.
But may I ask just how many of those ‘industries’ have a Law attached to them dictating duty of care to the vendor and/or the property?
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The word “buyers” here is misleading as the buyer is anybody who buys a service.
In estate agent world the buyer I am talking about is the vendor (as they pay for agents).
In most industries buyers have rights under consumer law that their supplier has to conform to.
E.g. cars/phones etc cannot legally explode with no recourse for a customer
A product must last the duration it is expected to last (based on price, advertising, descriptions etc)
Sorry to point this out but estate agency isn’t special.
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“The word “buyers” here is misleading as the buyer is anybody who buys a service.”
Your word – not mine. I guess then what you’re saying is that it was you doing any ‘misleading’?
“In most industries buyers have rights under consumer law that their supplier has to conform to.”
Most industries? Surely that should read “every industry“?
“E.g. cars/phones etc cannot legally explode with no recourse for a customer”
I won’t argue with you on that point – but what if they illegally explode?
“A product must last the duration it is expected to last (based on price, advertising, descriptions etc)”
You originally said “…buys a service“. Now you have moved on to “A product…”. Which is it to be? – as the two are viewed and treated very differently under relevant Legislation.
“Sorry to point this out but estate agency isn’t special.”
Never said it was. Who did?
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just give up
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Thought you already had…
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re: would want to get rid of the internet and go back to rollerdeck card details !
I wonder how many agents understand you can actually sell a property without the internet?
Old school dinosaurs, like me can and still do just that.
The point is we also understand enough of the new fangled stuff to know it is just another tool to enhance our service.
The internet isn’t our replacement.
Yes technological advances mean that estate agents selling property may indeed go the way of fax machines, but there is a big difference between what tech offers in todays marketplace and what real home buyers and sellers actually need.
Don’t write off us dinosaurs just yet.
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The problem with a purely digitised service is also one of accountability, there is no ownership of problems when they arise or if there is it’s painful, impersonal and rarely handled by anybody with any real power to solve it, computer says no, call centre says no, conveyancing super centre says no, nobody cares you might as well be in a void..
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Rayhan Rafiq Omar Proptech companies are going to go the same way as the horse and cart.
My motive for this remark is because I have a vested interest in keeping my job as an estate agent.
Am misleading anyone ?
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Depends whether negotiators are sales people with a deep understanding of their marketplace or bums on seats employed as dispensers of information. I can “match” a property and email it to 100 buyers in 30 seconds, but it never gets the results 100 phone calls will. A recent call to PB spent more time with me trying to explain to the call centre what I was enquiring about in areas they’d never heard of, than them asking about me as a buyer.
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People love the idea of a seemingly lower price service until they realise that they are not receiving the service they had hoped or told they were going to receive. There is always a market for cheap and the cheap agents are welcome to that market. Me? I’ll take the experienced customers who value someone who can take the time to understand a problem, offer useful solutions based on genuine experience and market knowledge (rather than blindly reading off a flow-chart script on a PC screen) and who takes genuine responsibility for their clients well-being.
Currently, the call-centre sector has peaked and dropped back in market share and there is a huge battle for the PR war being fought to try to convince consumers that a horse-burger tastes the same as a good quality steak. There is nothing wrong with horse-burger, as long as you know that’s what you are buying but, beware the backlash of trying to pass off a cheap product as a premium one.
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Whilst Viewber is clearly grateful for Rayhan’s kind comments it is important to understand that Viewber exists NOT to replace what agents do, merely to fill in gaps. I’ve been a buyer and tenant myself and remember (it’s why I launched the company) the serious issues I had trying to see property at weekends. Knight Frank, Savills and many others use locals to show properties, are they doing something wrong – and why shouldn’t all agents have the same chance. Yes, many employ weekend staff and good on them, but they require managing and have a habit of leaving – Viewber exists to offer people a simple overflow viewing service whenever they need it wherever they want it, from people who are local to the property so know the area. The same Viewber tends to do viewings on the same property, gets a full url and brochure before they go and encourage the viewer to call the agent whilst at the property with any questions. I’ve been an agent for almost 40 years and know there’s no replacing negs, Viewber is just there to make sure those who wouldn’t have been able to see a property can do so, indeed over 5000 have so far and the agents are happy.
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Nobody in Estate Agency today can function without technology but it is how we use it. All so often a new idea or piece of kit comes along and bingo, the baby goes out with the bath water.
Hence the birth of office based negotiators who never see a property.
Its a people business and the negotiator can add so much value during the selling process to both the vendor and the buyers; just matching a load of properties/applicants as surrey 1 says above is spot on.Easy but is it effective?
Negotiators negotiate and actually getting a negotiator to do the viewings builds the relationaship between the negotiator and the buyer who while they may not buy this particular property may well buy something else that the negotiator knows about. I accept it is not always possible for various reasons for negotiators to accompany all viewings but it is the best way when possible. Viewing staff employed by an agency providing they are well briefed are fine but viewing staff from a non connected ‘agency’?. The least effective but at least the buyer sees the property but it could backfire on the agent if that viewing person is not well versed about the property or views it only as a job to get paid with no wider interest.
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Until everyone has digital locks, or is happy to have one of those little lock boxes on the outside of the house I still don’t see the practicality / financial viability of Viewber. Plus its just too risky placing your brand in the hands of someone else.
Although I can see someone offering a Purplebricks style service but cutting out the LPE by using Viewber, and just being call centre based. Then charging per viewing to cover the Viewber costs, and being left with a much smaller wage bill at the end of each month.
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The last truly disruptive piece of tech on a local level to my mind was the digital camera and office laser printer, we had the foresight/luck to get in on that early when the competition were still using sticky backed minis/7×5/6×4 , basically once the prints ran out there were delays in getting them replaced so the solution was to run the stencil through the photocopier resulting in a black and white mini on the front of the details, so I get my hands on the competitions details that are in that state and put them in a presenter alongside our multi photo never run out full colour blah blah and absolutely went to town for about six months before the squawking by my competitors finally got their head offices to react, 1.2M digital camera and a qms laser printer, cleaned up on everything I could get out to lol
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Overcome this with your digital age
Buyer – oh yes I have the money no problem – am a man of my word – have sold my house for cash to only one person in the chain – am using a well known slightly off blue/pink named company
Contact on-line “agent” – we don’t check out finances and chains, we’ve been paid
Self – not happy with this lack of clarity – speaks to man of his word’s buyer directly – turns out there are five houses and five mortgages in chain
Decision – sell to other prospective buyer – completed in four weeks, no hassle, no delays
Without genuine investigation of the circumstances presented by a buyer, how can a seller make an informed decision on who to sell through.
Instinct and experience plays such a large part in property transactions.
Computers can’t spot bulls….ers
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Prop Tech, Schmop tech
https://goo.gl/79PXZU
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Exactly! Monopolies make life easier for property managers. Monopolies are really advantageous for the companies that enjoy the benefits of an exclusive market without competition.But, this is quite tough for consumers, as they have to pay unjustifiably high prices.
http://www.gherbertbanks.co.uk/lettings/
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