Portals across the world at getting closer to competing with agents, it is claimed.
Expert Mike DelPrete, who describes them as ‘best frenemies’, says in his latest analysis: “Portals and agents have a sympiotic relationship. While they may not always like each other, they both benefit. Portals have been reticient to get directly involved in the transaction, for fear of upsetting agents (their biggest customers).”
But he says that direct competition between portals and agents could come in several forms:
- A portal could launch its own brokerage/agency
- A portal could launch a Purplebricks-style agency which would be fed leads through the portal
- A portal could buy and sell homes directly
In all scenarios, says DelPrete, the portal would take a much bigger share of the total agents’ commission pool.
He says that the move would make sense.
The portals would gain massive audiences, leading to low customer acquisition costs; they would also operate a consumer-oriented brand built on trust and transparency; the portals already have the technology to do it; and finally, they would be seizing the opportunity to create a one-stop shop for consumers.
DelPrete says that three recent events show that portals are getting closer to crossing the rubicon.
The first was the £125m investment by Axel Springer in Purplebricks.
The second was the announcement by US portal Zillow that it will buy and flip houses directly from consumers.
And the third was last month’s announcement that US private equity firm Silver Lake is poised to buy ZPG for $3bn.
DelPrete concludes: “There is undeniable movement from real estate portals towards getting directly involved in the transaction, and putting them in direct competition with real estate agents.”
Comments (13)
Been invited by Yopa via a “Rightmove partners email” to have a free market appraisal of a house they think I bought within the last 6 months. I actually bought it over 16 years ago and sold it within the last 6 months. Classic.
They’d best get their random number generator sorted out before they try; being directly responsible to a client for the garbage it pumps out is a different ball game to allowing other to run the gauntlet of its inaccuracy and vagueness.
Rumour has it that Zoopla is about to do it.
It would be a broad daylight suicide – as agents would stop providing them leads.
I wouldn’t want Rightmove to stay alone, as they are already incredibly greedy
Stories have circulated like this for the past few years, running alongside the new online only agents coming to the market.
I have yet to see a reply from Zoopla or Rightmove confirming to their own clients that they have no intentions of opening to the Direct Market – only that it does not meet their CURRENT criteria.
As many have said – doing so and being profitable is another matter. Why would a portal move from massive profits to potential losses ?
The only reason I can see for doing so would be as a reaction to a mass migration of agents away from those portals.
Hi SJEA,
I appreciate that the phrase “nor have any plans for the future” is very slightly ambiguous – but all things considered this is a fairly emphatic response from Alex Chesterman of ZPG to my question ( posed on another industry news site ) in September 2015…
Simon Bradbury: Hi Alex – Are you able to categorically confirm or deny that Zoopla will never accept private listings. I simply can’t imagine that it would make financial sense for you, but a number of “conspiracy theorists” think that you might!
AC: Indeed our industry appears to enjoy a good conspiracy theory and this is one of the more popular ones. I can categorically state, as I have before, that we never have, do not now, to accept listings from private vendors or landlords. This is not for lack of opportunity as we get many dozens of enquiries daily to accept these…and we point them straight to one of our local member agents. Our business is about connecting property consumers to local professionals and helping agents win more business. Period.
Yes, I know that ZPG now have new investors and may take a different approach in the future – but really it still seems very unlikely.
Think about it. Suddenly 75% of the agents on RM go to OTM and drop RM. RM will not take that lying down and will open to private sales.
I can’t see 75% of agents dropping the number one and best known portal in favour of one that the buying public have never heard of! I may be proven wrong but I just can’t see it.
fake news!
whilst RM et all are generating huge profits from us humble estate agents it would seem counter intuitive to go head to head.
That said.
Reed.co.uk did (in the past I don’t know in recent years) allow other recruitment agents to advertise vacancies on their web site for free. The idea was to generate the candidates. Once you had the candidates you could use them as leverage to generate your own leads. If you have ever had an email from a recruitment company with a CV attached of a potentially suitable employee you’ll see what I mean.
Is there a business model where RM allow free advertising for access to the buyer?
We are slaves to the portals. Why would they kill their slaves. Interesting that they have allowed a virus to spread that may kill their slaves. The virus is pay any way onliners.
Bless you all for pay any way should be the niche we need to ban this practice and save our industry.
Funny as!
Portal passive intermediaries. Attention ambulance chasers don’t bin the literature I think PPI claims might get a 2nd wind!
Duty of care and skill sits there presiding over our industry, any attempt to ” “cross the rubicon” ” (FFS!!!) will be met with its full wrath, but only an experienced agent would know that and why!
Whilst anything is possible, I would think it very unlikely that the highly profitable portals are likely to consider amending their business models any time soon. Why would they?
Possible – but not probable!
I tend to agree. Given that none of the current “for sale by owner” agents like PB/Emoove etc are making no money, and in essence thats all a portal could ever hope to become, why would you move away from a business model that generated, what was it, a 75% profit margin and £144M profit last year for Rightmove?!…..actually Simon I disagree, it ain’t EVER going to happen!
It’s been long predicted. Interesting that one of the UK portals has recently effectively informed the ASA that their own data headings cannot be trusted. A property marked as ‘withdrawn’ in the data they charge for, “could mean something else entirely”. Watch this space.