While COVID-19 turned many industries upside down, it’s also resulted in a wave of innovation sparked by firms coming to terms with new and unexpected business conditions. The global property industry is a case in point, with a host of savvy startups booming as consumer behaviors evolve and entrepreneurs challenge established ways of selling houses.
One big shift has been the rising popularity of fixed-fee real estate agencies that, instead of charging via the traditional model of a sliding commission on sale, charge a set fee.
Australian-headquartered fixed-fee agency Upside Realty is one of the property industry players at the vanguard. The company, according to Founder Adam Rigby, has sold more than 1,500 properties worth over a total US$780 million since its inception in 2017.
Like UK-based trendsetter Purplebricks, which pioneered the practice of flat-rate charging since its foundation in 2012, Upside’s cut-through is the fixed fees it charges vendors.
REAL ESTATE SHAKE-UP
Upside, unlike conventional realtors, offers several payment options for sellers. Each option comprises an upfront fee and another, more substantial charge when the property is sold.
Rigby, who bills the agency’s offering as an alternative to traditional bricks-and-mortar real estate agents, attributes much of the company’s rapid rise to the transparency of its pricing model, as well as the strength of his agents’ work on the ground.
“We have a bunch of disrupters who work for us and want this whole process to be done better.”
- Adam Rigby, Founder, Upside Realty
On this point, he says, just like the pricing model, his team wants to “shake up” real estate. “The agents that come and join Upside are already successful agents under other brands, and they’ve already sold many houses in their particular areas,” he tells The CEO Magazine. “We have a bunch of disrupters who work for us and want this whole process to be done better. It’s bothered them for a long time.”
Another element to the company’s success is efficiency, he says. By integrating its purpose-built NurtureCloud technology into its systems, Rigby says the agency can use machine learning, data and market intelligence to better assist agents, including on lead generation.
“If Upside is going to compete as a lower-cost option, then we have to be more efficient,” he says. “Our agents don’t sacrifice income; in fact, they earn more even though the vendor pays less. The reason we’re able to do that is because we make the whole process much more efficient for everyone.”
The property management segment is also undergoing disruption. Until recently, property managers fulfilled their role using tried-and-tested methods unchanged for decades, but companies like US-based Cozy have changed all that.
Taking much of the work out of the hands of human property managers, Cozy uses a cloud-based platform that enables owners to easily manage their own properties without a real-life intermediary. The company, which was sold to US-based CoStar Group for US$68 million in 2018, covers tasks like rent payments, online rental applications, secure tenant screening and renter’s insurance.
Another upstart in the space is Australia- and Sri Lanka-headquartered :Different, which was founded in 2017 and today has thousands of properties under management, according to Co-Founder Mina Radhakrishnan. Inspired to revamp property management after helping her retired parents navigate the field, Radhakrishnan says :Different represents an effort to improve transparency for owners and investors when it comes to real estate.
“We’re giving owners visibility over what’s going on with their property.”
- Mina Radhakrishnan, Co-Founder, :Different
“Our goal is very much focused on the consumer,” she tells The CEO Magazine. “If you have even a hundred dollars in your bank account, you have full visibility over every cent, whereas with something like a million-dollar investment property you don’t have a lot of transparency over what’s happening with it, or what decisions are being made.”
That’s where :Different’s online tech platform assists, she says. With it, users pay a fixed management fee of US$80 per month and in return are able to manage leasing, organize fast repairs and maintenance, and conduct routine inspections.
As Radhakrishnan explains: “We’re giving owners visibility over what’s going on with their property; for instance, When did the rent come in? When’s the next open home? What was the latest maintenance request?”
For Buyer’s Agent Institute CEO Ben Handler, the shift away from brick-and-mortar real estate agencies and property management firms is no surprise. Handler, who also co-founded one of Australia’s biggest buyer’s agencies, Cohen Handler, says the property industry remained the same for many years failing to “change with the times” until the pandemic hit.
He cites live property auction app AuctionNow, multinational property visualization company Inspace Studio and online property bidding platform Openn Negotiation as tech-based property players to watch looking ahead.
“The real estate market hasn’t changed; you still jump online and look for properties, and so there’s a whole new trend going on now where people are like, ‘I just want to outsource buying a property’ and get it done.”