Four ways proptech is making the real estate world think
“Property technology (AKA proptech) startups are starting to shake the century old South African real estate industry to its core. Here’s four ways how they are doing this.”
1. Huge commission savings
Commission fees are one of the first points of attack for the newcomers, with PropertyFox charging 1.5% and HomeBid 1.95% instead of the average of 6.5%. A HomeBid seller has recently saved more than R230,000 in commission on a Bryanston property sold for R4,250,000.
2. Automation makes things simpler and easier
eazi.com deconstructed the process of buying and selling a home and redesigned it based on efficiency, rather than shared commissions. This combines the right people doing the right tasks, the most efficient processes, and cutting-edge technology. For instance, eazi.com buyers can submit and sellers can accept offers online, anytime.
3. Radical transparency
Technology-powered companies have broken ranks with the magic circle and revealed information that typically is obscure for buyers and sellers, or tenants and landlords.
For instance, Leadhome’s online self-service platform, Simpli, gives sellers information that removes much of the guess work about the deal, such as the average prices properties in their area have sold for. Each stage of the sale, until it is handed over to a conveyancing attorney, is tracked and available via the platform, including who is coming to view their property.
4. Rental is in on the game too
It’s not just property sales that are being shaken up. Proptech startups such as Ekaya and HouseMe have their eye on making the rental market work better using some of the strategies mentioned above. Ekaya is focused on making rental payments better by connecting tenants and property owners, managers and investors through an online platform that makes paying and collecting rental payments simpler and safer. And HouseMe provides a transparent online bidding mechanism that lets tenants bid what they are willing to pay, starting at the landlord’s reserve price.
Interestingly, however, although these new entrants have zero loyalty to the way things have always been done in the real estate world, they are, for the most part, inclusive in their approach to working with traditional players and the entire eco-system to do things better.
By Vanessa Clark