Property portals – you get what you pay for
MAIN IMAGE: Andrew Golding, chief executive Pam Golding property group; Nick Pearson, Tyson’s regional director (Western Cape); Adriaan Grove, CEO Entegral; Matseleng Mogodi, Snooks Estates
Listing on the major property portals can be expensive for estate agents. There are so many online options today to list property, many of them free – do you need to list on a major property portal to succeed?
Today most people today start their search for a new home online. A survey done in 2018 in the US found that 93% of home buyers used websites when searching for a new home online. In South Africa it is estimated that almost 60% of the population had internet access in 2020 and this percentage is expected to grow. So, sellers expect that estate agents will list their properties not just online but also where it will attract the most attention.
The property portal scene in South Africa is dominated by two players, Property24 and Private Property. Just type in ‘houses for sale’ on Google and these two sites pop up first. Listing on these two are almost considered compulsory because of their reach. As Andrew Golding, chief executive of the Pam Golding Property group, puts it – for many property buyers these portals are “the ‘go to’ first port of call” when they start an online search for a new home.
The reason why is clear. The listings on the top portals are comprehensive and navigating the site is user-friendly. As explained by Heather van der Spuy, principal of Steer Properties in Cape Town, the listings indicate area demographics, accommodation details, price, size and photographs videos etc “making the search for property highly discoverable”.
However, it is also expensive. For smaller estate agencies, Property24’s monthly bill for ‘successful leads’ can run into thousands of rands with often far fewer actual calls or emails received than the number of leads they were billed for.
So, is it a question of damned if you do and damned if you don’t? And if you do decide to try alternative listing options, how successful are they? Property Professional asked property leaders for their evaluation of the matter.
Property24 and Private Property
The fact is, listing on Property24 and Private Property works precisely because they are the two biggest property websites. According to Nick Pearson, Tyson’s regional director (Western Cape), these two are by far the biggest lead generator for real estate agencies. “Through massive branding and SEO spend, they manage to lure in most buyers in South Africa onto their portals, so if you want to compete in the market place, it is imperative that you have a presence on these two property websites,” he says.
Like many of the other top brands Tyson also lists properties on their own website, but says they continue to pay to list on these two portals because they are effective and do generate leads for their estate agents to work with. “It has also become important for sellers when selling their homes to sell their home with a real estate company that has a presence on these portals,” Pearson adds.
This is the experience of smaller estate agencies as well. Despite the expense. Matseleng Mogodi, principal of Snooks Estates in Gauteng, says their most expensive and most preferred portal is Property24 since it has proven to be most effective for their business because clients find it easy to use.
Property24 has had subscription price increases in some instances of between 50% and more than 300% over the last four years. This portal also has an oft criticised pricing system where agencies receive a monthly bill for ‘successful leads’ – every click on the phone number or email tab of an estate agent counts for a ‘lead’. Often the ‘real’ contacts from prospective buyers are far less than the ‘leads’ billed for.
The problem with a portal like Property24 is that it is owned by a listed company, so they continually have to find ways to improve on their profit margin explains Adriaan Grove, CEO of Entegral and owner of the MyProperty portal. However, there is limited scope with price escalations before your users reach a ‘tipping point’ and decide to leave to explore other venues. One of Property24’s most vocal critics have been Jim Alexander, Garden Route area manager for PropertyTime. Many emails of complaints later, Alexander this year finally removed their agency’s listings. The last straw was a ‘leads’ bill of R20 000 for their small agency of 60-70 agents. Going forward, Alexander says they’ve kept their listings with Private Property and are also experimenting on social media.
There are many other portal options to choose from such as listed portal IOL Property or independent MyProperty as well as many free portals of which the biggest is probably Gumtree (formerly used to charge a fee). On social media MarketPlace on Facebook is also getting good reviews.
According to Grove reason for the rapid expansion in the number of property portals lately is that it now possible to launch a portal quicker than ever with less funding. “The challenge remains in getting eyeballs to the site to deliver leads for agents. It is a chicken and egg scenario, because for any portal to succeed they first need the listings and agents will only pay advertising fees to portals who deliver leads,” he explains.
Grove continues that this is why many portals have gone free to attract agent listings. They rely on Search Engine Optimisation (SEO) and limited funding to try and gain traction. The effectiveness of the smaller portals varies. As Mogodi explains, they have supported some of the smaller property listing companies but some “never really worked”. However, she has also been surprised by the positive results yielded by some free portals that serve a specific geographical area.
Whereas it might be relatively easy to build and launch a portal it is hard to imagine such a portal getting the necessary traction to deliver leads without a massive budget to compete with the leading portals. “This is why Rebosa opted to support Private Property and why industry took up shares in the portal. Shares have now been made available to industry at large,” weighs in Jan le Roux, CE of Rebosa.
Grove’s advice to agents is not to put their ‘eggs in one basket’ and to evaluate the quality and quantity of leads they get. “One great lead from one portal is worth more than 100 poor leads from another portal. In the current market, most agents are struggling to get enough stock, so why not run laser focused social media ads that target your local neighbourhood,” he suggests. Golding says property portals may have replaced printed property listings to a large extent, but they are not “the be all and end all of property marketing by any means, but rather a single part of a diversified and comprehensive marketing strategy including social media, area visibility, show houses and local engagement with sellers and buyers to name but a few”.
Many of the top estate agency brands also have their own websites with property listings. A quick search on Google indicates some successfully achieve ranking among the coveted top five spots in the search results. Studies show that websites in the top spots get 36.4% more traffic than lower ranking websites. According to Golding at Pam Golding there are more sellers that begin to prefer the exclusivity of listing on the real estate franchise’s website. “We are increasingly finding that sellers prefer a strategic measured approach to listing their properties with an exclusive listing on the agency’s own website. This allows for greater exclusivity and a managed release in a controlled way consistent with our premium offering,” he explains.
For sale by owner
Both Property24 and Private Property have the option for private property sales. How do estate agents feel about that? According to Grove a survey he did showed that most agents think portals advertising FSBO is a slap in their face and undermines their professionalism. He thinks property portals can do more to educate private sellers about the risks involved with selling property privately.
There are many risks involved with the private online sale of a property. Estate agents are trained to navigate all the tricky aspects involved with the sale of a property such as setting the right selling price, vetting the authenticity of the prospective buyer and their financial ability to afford the property on sale and then there is all the administrative aspects that are legally required before a property transfer can take place. “There are so many intricate details that go into the sale of a home and with so much at stake, it is far better to list your home with a good agency,” says Pearson. No wonder, many estate agents say they are not that concerned about FSBO as private sellers soon discover that they would prefer a professional estate agent to handle all the mentioned intricacies. Mogodi says her experience is that most people want the guidance and expertise of a property practitioner, consequently their strategy is to provide the best possible service to their clients. Also, Van der Spuy says she doesn’t regard FSBO as a threat to the agencies that make use of those property portals as in some cases the private sellers will convert to agency listings.
Also read: Top 5 FSBO objections and how to respond
In the United States the biggest property portals such as Zillow have been tempted to get closer to the action and become directly involved in buying and selling property. Both Property24 and Private Property have explicitly stated that they will not follow the same route, so what will they do to increase their revenue stream? According to Grove he expects that they will continue to expand on the range of services offered to clients which already include photography services, premium listing spots, private numbers and even attorney assistance to private sellers. But eventually, we will just have to see what the future holds …