And You Thought Zillow Was a Challenge…
Whether you’re a real estate company, broker or agent, you’ve surely heard rumblings about the effectiveness of using Zillow as a tool to support your business. With more than 110 million homes listed across the United States, Zillow is certainly a successful and popular listing tool, but it’s not without issues. Stories of inaccurate zestimates and weak leads among other issues seem to be recurring discussion points since its inception in 2005. While Zillow.com and Realtor.com are among the most popular property search websites in North America, in international markets it is portals such as Rightmove.co.uk, Idealista, and ImmoScout24 that dominate. Although the largest portals share many of the same challenges as Zillow, their business models coupled with the unique characteristics of international real estate, exacerbate these challenges and introduce new ones.
Here are some of the most significant challenges with international portals:
Listings – Low Quality, Duplication + Are They Even Available?
In the wild west of international real estate, there is little industry regulation, open listings are the norm (approx. 80-90 percent of markets), agent training and certification is a rarity, and just about anyone can sell a home. It is common for both sellers and the untrained agents whom he/she has solicited to find a buyer, to all list the same property on a portal. Unfortunately, this can cause considerable confusion for buyers who are exposed to multiple instances of the same listing with varying and sometimes conflicting information. It is not ideal for sellers either, as it requires them to waste time correcting misinformed callers.
To make matters worse, very few international portals have processes in place like Zillow to identify when a property is sold. The listings are not updated like they are in North America. As a result, interested buyers are often calling the contact info. on a portal listing and being told that the property had sold months ago. Since a popular pricing structure for portal listings is a per listing per month fee and listing volume attracts advertisers and consumers, one could argue that removing duplicate, expired or sold listings is not in a portal’s best interest from a revenue perspective. Their goal seems to be quantity over quality with little incentive to develop automated processes to identify or take down duplicate, expired or sold listings. The consequence is unnecessary costs and an inefficient and often frustrating experience for those using the service.
The largest portals are powerful media companies who invest heavily in marketing to create and sustain consumer demand. Core to their value proposition is the sheer size of their listing inventory that they advertise broadly. However, with duplicate, expired and sold listings within the mix, the number of actual unique and available properties may be far less.
High Fees – Consider the Opportunity Costs
As a region, broker or agent, using portals to market properties can quickly monopolize and exhaust a listing marketing budget. Considering that the typical fee structure is based on the duration of listing display, that the average Days on Market (DOM) in some countries can be upwards of 12 months, and that there could be three or four portals that your client wants you to list their property on, the cost to promote a single listing can be very expensive. Furthermore, unless you have subscribed to a syndication system to automate updates, it can take considerable time to update these portal listings every time there is a change. Given that the average commission earned by agents in Europe is significantly lower than in the U.S, this is valuable time and money that could have been spent elsewhere to grow the business.
The high listing fees of most European-based portals can result in large brokerages paying thousands of Euros per month to list properties and since the demand from sellers is so strong, brokers feel like they have no choice but to pay. This is comparatively a far greater investment for brokers and agents than Zillow, which charges for leads, but not to list.
One Stop Shop – The Amazon of Real Estate
The largest international portals can be likened to the Amazon of real estate – it’s an “everything” store. In contrast to Zillow, which is exclusive to the real estate industry, many international portals service multiple industries. You can often buy a house, rent a car and find a new job within the same portal.
On the one hand, this one-stop-shop model has an advantage over Zillow, as it can create demand and leads where there might not otherwise have been any by exposing visitors to listings who were coming for another purpose. On the other hand, with divided expertise and resources across the industries they service, the development of real estate specific features and processes to support an easy transaction may be compromised. Also, visitors who are browsing homes may now be subject to up-selling and cross-selling of products and services from other industries. This unsolicited engagement may dissuade repeat visits.
International portals make and play by their own rules. The general lack of real estate associations, cooperation, and enforceable law in international real estate has allowed them to grow largely ungoverned. This is quite different than U.S.-based portals, where they rely on MLS data and are required to adhere to laws and policies. Internationally, the lack of regulation within the industry has enabled portals to grow and expand to the massive enterprises they are today without barriers.
Competition – A Threat to Your Value Proposition
A portal in many ways competes with both the brokerages and agents who use it and the brands they represent.
As an agent, portals can act like a competitor from a lead generation point of view. Some portals do not allow listing agents to promote themselves on their listings, while others do not allow any branding whatsoever. These portals then advertise this unbranded listing inventory through traditional media channels and online to capture leads. This competes with the listing agents’ own marketing and advertising efforts to capture leads for the same listings.
As a brokerage, agents who use portals regularly may question why they should pay a broker’s desk/service fee and share their commission when they feel that their needs are already being met by the portals who offer similar services, e.g. marketing, lead generation. These agents may also be unwilling to double enter their listings on the brokerage website which can then cause online competition for listing views between the portals and the brokerage website.
As a real estate brand, this dilemma is multiplied as they may have both agents and brokerages questioning the value of the brand’s value proposition. Brokerages may question why they are paying franchise fees when their agents are generating leads from the portals directly. Plus, some larger regions have leveraged their scale to negotiate attractive lead generation discounts with portals that are either on par with or preferred over what they are getting from the brand. These negotiated discounts act as an effective recruitment and retention tool for regions, which can be difficult for a brand to displace.
Don’t Give It All Away
As a region, although portal listings may seem to be a necessary tactic to meet local demand, I encourage you to consider your long-term strategy. Listings data is arguably your most valuable asset and the cornerstone of your business. Should you really give it all away and be charged exorbitant fees in the process? Here are three questions to think about:
1. Are there alternative solutions which would allow you to retain your data and better serve your clients?
The PropTech Solutions platform has hundreds of thousands of registered buyers from all over the globe. Agents who use the built-in Buyer Match and Property Match tools can provide exceptional value to their seller customers by automating the matching of the best buyers for their properties. They can also provide exceptional value to their buyer customers by matching their property preferences to the expansive new listing inventory added across the platform.
This can be achieved quickly, with little effort, and often results in a better price. Most portals do not provide this.
2. Could you turn a seller’s request for a portal listing into an exclusive listing opportunity?
Consider educating the seller on the benefits of an alternative listing strategy. In exchange for the exclusive right to list the property, agents can offer to find a buyer for the property through PropTech Solutions’ vast inventory of active buyers first, before advertising it on the portals. If no match is found after a short period of time, the agent can then leverage PropTech Solutions’ listing syndication features to promote the property on multiple portals, manage the listing updates, manage all related communications, and then remove it from the portals once sold.
The benefit for the seller is that they need to only deal with one agent, they don’t need to respond to consumer inquiries, their listing is exposed to the largest possible network of professional agents, and they’ll increase the likelihood of getting the highest price as prospective buyers are no longer able to play agents or an owner off one another. It’s a win- win!
3. Can you negotiate with the portals to mitigate lost value?
You don’t have to give portals all of the same listing information that you display on your own website. Consider ways to strategically limit the information that is sent to portals, and at the same time, increase region, office or agent branding on the listings to improve your market awareness. Then, discuss ways to direct lead traffic back to your website. This will establish your website as the go-to source of complete and quality information compared to the messy data consumers often encounter on portals. Further, backlinks from the portals to your website will support your site’s search engine optimization and improve lead opportunities.
The power of portals is undeniable. Instead of surrendering to the current model, think outside the box and think big picture to discover alternatives that will lead you to greater long-term control and growth. I welcome the opportunity to talk with your company about how to best overcome these challenges.
About PropTech Solutions
PropTech Solutions Inc. is the holding company of leading global real estate companies, GryphTech and Phoenix Software. They offer lead-to-close real estate management solutions to global real estate companies, i.e. RE/MAX, Keller Williams, Coldwell Banker and ERA, to help accelerate their growth. The technology is designed with flexibility at its foundation to support a wide array of global requirements and is configurable to meet each customer’s unique local market needs. It is easy to use, cloud-based, mobile-friendly, multilingual, and multicurrency, with powerful tools to facilitate cooperation and lead generation. Frequent platform enhancements and integrations with best-in-class services such as DocuSign, WhatsApp and ListGlobally ensure its global customers have all the best tools available to be successful. In August 2019, PropTech Solutions was recognized as a 2019 Top 10 PropTech Solution Provider by CIO Applications Europe.
Visit gryphtech.com and phoenixsoftware.ca for more information.
About Carlos Matias
Carlos Matias is the Founder & CEO of PropTech Solutions Inc. With 20+ years of serving real estate businesses in over 60 countries, Carlos has earned a reputation as a visionary leader and authority on global real estate. His unparalleled expertise in international real estate has earned the trust of the world’s largest real estate brands.
Carlos, a member of Peerscale and FIABCI, is frequently solicited for his advice and insight by industry leaders with whom he has long-standing relationships. Together, they make and influence decisions which shape the industry. Having traveled to over 50 countries, Carlos has spoken at countless industry events to inspire others and is an active participant in global industry and customer events. Carlos is fluent in English and Portuguese and divides his time between homes in Toronto, Canada and Lisbon, Portugal.
One of Carlos’s primary goals is to encourage and facilitate greater cooperation throughout international real estate at all organizational levels to generate new opportunities. The fact that more and more international franchises and large real estate companies use technology provided by PropTech Solutions make this possible.
Learn more about Carlos Matias at proptech-solutions.com/carlos-matias