New bank app cuts out estate agents entirely
● The real-estate industry, like other sectors, has been disrupted by the new economy — but in FNB’s recently launched online platform it may have met its biggest challenge yet. The platform enables customers to list and sell their homes to each other, cutting out agents entirely.
Estate agents have long played a critical role in helping buyers find the perfect home and sellers make the best sale, while pocketing hefty commissions.
FNB, owned by FirstRand, said SA had more than 8-million properties registered in the deeds office.
Marius Marais, the bank’s head of secured lending, said the bank used the Financial Intelligence Centre Act process and a panel of conveyancers as part of its checks and balances to ensure that buyers and sellers comply with legal requirements.
Marais said FNB uses its app to appeal to the significant youth demographic, which values ease of use and convenience.
He added that the bank had about 3-million users on its banking app, with a million of its customers being homeowners.
The property market on the whole sees 25,000-30,000 transfers a month, a piece of which FNB hopes to capture.
However, the innovation has caused some friction between FNB and the property industry, with Marais saying the bank had been fielding many calls from concerned property agents, prompting the bank to set up meetings with them next week.
He emphasised that FNB’s decision to launch the app had nothing to do with killing off the industry and was rather about providing more options to customers, many of whom prefer to stick with agents rather than using the app.
Ted Frazer, national marketing manager at Seeff Properties, said a tough economic environment in which the property market was down as much as 30% year on year, has seen new entrants disrupt the market with low commissions and fixedfee business models.
“We do not see these new entrants as a threat, but as an opportunity. There will always be those segments of the market that are confident enough in their ability to manage their own transactions, and platforms such as online agencies or the new FNB offering.”
He said FNB’s app would perhaps have some appeal to these customers, but such customers are likely to remain limited in number and therefore of no real threat to the market.
Frazer said much like the many new technology-focused estate agencies that have entered the market in the past two years, FNB’s offering was likely to attract some business but unlikely to offer real disruption any time soon.
In the meantime, it was business as usual for Seeff, he said.
However, its lack of clarity on how it will ride the wave of digital disruption could prove to be a challenge.
Marina Constas, property specialist and director at BBM Attorneys, said established agencies would feel the impact of new players coming into the market with fixedcommission structures and strong digital strategies.
Constas cited Cape Town-based online digital estate agency Eazi.com as one such example.
The company promises its clients everything a traditional estate agent does and more, for a flat fee of R29,500.
“Agents need to embark on a journey of self-reflection. They need to listen to what their clients want, and hop on to the technological bandwagon. Those who haven’t have already fallen behind,” said Constas.
She added that agents still have an important role as transferring property can be complicated, with many aspects that can go wrong. Agents can usually guide customers past the pitfalls that may jeopardise sales.
Although she lauded FNB’s move, Constas
Of the bank’s 3-million banking app users, about a million are homeowners
Agents need to listen to what their clients want, and hop on to the technological bandwagon ... or fall behind
Marina Constas
Property specialist at BBM Attorneys
said that the bank risked losing estate agencies’ business by encroaching on to their territory.
Eazi.com has been so successful that renowned agency Pam Golding Property Group bought it in August.
At the time, group CEO Andrew Golding said the two aspects would coexist: Pam Golding with its focus on the traditional business strategy, and Eazi.com separately branded and managed.
Pam Golding also this month announced a partnership with BidX1, a digital property auctioning platform that is disrupting the market in the UK and Ireland and is set to do the same in SA.
For those inside and outside the property industry, it is clear that a shift in buying trends is happening. Heeding the lessons of Kodak and the digital camera in the 1990s, no-one wants to be caught napping.