Agent develops property app

A Nelson entrepreneur has launched a new pre-market property app which he says could save vendors thousands of dollars in real estate agent commission payments.

Green Door real estate agent Mike Harvey launched the Yelsa app near the end of April, with about 400 vendors and potential buyers having already signed up.

The app works by using an algorithm to match prospective buyers with vendors, based on their search criteria, and would give buyers early access to properties before they go on the market.

Harvey said the new model meant homeowners could be put in direct contact with prospective buyers, and could prequalify buyers by inviting only those they select to view the house or make their profile public.

‘‘This product brings in technology to reduce the cost of sale, which is huge.’’

‘‘[Technology] reduced the cost of staying in accommodation, reduced the cost of travelling in a taxi, and reduces the cost of paying for real estate.’’

He said the traditional method of marketing homes carried some inherent flaws, as multiple owners could all be paying fees to attract the same potential buyers

Nelson real estate agent and entrepreneur

to the same street at the same time.

‘‘This creates a high level of duplication and wastage and only adds cost to the property sale for both vendor and purchaser.

‘‘Under the new model, buyers will have direct contact with vendors who are prequalified based on their specific criteria which means owners will know whether they are preapproved, have pets or just need somewhere to park their boat – all before they see the property.’’

Harvey said vendors would pay a one-off $500 fee and could then invite an unlimited number of potential buyers to view their property profile.

Real estate agents could also be brought in at any stage of the process – although at a reduced commission fee of 1 per cent.

Harvey said he expected the app to be popular with some real estate agents, despite the lower commission. The pre-prospecting aspects of the job could be very time-consuming and often unprofitable, with the app allowing them to conduct a higher volume of sales.

Harvey reckoned if the app took off in the marketplace, it could save hundreds of millions of dollars in commission fees every year.

He estimated around 115,000 properties were sold in New Zealand each year with an average commission of $38,000 – netting real estate agents an estimated $4.3bn in commission annually.

Real Estate Institute of New Zealand chief executive Bindi Norwell said with the development of new technologies and apps, the real estate profession was one that was constantly evolving.

Norwell said the Yelsa app would likely appeal to a certain niche of customers.

‘‘For those looking to sell their house ‘off book’ due to their personal circumstances or just not wanting the neighbours to know their business, this sort of app could work well.’’

However, she said it was worth noting that property data research showed people using real estate agents tended to sell their houses for more than they would privately.

‘‘Those who use an agent can receive around 10 per cent more for their property even once the commission is taken into account.’’

‘‘This product brings in technology to reduce the cost of sale, which is huge.’’ Mike Harvey