Selling homes online, a new approach…

In yesterday’s post I raised the topic of an effective online home sales portal and its potential impact on traditional Australian residential agency. So far we’ve seen some attempts to crack the market (,,… etc.) all of those listed here taking the low-cost / no agent approach. But what if there was a model that incorporated the best of both? A combination of low-cost sales and management portal with a full service agency…

Here we take a paradigm shift on how we currently see two diametrically opposed approaches to selling online. In order to approach this I suggest the manner in which the transaction takes place be viewed differently, what if the agent was removed from the listing and negotiation aspects of the process and replaced with an online mechanism that processed new stock to market and coordinated and concluded purchase or letting?

Now before those in the industry cry heresy, let’s re-consider those shifts in other industries like retail and financial services. All consumer driven. Successful business models facilitate markets they don’t necessarily set out to create them. (Apple we are looking at you….)

So here’s some food for thought, what if I could say purchase a home by reviewing all the relevant stock on the market be directed to appropriate information and inspection arrangements to be overseen by an ‘on-the-ground’ agent whose role is limited to coordinating access and the distribution of information. Final negotiation and agreement is facilitated online with a transparent, safe method and a range of ancillary services (insurances, removalists) are made available to choose from.

As a seller going to market I choose from a selection of marketing options, complete all the necessary contractual requirements am advised of my ‘on-the-ground’ sales agent who will be responsible for coordinating inspections. Buyer feedback is then fed through in direct report including contract and building requests keeping me up to date of my sale or letting activity via online automation. Final negotiation is transparent and safe. At the conclusion of the sale my ‘on-the-ground’ agent takes care of the transfer of access while I choose from a range of ancillary services to enable the move.

So there you have it, a potential sale and management tool that combines elements of the existing models. So what’s stopping it from coming into play? Here are a couple of hurdles;

  • Consumer perception of an impersonal transaction.
  • Traditional agency and franchise reluctance to embrace change.
  • Larger online media vested interest.

Now the model suggested does step well outside the way agencies in Australia currently operate and there certainly doesn’t appear to be a franchise bold enough to move outside the confines of their existing business models. So where, or more importantly who will be the one to pursue something so ‘outside-the-box’? Any thoughts or feedback would be appreciated….


Can the Internet Kill Residential Agency Practice? – Part 1

Internet killed the agency star…

With an estimated 3 billion new users coming online in the next 7 years the sheer magnitude of numbers and its impact on what we could describe as the cornerstone for Australian residential property, traditional agency practice, can be hard to fathom. If we consider the impact already experienced by larger players in the retail and financial services sectors the outlook looks mixed. Whilst consumers have embraced openness and transparency in the online sphere smart business is identifying gaps in the transactional process. Can ‘bread and butter’ agency players handle the same change in consumer behaviour?

In this post, the first in a series, I’ll explore the case for an online selling portal, outline the pro’s and con’s and offer a prediction on the likely selling and management options in the very near future.

So what could be behind a shift for consumers to embrace an online home sales or management solution? Here are my suggestions;

  • Simplicity
  • Cost
  • Transparency
  • Control

And what might be the reasons not to choose an online sale or management option?

  • Untested method
  • Impersonal transaction
  • Security of transaction

It’s interesting to note we can begin to identify parallels between the fors and against that can go through the mind of home sellers and buyers that could have been very similar to those encountered by other financial service and insurance industries when they first considered a purely online service option, the likes of ubank, bankwest, ing direct, canstar, rabodirect, rams, easystreet (search for online savings account you might see a pattern forming here).

It was in 2001, pre-dotcom bust, small moves were being made by online financial services companies like David Koch’s My Money group to provide comparison sites that linked financial services to potential clients. Looking back on the evolution of these sites we can see the expansion of major financials into the arena taking a much more pro-active approach to online activity. Is it possible the major real estate franchises could take this step and evolve their current business model?

Certainly the world has changed since 2001 so it would be naive to think if two such significant industries, retail and financial services, can be impacted by consumer behaviour residential real estate practice won’t feel greater opportunity to offer a more significantly online based service to an increasing web educated buyer and seller population.

My humble prediction on the future of residential agency in a more digital age? A refinement in day-to-day operation pursuing economies of scale with a greater emphasis in online presence as opposed to on the ground community branches, a transactional model purely online without elimination of tangible inspection options backed up by a suite of options enhancing consumer choice.

Next time I’ll take a closer look at exploring the consumers’ choice of online agency of the future, in the meantime I appreciate your feedback….

For baby boomers ‘fear’ wins.

This will seem simplistic and controversial but it’s time we faced up to a demographic reality, for our aging population an unavoidable psychological state has become overwhelmingly prevalent, the cup is now half-empty. Journalistic commentary via the major financial media sources can be split into two camps the fear camp, predominantly those representing the baby-boomer generation, and the optimists, being the Gen X, Y and now Z’s. As one commentary we crossed recently put it, it’s created a financial situation where those in the baby-boom generation (the holders of majority of major assets) are developing a concentrically smaller mindset in terms of wealth whilst those in the younger generations simply do not have the financial clout to overcome a disproportionate distribution of assets. In simple terms there are those that can’t afford to sell and those that can’t afford to buy. An economic impasse is the consequence. Can the reality of this demographic psychology be ignored? Of course there are exceptions to the journalistic encampment rule (Ross Gittins of the SMH we are looking at you). However, true innovative thinking, be it financial or social, won’t flourish when oppressed by ageing conservatism. There is no place for global economic naivety, in going on five years Europe has failed to adequately address it’s problems, America’s recovery remains tentative and China’s growth has necessarily slowed. But our own growth and resilience as an economy is being hampered from within. Is it time the older generation reassessed their stance and question their legacy? Is this necessarily a new phenomenon or magnified by our populations weighting? Should we be surprised that the middle-class is predicted to continue to decline? Of course time will tell.

Adam Carr – “even the English are referring to Australians as ‘whinging Aussies’.”

Brilliant article from Adam Carr highlighting the disparate nature of our sound economy and the morbid need for gloom. While an interest rate cut could well see overall confidence drop further once again we wonder just how long and how much larger an event will it be to trigger a change of leadership in government consequently allowing the turn of sentiment, something so many are crying out for. More…

Take a closer look at Sydney falls.

Yesterday’s much publicised May housing figures for Sydney supplied by RP Data and handled as delicately as only our media know how (Ed: The only thing Channel Ten had missing was a reference to the forthcoming apocalypse as predicted by the Aztec calendar) deserve some greater review. Thankfully Cameron Kusher has provided his take on the figures noting “the biggest house price falls in Sydney last month were at the prestige end (down 6.4 per cent), which dragged the rest of the market lower. The most affordable 20 per cent of houses actually rose slightly, while the middle 60 per cent fell by 0.4 per cent.” Thanks for the clarification Cameron. More…

Buyers on Green Light.

With the NAB revising its June assessment of the RBA’s predicted movement, indicating a reduction in the cash rate, and Bill Evans from Westpac now predicting rates will hit record lows by the end of 2012 (try 2.75%), investors and first home buyers have been given a green light. Add to this changes in lending criteria from banks which now take into consideration casual and secondary incomes when assessing mortgage applications and you have a primed demand equation as we progress toward Spring.

Chatswood sale has agents saying ‘WTF just happened?’

Peter Chauncy from McGrath has been left stunned (Ed: and no doubt created some very happy vendors) when on the fall of the hammer the conservation zoned single level residence in Blakesley Street Chatswood sold for $2.2 million on Saturday. Expectations had been around $1.35 million but in bidding increments as high as $60,000 these were smashed. Highest street price had been suggested just shy of $1.5 million previously. Sydney’s weekend preliminary clearance rate has been recorded by APM at 57%. More…