What the Real Estate Pundit is doing next.
When I started writing under the Real Estate Pundit pseudonym, I was in mourning. My start-up was in a coma. I needed a solid break from it. There could be no lingering feelings. I had to let go and move on.
But I didn’t want my mind (and contact book) to atrophy. So I started writing, teasing people that I knew were cool but working on start-ups that just weren’t going to succeed and of course gave myself breathing room.
That is until Sebastian Powell came along with GetAgent. It wasn’t so much the idea, but him. The guy has a full time job, yet was working pretty much full time hours outside of work to get his start-up to succeed. It’s so cliche, but he has that ‘eye of the tiger’.
A month later and we have a team of four pushing GetAgent live onto the internet. I couldn’t help but dive straight in. The opportunity is just too large.
Why did I choose to join GetAgent? While every other ‘entrepreneur’ focuses on the pains of the demand side (buyers and renters), the smarter people in the industry understand supply controls the market. And no-one, at present, controls supply.
Rightmove (and to some extent Zoopla) control demand. There are some great niche businesses on the demand-side, like Spareroom and FindProperly. But they’re not going to change much, for their founders or for the market, no matter how cool or useful each of them are to consumers. And they are. Very cool, very helpful. But they make so little money in return for all that effort.
Controlling the supply side of real estate is everything. Rightmove dominates, as a brand and a business, the UK residential property scene. This market is worth £6bn of estate agency and lettings agency fees per annum. Yet Rightmove only made £140m last year. Sure it is growing revenues at a not-to-be-scoffed-at 20%+ a year, but it should be making more.
Let’s add a little more perspective: Rightmove controls the demand side of an agency business in the UK. It’s all you need. Sure the more established agents have good word-of-mouth referral traffic, but even they need Rightmove.
So Rightmove is ‘needed’ by all these agents. You’d think Rightmove would be holding them to ransom and a major operational cost. But no, it costs less than half a member of staff at an average of less than £700 per month (per agency branch).
And there’s good reason why Rightmove cannot make more money: property owners aren’t monetised by Rightmove.
New instructions are the lifeblood of an agency. It’s easy to sell a home (by finding buyers through Rightmove and referrals), but completely uncertain a process to find property owners. How does someone choose one agent over another? All agents look the same, sound the same, pitch the same, market property the same way. Even their websites look clearly like (crappy) estate agent websites. Except Foxtons.
You’d be forgiven for thinking Foxtons dominates the London property market, with their aggressive sales tactics and ever-present branded Minis on the streets. They control less than 6% of listings in London. But that’s the beauty of Foxtons: they appear bigger, and better, than they actually are. They ‘get’ what drives property owners, and their marketing is solely targeted at winning new instructions.
This statistic, by the way, comes from GetAgent’s data. We publish league tables of estate agent performance. For those who still cannot decide on an agent to sell their home, we auction their business to local agents and provide the property owner with a cashback incentive.
And that is why I am so excited: Last year there were 1.1m homes sold in the UK, almost all facilitated by an agent and very many of them choose an agent absolutely at random.
There is no norm in choosing an agent, like there is for buyers and renters to go to Rightmove (or Spareroom). Just like only a few years ago insurance comparison sites didn’t exist, but are now absolutely normal, we think GetAgent will set the standard for how someone in the UK will choose an agent to sell their home.
I previously featured agent finder services in the US, like LessThan6percent. But their focus on (lowering) fees is, in my opinion, misguided and will be a failed value proposition. They’re smart guys though, they’ll pivot and find a model that works in the US. Well, unless GetAgent beats them to it.
Our USP is that we ‘get’ people find choosing an agent difficult. Whatever they are paralysed by, we ease their fears with agent performance statistics and grease their decision with cash. They GetAgent, because we get them.