Real estate is a notoriously fickle business subject to the impact of the economy, fluctuating interest rates, market valuations and other external factors. It is not a business for the faint hearted and today’s estate agency environment is more competitive than ever.
“Since real estate went largely online, agents face some old challenges as well as some new ones,” says Lynne Krawchuk, CEO of Under One Roof, a technology-driven property listing platform designed specifically with real estate agents in mind, which offers solutions that address some of these key challenges.
In order better to meet the needs of local real estate practitioners, Under One Roof canvassed a number of agents and found that the major obstacles to optimum profitability are the dominance of major listing platforms, FICA and other regulatory and compliance requirements, the current market downturn, and financially constrained buyers.
Online listings
Standard online listing platforms, while making properties more accessible and visible to a larger market, erode agents’ revenues due to the high cost of placing a home or commercial building for sale on the sites. Especially for smaller agencies, the costs of covering all bases on the dominant platforms can be prohibitive, and if the listing is not exclusive, differentiating one post from another can be a significant challenge. One agent told Under One Roof, “In terms of revenue, these platforms definitely contribute to exposure, but the ROI isn’t always proportional due to the listing fees.” For small agencies, promoting stock via these channels is unsustainable.
FICA compliance
For smaller agencies who do not have administrative support staff, completing and compiling all the documents required for buyers and sellers to be FICA compliant can be laborious and time consuming. If clients are not up to date with what they need, the process can go very slowly and this can delay completion of a transaction and payment of commission to the agent. Said one response, “There are no short cuts when it comes to FICA compliance and so there are often delays in the finalisation of a sale.”
Market conditions
South African estate agents are facing a slow real estate market, with fewer buyers willing to extend themselves and fewer sellers willing or able to take a loss on a property bought during more buoyant times. “High interest rates and inflation are obviously shaping buyer behaviour and impacting sales volumes,” said one agent. Properties are taking longer to sell, and sellers are having to revise their prices downwards, all of which impacts on estate agents’ earning capacity.
Cost-conscious clients
Both buyers and sellers in the property market are looking to minimise costs where they can, including negotiating estate agency commissions and related fees. Agents are having to be more flexible in order to secure a listing, especially if they are looking for an exclusive mandate. For agents working in the current market, it’s about navigating their challenges as efficiently as possible to make a sale. “I need to bring the best value to my clients in terms of marketing, careful negotiation and to close deals as quickly as possible in order to keep my turnover up,” reports one of the canvassed agents.
Under One Roof offers agents a number of solutions to mitigate the current downturn and difficult conditions in the local real estate market.
“By providing user-friendly tools and personalised support, Under One Roof empowers agents – particularly small and medium-sized agencies – to compete more effectively, by streamlining their operations, and enhancing the client experience,” says Krawchuk.
“It’s not just a listing service but a partner that helps agents navigate the complexities of today’s real estate landscape, ensuring they can focus on building relationships and closing deals,” she continued.
Under One Roof also assists agents in the administration of a sale, including uploading all FICA-related documentation and handling some of the verification process. For the cost-conscious buyer looking for the best home loan deals, the platform provides a service that will source bond origination and bridging finance if it is needed.
Krawchuk warns that the local property market is likely to remain challenging for the foreseeable future. With the introduction of their innovative property eco-system, Under One Roof is helping the sector with its digital transformation, offering value-added services to agents, buyers, seller, renters and landlords in a single resource-rich hub.
