Will FNB kill off the estate agency business
On Wednesday 31 October 2018 FNB dropped a bombshell when it announced a new addition to their banking app that allows clients to list properties on their Nav Home Feature. Prospective Buyers and Sellers can talk to each other via the chat function in the app to arrange a viewing or negotiate price. FNB also helps with determining the selling price by offering a free value estimate for the property. FNB clients who use this feature will be able to view similar and current listings in their area.
Buyers are also able to request a pre-approval home loan through the app and a standard Offer to Purchase document is available through the app. The head of FNB Retail, Raj Makanjee says “We see a significant opportunity to become a game changer in the property industry”.
One can instantly see the value-add for buyers and sellers.
Naturally, this development has got estate agents in a twist. The Private Property Practitioners Facebook Group is full of indignant posts from agents threatening to boycott FNB and some are even concerned that online pro Private Property may be offering listings to the app.
The truth is that the real estate industry has been under siege for a while. Attorneys selling houses for 3% and online portals have been their main gripe. Even Andrew Golding announced the purchase of online portal EAZI.com not too long ago.
The truth is that FNB isn’t the bad guy here. The world has changed and technology has challenged existing business systems. The music industry went through a fundamental change not so long ago. Long gone are the thousands of square meters dedicated to music stores in shopping malls. This industry also battled with change. The music industry initially started suing kids for downloading illegal music but we all know how that ended. In time musicians started giving away their music for free on YouTube and raked in the money by singing for their supper once again. iMusic, Napster and others stepped into the void with new business models that made sense to consumers.
The shock for agents is that they didn’t see this coming. Their eyes were on traditional online portals such as Property Fox. At the recent Inman Real estate Conference held in San Francisco, ~South African Agents got a glimpse of the future. By and large, agents work hard. There are around 43000 registered agents chasing 22 000 sales a month. Of these sales around 8000 a month are in the R800 000 bracket and above.
Now whether the FNB APP will gain traction or no, is not certain. But what is certain is that the current estate agency model is under siege. Estate Agents need to use this crisis to take stock and to change the perceptions that people have of them. Agents need to reevaluate their position in every aspect of their business in order to survive.
There will always be room for the agent to hold the hand of the clients, there is no doubt about that. However, the FNB move, the online agencies, and the attorneys are all eroding the pie. To survive, agents need to reinvent themselves and start building bridges of trust. One way is to recommend independent home inspections. A HouseCheck is after all the only way a buyer can protect themselves from a system that is stacked against their interest.
By the way, HouseCheck also has a policy of sharing its reports with the agent involved with the deal. This increases transparency, fairness and builds bridges of trust between the agent, the buyer (who normally pays for the report) and the seller.
Through Housecheck, a number of these forward-thinking agents are already doing so.
We salute them, not only for the business it gives us but for the peace of mind it gives buyers and sellers.
The cynical amongst ourselves may want to believe that the agents who routinely recommend HouseCheck are just protecting their self-interest. However, our information is that these progressive agents are all considered to be at the top of their game with higher than average sales.