There is no denying that consumer behaviour drives business relevance and sustainability – and this is no less true in real estate. Innovation is key to providing consumers with alternative choices and this is exactly what the fixed fee model offers. Real estate agencies that can integrate efficient tech solutions with appropriate service touchpoints, expand the array of choices available to homeowners when selling their homes.
The debate around the sustainability of the fixed fee, tech-enabled estate agency model appears to be more influenced by the existing agencies in favour of the higher, variable commission model than the consumer who is benefitting from a differentiated service and fee structure. It’s hard to fault the real estate alternative that uses technology to drive down operating costs and improve the consumer experience.
It goes without saying that new business models need to prove themselves over time and that the fundamentals of running a sustainable business apply. New business models naturally evolve as they adjust to market demands and consumer response. Some may even fail if they are unable to adapt quickly enough. Adapting to the market and consumer demands in conjunction with good strategic choices and execution are prerequisites for sustainable success.
Insofar as fixed fee real estate service providers are concerned, just as there are different business models among the traditional agencies, there are too, different fixed fee business models. A fixed fee offering is simply the price a seller will pay but it does not speak to the other attributes of the offering which need to be considered before selecting a fixed fee agency, for example, simplicity, transparency, customer service, professionalism and experience.
The fixed fee category in real estate has emerged internationally and is driven by the consumer demand for more transparency, faster turn-around time and better value. International agencies were quick to acknowledge the consumer’s demand for change. Purplebricks in the UK is one such real estate company who, despite their exit from Australia and America – where it appears the business strategy was misaligned with the local property market – continues to be the leading UK residential estate agency with impressive growth and earnings.
In its relatively short three years, Purplebricks has grown significantly to become the number one estate agency in the UK and continues to grow with EBITDA already at 11% and anticipated to be at 25% - 30% at scale.
In terms of the South African property market, the consumer’s attitude has also changed and continues to change; hence, the emergence of multiple alternative models.
The ability of a service provider like Eazi to charge a low, fixed fee derives from several factors. Most importantly is the utilisation of technology to create a seamless, predominantly automated, online platform that in turn delivers the essential components of an efficient, cost-effective model focussed on the consumer’s needs. This includes increased agent productivity, centralisation of specialised resources, economies of scale, shorter listing to sale timeframes, higher average price realisation, data-led continuous improvement and dependable service delivery.
The business is then able to pass on the reductions in operating costs and improved productivity to consumers in the form of a lower, fixed fee of R39,500 including VAT with no hidden costs. Furthermore, once the sale has concluded, the lower fixed fee ultimately saves sellers thousands in commission costs they would have paid for a traditional estate agent service. The Eazi fixed fee offering is currently only available in most of Cape Town and parts of Pretoria but will be expanding into other areas in the near future.
Eazi has built its business model by gaining a clear understanding of what the consumer needs are in the residential real estate market in South Africa. Issues like transparency, consumer-empowerment, simplicity and trust are the bedrocks of the model. Furthermore, the consumer-centric and tech-enabled business model has been significantly informed by established real estate professionals. The management team of Eazi has more than 35 years combined experience in residential real estate.
The result is a unique real estate offering that combines innovative technology with a professional, interactive service that provides consumers with an alternate, more efficient and cost-effective real estate service.
Eazi, simply a better way to sell your home.
By Richard Day, CEO of Eazi
This post and content was written, sponsored and provided by Eazi.