The start of a year is not just about broken new year’s resolutions, its also a time when home owners who intend selling their homes start planning and researching.
The first and perhaps most important questions that arise are; what can I sell my property for? And, how can I be sure I get the right price?
Property upstart Eazi.com think they’ve found the solution, we caught up with their CEO, Shaun Minnie.
How have things gone since we last chatted ? Has your disruptive model attracted any reaction from the industry? (Eazi.com sell a home for R29,500.00 instead of the normal commission of 5-7%).
It’s gone really well thanks, we’ve been very busy. Our fixed fee has certainly caught the attention of both consumers and the industry. You can see it on our FB page, the public loves our concept and has been very supportive, but traditional estate agencies have been less enthusiastic.
What do you mean by “supportive”, are you making sales?
We sure are, we’ve listed over 300 properties in Cape Town and sold many of these. In fact, in the last week alone before the holidays, we sold 12 properties between R600 000.00 and R6 500 000.00 and saved those sellers more than R1 500 000.00 in commission.
That’s a significant saving. Let’s talk about establishing the right sales price - how is it currently done?
Most people would start by doing some research on property portals like Property24 to see what comparable properties in their area are selling for. Traditionally they would then call an estate agent to do a valuation of the property, but this can be problematic. In order to secure the mandate properties sometimes get over valued and sellers get locked into long sole mandates.
I can see why a low valuation would be bad, but is a higher valuation really a problem? Surely if you start high, you end up with a higher selling price?
No, it is likely to end up costing you money. Overpriced property gets ignored by buyers at the time when it has the most impact - when it's just been listed. The long time-on-market and inevitable price reduction that follows overpriced listings creates a unfovourable impression of the property. This negatively effects the sale price you eventually achieve, and can result in the property selling for less than the actual value. It’s natural to favour the person that tells you your home is worth the most. So it’s tempting for some estate agents to over-price property to secure a sole mandate, only to then have to reduce the price as weeks and even months tick by without a sale.
So how do you avoid this, and ensure your property is priced right?
The principal is simple, the actual value of a property is what buyer’s are willing to pay for it, not the price tag of the property.
In practice, the efficacy of our model to derive the true market value of a property has amazed us more than anything else in the business, so far.
Essentially it comes down to these two things:
Firstly, establishing the right price band: With a little online research on the portals, buyers and sellers are now able to form a fairly good idea around the value of property in an area by looking at the for-sale prices for similar homes. We then added the corrective balance by publishing the actual sold prices for the last 12 months on our site. By combining this data sellers can get a good idea of the price band of their property. We review the same data, then agree the ideal listing price with the seller.
Secondly, creating a transparent marketplace: The real revelation in determining market value has proved to be our online offer system. We found that when sellers offer their property for sale in the right price band, the offers that come in through our transparent offer system actually determines the best value of the property at that point in time. In many instances the offer that finally gets accepted by the seller is higher than the listed price, because that’s the actual market value.
So you don’t accept the first offer you receive through your on-line offer system?
Not necessarily. It works like this. We list your property on Eazi.com at the agreed listing price. We market your property at that price on all the major portals like Property24 and Private Property so we ensure every buyer for that area and price range is aware that your property is for sale. We then arrange viewings from the enquiries and offers start coming in through our online offer system.
When an offer is received it remains open for four days during which time our platform automatically notifies all buyers that expressed interest in the property, that an offer came in, and the amount of the offer. They are then able to submit their best offer, which we negotiate on behalf of the seller to conclude the best final deal for them. It’s very simple but effective, and ensures the true market value of the property is achieved.
Would you say you are best suited to tech savvy sellers?
No not at all, we make it simple. We send someone to your home to answer all your questions and we assist you every step of the way. We just sold a property for a 90 year old couple, in the week we listed it. They had lived in their home for 59 years and were not sure what it was worth. We agreed the price band and listing price with them and received several offers. We finally concluded their sale at 50% more than they had initially expected. And, on top of that they saved about R68 000.00 in estate agent commission by selling through us, at our fixed fee. We deliverd maximum value to this great couple and that was really gratifying.
What are your plans for the New Year?
We will sell hundreds of homes this year, and every time we will put more money in the pocket of our customers, increasing the value of their investment. That really drives us. So we will be working hard to serve as many customers as we can, providing them with great value and improving their experience when they entrust us with selling their home.
Does reaching many customers include expansion outside of Cape Town?
Yes, national roll out will start during Q2. Right now we are focussed on the Western Cape, where we aim to double our volume by March.
Sounds like an interesting year ahead for the property industry - good luck, and thanks for your time.
My pleasure, hopefully we contribute to it being a good year for home buyers and sellers.