BREAKING: Pam Golding buys online, fixed-fee agency, Eazi.com
First it was SA Home Loans purchasing a stake in low-commission estate agency, Property Fox, last year. Now, Pam Golding Properties, just today, confirmed it has bought online, fixed-fee agency Eazi.com.
With rumours floating around last week that “a prominent real estate franchise had purchased an online, fixed-fee player”, many were asking who. Today, HomeTimes can confirm that the “prominent franchise group” is in fact Pam Golding Properties.
“Naturally, we keep a close watch on global real estate industry trends and it seems that internationally, residential real estate sales industries and businesses are being reorganised across at least two different and separate types of business models and customer offerings in specific market segments,” said Dr Andrew Golding, chief executive of the Pam Golding Property group. “The first of these is the traditional high ‘touch’, high service, agent/client relationship model which is the cornerstone of the Pam Golding Property group and which will continue to be our core offering; but secondly, over the past two years, we have been following the advance of the online ‘hybrid’ estate agency model, which is a digital offering plus minimal agent ‘handholding’.”
The hybrid agency model has a technology platform that enables buyers and sellers to conclude real estate transactions, including: book valuations, change prices, arrange viewings, collect feedback, review marketing data, send messages, make offers and agree sales 24/7. This model uses technology to reduce costs and pass savings onto consumers in the form of lower, flat fees.
Golding said internationally that this model has started to gain traction and has specific applicability in the lower end of a number of key markets around the world where it is estimated that it has the potential to become a significant sales modus operandi in the future.
“From a South African perspective, while in no way detracting from the personal and professional service and high agent involvement of our existing Pam Golding Properties offering, we believe this investment into Eazi.com broadens the group’s access to the South African and African residential property sector by enabling us to take an interest in the high-volume segment of the market, which comprises over 100,000 transactions annually in South Africa alone,” said Golding. “This is particularly relevant in the price segments between R500,000 and R2m, to which the Pam Golding Property group has traditionally had limited exposure to date.
“This is not a disintermediation or cannibalisation play but rather a recognition that in specific market segments it is possible to give consumers a choice between a low-cost, fixed-fee, low agent involvement, technology-enabled online service or a traditional agent-enabled, high touch, personal service with all its inherent advantages.
“Eazi.com has a well thought through online, scalable platform and a sound business model that we are confident will add significant value to consumers in the South African and African real estate market.”
Eazi.com is a Cape Town-based, technology-enabled, fixed-fee service with call centre support which enables consumers to buy and sell residential property for a fixed fee of R29,500 (plus VAT) which is only payable on sale of the property.
“While Eazi.com is currently focused in the Cape Town metropole, and will continue to be managed and branded separately from Pam Golding Properties, given the international trends in real estate we are confident that the two models will co-exist successfully and enable us to expand the full service offering of the Pam Golding Property group locally, nationally and globally.”
Back in May this year, Private Property published an article in which various residential property franchise CEOs were asked various questions about low- and fixed-fee estate agencies, and whether or not they threatened the current status quo or if they were of no consequence to commission-based agencies.
Here’s what Golding said at the time
In your opinion, have online agencies that offer a flat commission had a major impact on the traditional real estate model? If not, is there a possibility of this happening in the future?
In general terms, these models are all relatively new to the market and so, as yet, the impact on the overall market has been small. As a consequence of the relative newness of these companies, there are no proven sustainably-viable, non-traditional models – it is common cause that newer low-cost “non-agent‘’ and technology driven models rely on volume and scale for success (namely profitability and sustainability). Time will tell whether the market will adopt these models partially, significantly or not at all in the medium to long term, but right now it’s too early to judge market take-up firstly and secondly whether, for example, a low, flat commission model is one that can be sustainably profitable.
Do you believe that buyers and sellers will embrace the online model or is there always going to be a need for traditional agents? If the latter, why?
The notion of an online model is a misnomer but rather goes to the question of the value proposition that agencies offer clients and what they are viably and sustainably able to offer those clients in terms of fees and continue to run successful businesses. In the final analysis, it really boils down to whether the agent or agency can add value to a real estate transaction and a satisfactory contract of that value for all concerned in that transaction. Currently, agents and agencies add real value in many varied and different ways. The purchase or sale of a property is usually at least a six-month process from start to finish, it can often be complex, it is frequently nuanced, and it is usually the single biggest transaction clients undertake. No one property transaction is exactly the same as another, each has its own specific peculiarities and nuances which the ‘’average” homeowner is not likely to have been exposed to.
Generally speaking, the disposal of or purchase of this asset is usually not within the client’s area of knowledge and competence. The requirement of and need for credible, professional, expert advice is therefore sensible and prudent. Property transactions involve hundreds of small steps from the first decision to sell to the final transfer of that property to new owners – these steps include the requirement for expertise and competence in a number of different disciplines from marketing to strategy to negotiation to finance to legal and conveyancing, to name but a few. The many and varied components of this value proposition ultimately result in a necessary sense of comfort and peace of mind as well as importantly, convenience in today’s very fast-paced world.