Business as usual
The past few years estate agents had a love-hate relationship with large property portals like Property 24 and Private Property. On the one hand, property portals provide agents with a platform to advertise properties for sale. A very large majority of purchasers begin their search for properties online these days. Property portals provide a great starting point with their wide selection of properties for sale. On the other hand, with their above-inflation price increases and murky expansion agendas, among other things, agents regard property portals as a necessary thorn in the side.
It was and still is quite similar with the banks. Estate agents need business and trust bank accounts to operate legally. They also send billions of Rand worth of mortgage business to banks each year. The interaction between estate agents and banks are crucial for a well-functioning property market. Most buyers cannot afford to buy homes without obtaining a bank loan. If the banks are unwilling or unable to lend money to property purchasers, sellers cannot sell their properties. This will negatively affect the property market.
It's a similar story when one considers the role of conveyancing attorneys, but that's a post for another day!
Over the past 10 days, however, it became clear that business as usual is over for estate agents who are unable to adapt to the changing property landscape. In a move that surprised many estate agents, First National Bank began offering a direct selling option to property sellers on its nav>>Home app. What got many estate agents hot under the collar was the fact that FNB was loading its nav>>Home app with estate agents' listing data. Yes, that's right. FNB used estate agents' listing data without their permission to circumvent estate agents.
Estate agents had many questions about the stunningly tone-deaf move by the bank. What was FNB's intent? Would they still be wooing the property industry for mortgage business? Were the bank planning to get a fidelity fund certificate and become an online estate agency? Why did they not engage with the property industry before going down this road?
However, the most important question was, “How did FNB get those listings and data without our permission?”
Who owns your data?
They got it from Private Property.
It was nicely packaged in a feed from Private Property to FNB. In a press release, Mark Coetzee, the COO of Private Property said, “Private Property have had a long standing commercial relationship with FNB whereby we syndicate listings to their banking platform.” According to Coetzee, this was done to widen the audience of property buyers and sellers and to increase the leads to estate agents.
I have no reason to doubt Coetzee's statement. Unfortunately it means that Private Property was also surprised by FNB's use of estate agents' data. In fact, Coetzee admits that, ” this new feature may be seen as step in the direction of a direct to consumer strategy by FNB so, although we are bound by our commercial terms with FNB, we are nonetheless engaging with them urgently.”
Whether Private Property knew of the bank's plans in advance is a moot point. It's interesting that Coetzee would be referring to Private Property's “commercial terms with FNB”. This normally means that one gets paid for delivering something of value (a listing data feed, maybe?). The point is that estate agents' data was used without their permission to prop up a competitor to estate agents. Estate agents willingly loaded their listing data on Private Property in exchange for leads. The portals receive the data, store it, glean insights from it and, as can be seen from the FNB debacle, also send it to direct competitors of estate agents.
How does that make you feel? Let's ask the question in a different way. If a property portal owns your most important business data, who is in control of your business?
Data is the new oil
The real estate industry is changing. Keller Williams Realty is unequivocal about our view that estate agents must own their business data. Our co-founder and Chairman, Gary Keller, recently made a distinction between agent-enabled technology and the technology-enabled agent saying, “You can either be an agent who is enabled by tech or you’re going to be the agent who is enabling tech. This is a battle over who will be the fiduciary.”
In order to be competitive and successful in the future, agents must control their data.
With the impending “digital boom,” more and more technology companies (and even banks!) are flooding into the real estate space, vying for agents’ data. The goal is to turn this data into meaningful insights and run their businesses off of agents’ hard work.
According to Gary Keller, “The one with the most insights wins. And the one with the most data will have the most insights. Let someone else have your data and soon they’ll know more than you do.”
How did it work out?
Private Property and FNB relented, this time. Mark Coetzee announced they will remove the listings of all their clients from the bank's app with immediate effect. He said they had a responsibility to protect the industry they operate in. Again, I have no reason to doubt him. One has to wonder, though, what effect the industry storm that erupted and social media outrage had on the bank and the portal's decision.
Let's hear from the bank. Marius Marais, FNB Mortgage Cluster Head, said FNB values the contribution from estate agents and mortgage originators, but they follow a multi-channel approach at the bank. Private listing opportunity is in response to a worldwide trend where there are customers who desire to do things themselves on digital platforms. FNB has reiterated its commitment to continue engaging with industry players to meet the needs of customers through a multi-channel approach, which improves the buying and selling process.
Change is coming. Are you ready?
Are you ready for the coming changes to the property industry? Will you be able to deal with digital disruption by technology companies that want to use your business data against you? Is your company ready? Are you still giving your data away in exchange for leads or do you know how to generate your own?
At Keller Williams we'll show you how.
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