Real estate portal companies tend to be quite conservative. They rarely rock the boat with controversial statements and you don't tend to see many counter-narrative opinions about how they should do business.
We know that there are plenty of interesting, unconventional and even divisive opinions out there in our industry. We often hear them in private at Property Portal Watch events or in off-the-record chats.
Before this year's Property Portal Watch conference in Madrid, we decided to ask our followers to give us their anonymous opinions on some of the hottest topics surrounding the real estate portal industry. We wanted to see what real estate portal operators really think when nobody's looking...
We were happy that 80.5% of the people who responded said that they worked for a real estate portal or marketplace company. Then 6% said they were suppliers to the industry and another 6% identified as customers of real estate portals (agents).
The term 'portal' has been used to describe these businesses for over twenty years but as attendees of Property Portal Watch know, not everyone still uses the term.
Many around the industry refer to sophisticated businesses like Rightmove, Zillow and SeLoger as 'real estate marketplaces' and our audience seems pretty split on the matter. Around a fifth of respondents just wondered what all the fuss was about though...
The U.S. market leader Zillow sent shockwaves through the industry when it pulled the plug on its home buying and flipping division in November 2o21. Since then companies such as Opendoor and Offerpad, who are still in the iBuying business, have been feeling the pinch of heightened inflation and stubborn mortgage rates.
In other markets, such as Turkey, companies such as Emlakjet are persisting with iBuying and are optimistic about the model's future.
Our followers seem to be split on the matter though...
In 2022 we did a study in collaboration with EyeSpy360 to find out how far virtual tours have spread on real estate portals around the world. Although the study found that around one in ten listings on portals had a virtual tour, it seems that for many the jury remains out on their real usefulness on portals.
There's still a big chunk of the industry that needs to be won over for widespread adoption.
There seems to be an assumption among some that because real estate portals have the attention of people shopping for houses they should be able to convert that attention into profitable mortgage brokerage businesses.
Looking at the experience of big international players like Zillow and REA Group, this assumption has yet to really bear true. There are a lot of portals out there that have wasted time and effort searching for the mortgage El Dorado.
The perception among our respondents was mixed. Around half thought that portals would make good money from mortgages and half thought the opposite.
REA Group (who spent A$244 million to acquire Mortgage Choice in 2021) and Zillow (which is seeing an increasing mortgage attach rate in its 11 regional 'enhanced markets') will be hoping that their results over the coming quarters can persuade the doubters.
There are a lot of real estate portals out there that have put a lot of M&A money or development hours into owning the CRMs used by their agent customers.
The cynics in the industry might be forgiven for thinking that they do this to control more of their customers' data, even if they're making a loss on the CRM software itself.
Well, it looks like the cynics might have a point. Over 60% of our respondents said that for portals, CRMs are best to own as a loss leader for greater control of their markets.
Real estate portal companies are some of the most profitable online businesses in the world.
It will come as no surprise that more than 40% of our respondents said that the best path forward is just to stick to what they've traditionally been good at... marketing homes.
The next most popular answer to the question was for portals to use the so-called next-gen-lead-gen model. This way of doing business sees the portal generate and then qualify the leads it gives to agents in return for a share of the agent's commission. It has its complications but is generally seen as a potentially lucrative model for portals with 24.4% of votes.
13% of respondents said that portals should get into the consumer convenience product game as German market leader Scout24 has done with great success.
Only 6% of our respondents thought getting directly involved in the transaction was the best path for real estate portals to follow and less than 3% thought that expanding overseas was the way to go.
Yes, we were just stirring the pot with this question. Even so, we were still surprised to see that 36.6% of respondents said yes.
Apparently, even among real estate portal employees, there is a significant percentage of people that think that see portals as just online versions of the classic newspaper classifieds ads section.
Portals don't band together in industry associations or lobbying groups. There is no collectable voice to dispel it so that perception is likely to persist.
We've heard people say it in private and we can be sure that portals say it when nobody's listening but until now most had probably never admitted it outside of their board meetings.
The majority of real estate portals that we surveyed said that their end users were more important than their agent customers.
We left the last question open-ended. We wanted our community to give up their most controversial opinions on the industry. Some of the great responses we got included...
"Technology will not replace agents. Agents using technology will replace agents not using technology."
"In 95% of the cases, leaders will remain leaders, and challengers will fail"
"Portals should own tech-enabled brokerages"
and our favourite:
"They [portals] are like silverware, only helpful when being used".
Thank you to everyone who took the time to complete the survey. We look forward to hearing more controversial, counter-narrative, and interesting opinions from you all at future Property Portal Watch events.
If you've got a controversial opinion on the real estate portal industry that you want to share, get in touch. If it's good enough we might just want to publish it.