Online agencies are one of several new models gaining traction in residential real estate. They smartly combine the traditional expertise of professionals with efficient new technologies to provide a low-cost alternative to traditional real estate agencies and brokerages.
Their rise around the world is slow, but the impact they are having is unmistakably big. The top player in the U.K., Purplebricks, has a market capitalization approaching $1 billion after going public in December 2015.
Collectively, online agencies have around 5 percent market share in the U.K. and are putting the incumbents under increasing pressure. And the battle in the U.S. is about to heat up with Purplebricks raising $62 million to enter the market in the second half of 2017.
The value proposition of online agencies typically consists of a low fixed-fee and an improved customer experience. Technology plays a key role; online agencies rely on it to empower consumers, bring transparency to the transaction and improve overall efficiency (thus allowing them to charge lower fees).
If technology is a key point of difference, what exactly does it do? What does it look like and how does it add value to the transaction?
Tech is a critical component of an online agency’s value proposition. Here, we’re going to dive deeper, looking at exactly what this tech looks like for a leading online agency, how it adds value and what lessons we can learn.
Case study: eMoov.co.uk
EMoov is one of the leading online agencies in the U.K., having served over 20,000 customers since its founding in 2010.
EMoov’s technology platform started development in 2013 and is currently on its third iteration, which is one of the big reasons eMoov is appealing as a case study. Not only has the tech platform been in operation for around four years, the team behind it has had a chance to learn and iterate.
Another important factor: The technology is being used at scale. The company lists between 300 and 400 homes each month, and it expects to list nearly 7,000 homes in 2017. This is not technology built in a basement without users — it’s battle-tested in the field and being used to sell homes.
At a high level, the technology platform does two main things:
- It empowers customers in a way that allows transparency and control over the transaction.
- It reduces costs at scale by making eMoov’s internal agents more efficient.
EMoov believes technology plays an important part in real estate by empowering customers and making agents more efficient. But it also believes property professionals are still needed in certain areas, like negotiation.
Ivan Ramirez, eMoov’s CTO, sums up his philosophy: “It was important for us to fully automate certain parts of the journey, like property onboarding, a well as viewings, but we knew that other parts, like offer negotiations and progressions, was an area where we needed to keep the human element present.”
“We still use technology in these areas of the selling process, but it’s more focused on empowering the agent and providing transparency to the customer,” Ramirez added.
A history of iteration
“Historically, technology has been absent from the property transaction, save for search via the portals and agent-facing office management software,” said Russell Quirk, eMoov’s CEO.
Russell thinks that a number of the players in the online agency space, in addition to all of the participants in the traditional sector, grossly underestimate the amount of work required. “It’s a two-year project at a minimum and a massive seven-figure investment,” he adds.
EMoov’s technology has gone through a number of iterations, not all of which have been successful. “We’ve ripped up an entire build and thrown it away and a team with it,” Quirk said. “We adopted a waterfall approach and just didn’t listen to the customers. We focused more on the solution than understanding the problem.”
Now, however, the team is firing on all cylinders and innovating, iterating and deploying new features on a weekly basis.
Ramirez and his team of product managers spend a lot of time in the trenches, shadowing agents dealing with customers, understanding the existing process and looking at customer feedback from support tickets.
“The goal was to pull out meaningful feedback that would allow us to challenge the existing business processes,” Ramirez said.
“We looked at our internal team’s business processes even further, as well as our customers’ desired journeys, information they wanted to see, and how to present it all in a way that makes sense to them. The way our customers and our internal agents consume and interact with the product is completely different.”
Ramirez believes in a process of continuous improvement and that a product is never complete.
He’s also implemented a culture of product development that aligns to key business metrics.
Everything that’s built has an associated metric to be measured against. In his opinion, this is why eMoov is able to operate a business at a low cost while keeping a high level of customer service.
Enhancing the customer journey
“Customers of all ages and demographics embrace being in control and having 24/7 access to their listing and their transaction,” Quirk said. By presenting everything to its customers, eMoov is able to bring a strong degree of transparency to the process.
The property dashboard gives users — both homesellers and eMoov’s agents — a comprehensive look at the property listing.
Relative listing popularity and key performance metrics from the major listing portals (Rightmove in the U.K.) are shown alongside a snapshot of viewings and potential buyer feedback.
EMoov has attempted to automate the entire process of scheduling viewings. Sellers define the times they are available to show the property to potential buyers. The company’s agents then work within these timeframes to help schedule showings for the seller.
On the other side, potential buyers are presented with an online tool to schedule a viewing, as seen below.
The entire process occurs online for the more than 5,000 viewings that eMoov arranges each month. And it’s more efficient; 93 percent of viewing confirmations now occur online automatically. “We’re now doing this with half the staff that we were deploying to do half as many viewings a year ago,” Quirk said.
Improving team efficiencies
Ramirez subscribes to a Warren Buffett philosophy, which is that successful businesses need to be low-cost operators. “We have been able to significantly decrease the cost of service in the first part of the seller journey by really operationalizing the product in a way that makes every contact that we do have with our customers more efficient,” he adds.
“In an omni-channel approach, this is a must to succeed as you need to be able to service that customer in whichever way they want to be serviced at different stages of the journey,” Ramirez said. “It’s very difficult to force a customer through a rigid interaction, so the product needs to be flexible and empower whomever engages with it.”
As an example, the customer onboarding process is how a new listing gets on the market. It typically consists of the following steps:
- Provide property details (description, rooms, highlights and so on)
- Set the selling price
- Schedule the photographers to come take the photos
- Set viewing availability
- ID checks
A year ago, the steps listed above were all done manually. Today, 90 percent of eMoov’s customers do the steps above on their own using the tech product. This “hand-holding” approach has been transformational for its business and significantly tightened the time it takes to list a new home.
The impact on cost is equally material. The team that supports this operation had 15 people, but now the firm only needs nine people to handle nearly double the number of new customers. Historically, productivity has chugged along at less than 60 cases per person, and now the team is up to over 100 cases per person.
EMoov currently has around 50 staff members, of which seven are engineers and two are product people.
In comparison, there are 11 staff members in offers and progressions and eight in support. It’s this combination of intelligent tech plus experienced property professionals that makes the entire operation efficient and successful.
The platform essentially has a workflow functionality that puts tasks in front of the agent, helping to progress the sale one task at a time. “It takes the thinking out of the progressions job,” Ramirez said.
The platform also manages the chain on the property being sold, as seen below, giving a holistic view of the entire transaction.
Lessons learned and future plans
Some of eMoov’s biggest wins have been around customer onboarding, automated viewings and collecting feedback. Each of these areas has benefited greatly from technology to streamline and automate the process.
On the flip side, one area that surprised the team was virtual tours. “Virtual tours didn’t add any value to our listings. We didn’t see a faster time to offer; we didn’t see less or more viewings,” Ramirez said.
When evaluating interesting new technologies, eMoov is in a unique position as it sits across the entire transaction and can see the utility (or lack thereof) of adding new features like tours.
EMoov has identified machine learning, artificial intelligence and chatbots as areas of future, long-term focus.
Developments in these tech realms can improve service areas like valuations and viewings.
In the short-term, however, the focus remains on iterating the offers and sales progression components of the platform to improve efficiencies and give customers more control and transparency.
No matter what your role in the industry is, there are lessons to be learned from what online agencies like eMoov are able to bring to the market.
Namely, that there’s room to provide homesellers an improved experience. Technology plays an unmistakably important role in enhancing the customer experience of buying and selling real estate.
As someone who looks at a lot of businesses in real estate tech (with a focus on finding winning models), I see a number of key takeaways from the eMoov story:
- The winning formula is technology + people. You need both to succeed.
- Success comes from more than technology and user interface; it’s the team, the methodology, and an ethos of continuous improvement.
- A good tech product is a big investment and long undertaking and can’t be acquired off-the-shelf.
- Ultimately, the product must be good for consumers. It needs to add value and make the transaction easier and more efficient through transparency and automation, 24/7.
Mike DelPrete is a tech entrepreneur and business advisor with broad expertise in online real estate tech. As head of strategy at the online real estate portal and classifieds firm Trade Me in New Zealand, he oversaw investments and acquisitions for the publically-traded firm. Now he travels the world engaging with leading property portals and real estate tech startups, gathering first-hand knowledge on emerging trends and industry themes. This post was first published on his blog, Adventures in Real Estate Tech.