The existing property portal business model of charging estate agents to list property details is being aggressively challenged by a new generation of websites who allow Estate Agents to list their properties for free. These include the likes of Mouseprice, HomeCo, Dothomes, Nestoria, Globrix, and Zoomf.
These new property portals see themselves as publishers of information and recognise that the value of the listings information that estate agents provide. Publishers do not charge journalists to provide interesting stories for their publications so it seems both odd and unsustainable for the existing property portals to continue charging estate agents for the content they provide. Indeed, estate agents have complained that were it not for the content they provide, the major property portals would have no traffic and nothing to display.
The traditional model of charging for classified listings worked for newspapers, where the switching and distribution costs remain high. However the same economics do not hold true in the online world. By not charging estate agents, these new portals are able to display a more comprehensive range of properties than portals that charge, thereby attracting visitors based on the quality of the information rather than the size of the advertising budget. As it costs the internet user nothing to move from one website to another, users tend to gravitate towards the websites with the best information. Significant visitor traffic is not confined to websites who advertise offline. Indeed, when was the last time you saw a television advertisement for Google?
Overwhelmingly these new websites use “web crawling” or “spider” technology to find properties marketed on other portals and on Agents’ own websites, and then pull the details onto their own site. This approach is controversial with some agents and other portals, as they don’t like having their content taken in this way. Also, if they aren’t careful, the free uploaders using this approach can feature a lot of out of date property. Having said that, these websites don’t charge to feature agents property and so make money by advertising “featured” properties and hosting ads next to the details.
Some new portals such as Mouseprice prefer direct relationships with estate agents over “spidering” and can take data feeds in a wide variety of formats making the task of arranging the additional data feeds a simple one-off job that should last no more than one hour.
As estate agents are the ones who are going to benefit most from competition between portals it is encouraging that the industry seems to be actively fostering competition. Forward thinking estate agency chains and software providers already make their data freely and easily available to the new breed of portals and have thus magnified their internet presence and massively increased their brand awareness for no additional cost.