It’s been over 16 years since TradeMe was founded. And over 20 years since EBAY was founded. Buying something online was seen as high tech, some 20 years ago. Nowadays, we expect to be able to find and buy anything online.
In Australia, you can buy and sell cars online. Here, at home, Trade Me offers a similar facility which connects buyers to sellers.
While we feel easy buying and selling products and cars online without the use of an intermediary such as a dealer, selling property online is still a new thing.
We still rely on a real estate agent to act as an intermediary to facilitate the sale. Yes, you still advertise online but your first point of contact is a licensed real estate agent who will go over the deal with you. How many occasions have you bought a home without going through a licensed real estate agent?
Until recently, you had to physically attend an auction (or get a representative to attend on your behalf) in order to bid. Now PropFi is a startup who wants to shake up the real estate industry to try to put auctioneers out of a job. But what the startup PropFi don’t understand, is that while the technology may be there, it will take a while for the population to get use to it. Like any new technology, it will go through a period of slow takeup before the technology and product becomes mainstream. If PropFi becomes a standard way to sell a house, it could replace auctioneers. Just like Trade Me charges something like 8% of the sale price, so too will PropFi charge a commission on the sale price.
There will likely be backlash from the real estate industry and could put a whole generation of auctioneers out of work. However, auctioneers don’t have to worry about PropFi just yet. Selling and buying a house is a two way market. For every buyer, there needs to be a seller. PropFi has an uphill battle. It has to convince sellers to list with them and at the same time, it has to convince buyers to use the system to bid.
Moreover, Auctioneers still have an advantage because they work closely with real estate agents and real estate agencies. The real estate agencies are the real gatekeepers. If they refuse to list the house on PropFi, auctioneers can continue to do what they have always done.