Though some of us may never be able to afford a property because we’re too busy spending all our money on avocado toast, the number of startups working in the real estate space keeps growing nonetheless.
This growth is showing no signs of stopping either, with Domain Group yesterday announcing the public launch of its API to allow startups to tap into its expansive property data to create new tools and platforms in the space.
One particular aspect of the property sector a handful of startups are looking to change is the sales process, or traditional real estate agent model.
A new startup launching in this space is Sydney’s Sello. Cofounded by Ian Macintosh, previously a director at Macquarie Group, Wego.com cofounder Craig Hewett, and David Murphy, Sello offers clients a fixed-fee service to sell their property.
Having worked across real estate funds management at Macquarie Group, Macintosh believes that while the Australian real estate market has been slow to innovate, traditional agents have been able to continue to operate profitably, providing little motivation for change – but things are starting to change.
“Australian consumers are digital savvy and expectations of digital consumption have expanded throughout a number of other industries including media, travel booking, financial services and retail,” he said.
“Property prices across much of Australia have increased significantly [and] so too have the commissions absorbed by vendors from traditional agents. We believe that these extremely high fees are disproportionate to the value typically on offer, or received by the majority of sellers.”
Sello was created to bridge this gap, looking to offer both greater value and a more modern way of going about the selling process.
Bringing Hewett and Murphy into the team as founding investors, Macintosh started building the Sello platform, going with a local development team over outsourcing overseas.
A seller can get started on Sello by first booking a free property appraisal; here their local ‘property expert’ will visit the seller to, of course, conduct an appraisal and discuss how to go about listing the property and all that comes with that.
If the seller chooses to go ahead, they will continue to work with the local property expert as well as the startup’s central marketing and sales team. The startup will arrange professional photography and compile a listing, which will then go to Domain and Realestate.com.au; the listings will be featured on each site’s paid or premium listings portal, Domain’s Elite Silver and Highlight on Realestate.com.au.
From there, Sello also manages inspections and the collection of feedback from interested buyers, with this all available for the seller to monitor on their dashboard on the Sello platform. Once a sale is agreed, Sello will assist the client through each stage, to settlement.
“We consolidate all communication into a single platform, used by sellers, buyers and the agent. Agents use the platform to interact with potential buyers, responding to queries, receiving feedback on the property, and managing offers,” Macintosh explained.
“Sellers have clear visibility of this communication flow, keeping them abreast as the sale develops, in real-time. Sellers also benefit from real-time data provided in the dashboard [which] includes campaign performance, details of inspection attendees, and buyer profiling.”
So who are Sello’s ‘local property experts’? According to Macintosh, the startup is looking for real estate agents that “understand the change that’s coming with digitisation of the industry and appreciate the advantages that Sello affords the process”.
The startup’s pitch to these agents, he said, is that Sello offers an automated platform that will drive efficiency, while it is also designed to generate new customer leads.
“Additionally, we provide them with an innovative platform that is a positive point of difference in the marketplace that consumers will respond positively to,” he said.
On the other side of the marketplace, Macintosh defined the startup’s target market in terms of sellers as such: “Someone who subscribes to Netflix or Stan, uses Uber and is comfortable with online banking, booking travel online, has a busy life and often shops for clothes and other retail items online. They value transparency and being fully in control while enjoying the savings associated with online services.”
Sello isn’t the only startup going after this market with this kind of platform, with the likes of Queensland-founded MiSale and UK startup PurpleBricks, which launched in Australia last year, also offering access to a real estate agent’s expertise for a fixed fee.
At $7,550 – plus an additional $550 if a seller chooses to go to auction – Sello’s fee is slightly higher than the $6,870 PurpleBricks offers for sale via auction or $5,500 for private treaty, and significantly higher than the $2999 service MiSale offers, however Macintosh is unconcerned.
Comparing Sello to PurpleBricks, which he considers the startup’s major competitor, he said, “Our price is all-inclusive. There are no extra fees for a complete service.”
(However, while Sello’s fee includes printed brochures, ‘upgrading’ one’s marketing campaign, for example through print ads, will cost extra, while reassessing marketing strategies and exploring new options if a property is not sold after six weeks will also cost extra.)
“Secondly, we’ve included premium marketing in our pricing, because we understand that Australians are more conscious of the presentation of their homes and value top-quality photography. We also include premium online marketing, which is important, because that’s where the vast majority of buyers are searching for property.”
Beyond price, Macintosh believes Sello edges out its competitor because it was built specifically for the Australian market, “to meet the needs of the design-conscious Australian consumer”.
“Building sello from a clean slate has given us the advantage of being able to use the latest technology, not a four year old-plus platform from overseas which has been retrofitted for Australia,” he said.
“We have tailored our platform to best suit how Australians buy and sell property. While our markets are similar, there are some key differences between Australian and UK consumers which we thoroughly understand.”
With NSW its initial focus, the startup will look to iterate on feedback from the market before scaling.
Macintosh said, “We are confident that growth will occur organically. We have high ambitions for Sello to scale nationally, but we are taking a considered approach to get there.”
Image: Craig Hewett, Ian Macintosh, David Murphy. Source: Supplied.