Open Agent: The “Trip Advisor” of the real estate industry
Selecting the right real estate is critical in the process of selling your property. But many property owners make that choice blindly, often pulling a name out of the hat due to the overwhelming number of agents to choose from. Australian startup OpenAgent.com.au makes that process easier. Clients visit the site, provide basic details about the property they’d like to sell, and the platform provides real-time real estate agent rankings and recommendations for them.
The online service works in conjunction with an offline service; every OpenAgent client is called by an experienced ex-real estate agent who looks after their case, chases down the top agents for them and makes sure those agents deliver a high level of service.
“Our website is the only one in Australia where users can search and intelligently compare every real estate agent,” says Zoe Pointon, Co-Founder of OpenAgent.
Pointon stumbled upon the idea after several experienced with Sydney-based real estate agents.
“When I started asking around friends and colleagues I realised the scope of the problem: some agents were lazy and hard to deal with (telling prospective buyers incorrect addresses, not turning up on time to open homes, and negotiating against their vendors), and others were incredibly professional and tough, brilliant negotiators,” she says.
Pointon and Co-Founder Marta Higuera wondered how, in this digital climate, it was still so difficult to find out useful information about a real estate agent’s performance online.
“Considering the sale of a property is the largest transaction most people ever make, it surely would make sense to have some quality performance information about the professional you are hiring to represent you. Every other industry had information aggregators, so we just thought: ‘Why not real estate agents?'” says Pointon.
One afternoon, Pointon built a test a site from her kitchen table – combining WordPress and Wufoo forms into a minimum viable product. She only had to fork out $100 from her hip pocket to develop the basics. The second version of the site more visually appealing and built with a hired Russian developer on $20 per hour.
“Marta had more startup experience than I did having worked in both Silicon Valley and also a car insurance lead generation site in Spain. She knew all about testing assumptions, iterating, and quick release cycles,” says Pointon.
“We have been building better and better versions, testing as we go, and in our minds the product will never really be finished.”
They tested out different business models to determine which would be suitable and sustainable; and in February, confident they found the winning business model for their niche, Pointon and Higuera launched the website, aiming to be the “Trip Advisor” of the real estate industry. The site today is fundamentally about bringing transparency to property sellers in Australia.
“We are the only site in Australia with refined information on more the 30,000 agents, over 1 million transactions and independent customer recommendations. As a free and independent source of information for Australian consumers, this is a big movement away from how the real estate agent market has been operating,” says Pointon.
“Until this year, most sellers would just call a local agent, perhaps from a flyer in their letterbox, or based on a single friend’s recommendation. Now we aggregate recommendations and combine that with analysis of sales performance to give the most complete and powerful assessment of real estate agent performance available.”
They were established proof of concept and were running a profitable model, the co-founders sought professional investment. Despite the support they’ve received from the investor, they remain cost-focused.
“We measure the impact of every dollar spend and are always trying to do things more efficiently or better. We would consider a Series A when the time comes, but only if it makes sense for the business and we believe we can use the funds to grow OpenAgent profitably,” says Pointon.
The overall market for real estate agent commissions in Australia is estimated to be $7 billion. OpenAgent provides referrals to real estate agents; and so in effect, they are competing with the dollars real estate agents spend on other “marketing activities” such as letterbox drops, newspaper advertisements, yellow pages listings, retail shop space, and their time spent finding and chasing down prospective sellers.
“In any industry, 20 percent marketing spend is a fair estimate, so we estimate the market potential to be around $1 billion. But with such a big market, market share targets become a pretty arbitrary discussion. For now we are just looking to get a tiny slice of the market and continue to demonstrate our value to both property sellers and real estate agents,” says Pointon.
Their primary marketing tool is Google AdWords. Pointon says they love being able to “turn demand on and off” and “being able to track which spend is working and which is not”.
“Turning things “off” was particularly useful early on when we were limited by our capacity to properly handle clients. We’d run ads, get some leads, and then turn the advertising off while we figured out how to serve them. We’ve moved to a new phase now and we are now starting to experiment with new channels and getting word of mouth business as well, which is fantastic,” she adds.
Pointon says their biggest achievement has been making life easier for their clients, given that selling property isn’t at the top of anyone’s fun list.
“In a little over a year, we have improved the experience our clients have been able to have selling their home by creating a good service and providing transparent information they would otherwise have not had access to,” she says.
“We have incredibly high satisfaction scores as well as lots of positive feedback from clients. This is the best part of our business and something we underestimated when we started OpenAgent. People who are selling their property are often in the middle of a significant life transition. Making the process easier, removing stress, and creating an experience that is truly different and better then before is extremely rewarding.”
The biggest challenge for them, on the flip-side, was knowing what to prioritise throughout the development phase.
“We have big plans and an even bigger vision, but getting there is a long and uncertain road. There are always hurdles, roadblocks and forks, and navigating these is endlessly surprising and time-consuming!” says Pointon.
“The biggest thing we’ve learned is to try to keep the business agile so you can adapt and change to developments quickly. Hiring the right kinds of people who share your vision and passion is also critical.”
Pointon’s biggest advice for other aspiring entrepreneurs is to network with the early stage startup founders.
“They will have loads of practical advice and we found people in the start-up world to be incredibly generous with their time and feedback,” she says.
“Being able to bounce ideas off smart people pushed our thinking early on and helped us to move much faster than if we had to solve everything from zero every time. My advice would be to reach out and make friends, you will be surprised how helpful people can be.”
The OpenAgent team are currently focusing on bringing clients smarter real estate recommendations, more independently verified customer reviews and more information about local property markets.
The service is free for sellers, and there are no obligations to use any of the recommended agents. Real estate agents are charged on success. For more information on OpenAgent, visit www.openagent.com.au.