Entrepreneur: Property Fox founders Crispin Inglis and Ashley James
Few property sellers will have parted with the 5% or even 7% commission grabbed by their estate agent without a wince. Entrepreneurs Crispin Inglis (pictured right) and Ashley James saw the gap and have taken it.
Their answer to sky-high commissions is Property Fox, an online property platform that hit the market in April.
A market disrupter, Property Fox is undercutting traditional estate agency commissions aggressively. "Clients can pay a one-off R25,000 upfront fee or 1.5% commission on the conclusion of a sale," says Inglis.
Savings are huge. On a R5m sale, a seller who opts for the flat fee will save up to R325,000, while at a 1.5% commission the saving is still a whopping R275,000.
It is a low-cost offering that traditional estate agencies have scant hope of matching. "Their costs are too high," says Inglis. "The brand owner, the franchise office and estate agents and their assistants all get a cut of a commission."
Despite no formal marketing, Property Fox has already brokered 12 sales worth R28.4m. "We estimate we saved the sellers about R1m," says James.
Stock on hand is also growing. "We have 250 homes on our book," says Inglis. "We are adding 35 a week with a target of gaining 2,000 homes." It hopes to have 5% market share within four years.
Property Fox’s model offers sellers an end-to-end solution that in most respects parallels those of traditional agencies. "Our team of experts covers all aspects of a property sale, including valuation, photography and full paperwork assistance" says Inglis. Homes are given exposure on online property sites such as IOL and Property24. The only big difference is viewing of a home.
Turning the agent-led approach on its head, sellers show their homes to potential buyers, after Property Fox has done a background check on them.
"Estate agents are not happy having us in the market." For good reason. If Property Fox were to sell all properties on its book it would have deprived the traditional sector of almost R700m in commissions.
Property Fox is not the first online property platform to enter the SA market. First on board was Steeple, launched in 2012 and active in Gauteng, Cape Town and Durban. In October 2015 it was followed by Leadhome, which has limited its market to Gauteng.
Online property platforms have not caught on in the US. But they have in the UK, where one portal, Rightmove, reports a market share of 5%.