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Durban - The South African real estate market has a new entrant - an online web start-up that helps consumers sell their property at a fraction of the estate agent's commission.
Property Switch MD Graeme Tennant and Operations Director Jan Claasen believe the real estate revolution is now, consumers just need to decide whether they are ready to switch to online.
Fin24 has caught up with the entrepreneurs behind the Durban-based online property business.
How did you stumble upon your business idea?
We saw an opportunity for technology to improve the property market - improving efficiency and reducing costs. The property sales market is a very traditional industry and one that in our view has lagged behind most other industries in terms of implementing technology. We believe that many of the tasks conducted by the estate agent can be replaced or improved through using the internet and technology.
Was it easy to start?
No, both Jan and I left our previous occupations and have started our business on a shoe-string budget. It has been one giant learning experience as we are both in our mid-twenties and have never started a business of this nature. We have dedicated countless hours without any guarantee that you will see anything in return. Only now are we beginning to see our efforts being rewarded.
What were the stumbling blocks?
There is a lot of red tape and procedures involved in registering a real estate agency that is frustratingly time consuming.
Our strength is our technological approach to operating in a very "traditional" industry. The challenge (rather than a stumbling block) for us is to "switch" people's attitudes to embrace technology and the benefits it offers.
Costs are always a consideration for anyone setting up a small business. How did you overcome this hurdle?
We have some pretty cool software at our disposal, but apart from that our operational requirements are minimal. The beauty of our business is that we are utilising technology to replace many of the tasks that traditional estate agents take a manual approach to. Also by operating online we can sell property anywhere in the country and run a national business from one central office.
How easy was it to get finance if you needed any in the beginning?
Acquiring finance was one of our primary objectives when we started out. We spoke to a number of investors that liked our concepts, but were reluctant to invest in a business without any track record. An investment under these circumstances would also have involved giving up a significant portion of equity as compensation for the risk taken by the investor. As a result we have decided to rather start our business with minimal start-up capital.
Did you make use of professionals to help set up your business?
We have benefited greatly from advice that we have received from many different people from a variety of different professions. We have spoken to estate agents, conveyancers, financial planners, marketing agencies, accountants, bankers, IT specialists, HR specialists and a variety of business owners. The best part is that almost all the advice we have received was for free. People want to help you - don't be afraid to ask.
What skills do you need to run your business?
Our business is technology focused and Jan is our technology guy. He is passionate about developing and implementing systems not only in the space of optimising service delivery and service experience for our clients, but also for the benefit of the day-to-day running of our internal business operations, which makes us a lot more efficient.
My strengths lie in dealing with people. I generally am responsible for developing and maintaining relationships with our clients and partners.
Though we are technology driven, Property Switch is a client centric business. Therefore, understanding and meeting their needs is of utmost importance to our success.
Jan and I as individuals have very different skill sets and even very different character traits. We have found that our differing skills and personalities complement each other well in the business environment. We also get on very well with each other and are great friends!
Apart from yourselves will this venture create other jobs?
We are currently in the exciting phase of conducting interviews for regional consultants in Johannesburg and Cape Town (Jan and I fulfil the role of consultants in Durban). The role of the consultant is to visit properties to collect information and take photos. As our business grows we will need to employ consultants across the country as well as office-bound account managers who will deal with our clients.
What exactly it is that you do and how it will make other people's lives easier?
Property Switch is reinventing real estate by harnessing the power of technology to offer a complete internet-based real estate agency service. We charge a commission rate of 2.75% (compared with 5% to 8%) and only work with an open mandate.
For us, taking property transactions to the internet made a lot of sense. Already in South Africa approximately 80% of potential buyers start their search for a home on the internet, most often visiting well established property portals like Property24 and Private Property.
Estate agents use these property portals to market their properties to huge numbers of potential buyers browsing from where ever they want, when they want.
Property Switch goes a step further than online property portals by offering a complete online property service offering without involving a physical estate agent.
- Fin24
* Share your experience of setting up a business or simply ask a question. Our business panel can put you on the right path.
Property Switch MD Graeme Tennant and Operations Director Jan Claasen believe the real estate revolution is now, consumers just need to decide whether they are ready to switch to online.
Fin24 has caught up with the entrepreneurs behind the Durban-based online property business.
How did you stumble upon your business idea?
We saw an opportunity for technology to improve the property market - improving efficiency and reducing costs. The property sales market is a very traditional industry and one that in our view has lagged behind most other industries in terms of implementing technology. We believe that many of the tasks conducted by the estate agent can be replaced or improved through using the internet and technology.
Was it easy to start?
No, both Jan and I left our previous occupations and have started our business on a shoe-string budget. It has been one giant learning experience as we are both in our mid-twenties and have never started a business of this nature. We have dedicated countless hours without any guarantee that you will see anything in return. Only now are we beginning to see our efforts being rewarded.
What were the stumbling blocks?
There is a lot of red tape and procedures involved in registering a real estate agency that is frustratingly time consuming.
Our strength is our technological approach to operating in a very "traditional" industry. The challenge (rather than a stumbling block) for us is to "switch" people's attitudes to embrace technology and the benefits it offers.
Costs are always a consideration for anyone setting up a small business. How did you overcome this hurdle?
We have some pretty cool software at our disposal, but apart from that our operational requirements are minimal. The beauty of our business is that we are utilising technology to replace many of the tasks that traditional estate agents take a manual approach to. Also by operating online we can sell property anywhere in the country and run a national business from one central office.
How easy was it to get finance if you needed any in the beginning?
Acquiring finance was one of our primary objectives when we started out. We spoke to a number of investors that liked our concepts, but were reluctant to invest in a business without any track record. An investment under these circumstances would also have involved giving up a significant portion of equity as compensation for the risk taken by the investor. As a result we have decided to rather start our business with minimal start-up capital.
Did you make use of professionals to help set up your business?
We have benefited greatly from advice that we have received from many different people from a variety of different professions. We have spoken to estate agents, conveyancers, financial planners, marketing agencies, accountants, bankers, IT specialists, HR specialists and a variety of business owners. The best part is that almost all the advice we have received was for free. People want to help you - don't be afraid to ask.
What skills do you need to run your business?
Our business is technology focused and Jan is our technology guy. He is passionate about developing and implementing systems not only in the space of optimising service delivery and service experience for our clients, but also for the benefit of the day-to-day running of our internal business operations, which makes us a lot more efficient.
My strengths lie in dealing with people. I generally am responsible for developing and maintaining relationships with our clients and partners.
Though we are technology driven, Property Switch is a client centric business. Therefore, understanding and meeting their needs is of utmost importance to our success.
Jan and I as individuals have very different skill sets and even very different character traits. We have found that our differing skills and personalities complement each other well in the business environment. We also get on very well with each other and are great friends!
Apart from yourselves will this venture create other jobs?
We are currently in the exciting phase of conducting interviews for regional consultants in Johannesburg and Cape Town (Jan and I fulfil the role of consultants in Durban). The role of the consultant is to visit properties to collect information and take photos. As our business grows we will need to employ consultants across the country as well as office-bound account managers who will deal with our clients.
What exactly it is that you do and how it will make other people's lives easier?
Property Switch is reinventing real estate by harnessing the power of technology to offer a complete internet-based real estate agency service. We charge a commission rate of 2.75% (compared with 5% to 8%) and only work with an open mandate.
For us, taking property transactions to the internet made a lot of sense. Already in South Africa approximately 80% of potential buyers start their search for a home on the internet, most often visiting well established property portals like Property24 and Private Property.
Estate agents use these property portals to market their properties to huge numbers of potential buyers browsing from where ever they want, when they want.
Property Switch goes a step further than online property portals by offering a complete online property service offering without involving a physical estate agent.
- Fin24
* Share your experience of setting up a business or simply ask a question. Our business panel can put you on the right path.
