Referral sites like OpenAgent are a somewhat controversial new addition to the real estate industry in Australia. I had an insightful chat with founders Zoe Pointon and Marta Higuera to find out the story behind their service.
Founded in 2012 by ambitious entrepreneurs Marta Higuera and Zoe Pointon, these ladies felt there was a significant gap – between a home seller’s Google searches and a real estate agent’s ability to showcase themselves digitally – that was worth filling.
Filling a digital gap
In essence, OpenAgent captures the attention of vendors searching for real estate agents on the web and then acts as a connector, finding them a suitable agent based on two key factors; the homeowner’s personality preferences and the type of property they own.
OpenAgent asks vendors specific questions about their property and the style of selling agent they believe would work best with them. They then refer two or three agents to the vendor. If there is a successful relationship forged and resultant property sale, it’s then and only then that OpenAgent makes their money – a referral fee equivalent to 20% of the agent’s sale commission.
Backing the industry
The first thing I found interesting, right from the outset of our discussion, was that Zoe and Marta hold real estate agents in high regard.
“The longer we are in this industry, the more opportunity we’ve had to see fantastic examples of really great real estate agents,” Zoe said as soon as we started talking
“Actually, there are very few disreputable agents that we’ve come across in this industry. The agents who we deal with are very professional. We believe in them and enjoy sending more business their way.” Marta adds.
To this end, I contacted Glen Coutinho from RT Edgar in Victoria, a subscriber to OpenAgent (and number 6 on the REB Top 100 Agents of 2016), to see what his thoughts were on this referral website:
Glen Coutinho shares: “I said yes to accepting leads from OpenAgent right from the first time they contacted me. My mindset is that it’s business I would not have otherwise got.”
Image source: Herald Sun
Glen then went on to share an example of how it works from his perspective:
“I was presented a listing that was $4 million by OpenAgent, I sold that property, then listed the buyer’s $2 million property. That then led to the neighbour selling their $2.5 million property with me, and subsequently the buyer of that home also became a client.
Looking in the mirror and being honest with myself, I know that the first vendor wasn’t on my radar or in my database. I paid OpenAgent the referral fee on the first property, but all the subsequent properties were mine.
You have to take a long-term view. OpenAgent is proactively calling [vendors] all day every day. They make calls sales people don’t make. They get into the business for us.
I appreciate that for some agents it’s not for them, but honestly, why would you not take a lead that is given to you, beautifully packaged, with all the legwork done?”
Marta’s view is that “Agents should look at us as an extension of their team. We’re their outsourced call centre. Our 60 outbound operators act as lead generators for the agent, saving time and effort by both educating potential vendors on the sale process and then determining if the homeowner is truly ready to sell.”
The real estate industry matchmaker
OpenAgent shared details of their selection process with me and a major factor is the agent demographics and personality traits that a vendor requests, such as age range, gender, selling style and whether they are multi-lingual.
With this in mind perhaps we should look at OpenAgent as the real estate matchmaker, albeit a detailed, algorithm-based one. Consider it more like eHarmony than Tinder! They gather a comprehensive picture of the agents by cross-matching testimonials with what you the agent tell them, alongside referencing the attributes of past property sales. In fact, I’d say they are the real estate agent equivalent of home improvement websites hipages.com.au or serviceseeking.com.au.
“The most rewarding part for us is when we review our customer feedback and satisfaction ratings,” says Zoe. “Our net promoter scores (NPS) are really high, which indicates that we must be doing something right.”
Sharing your details with OpenAgent
If you decide to use the services of OpenAgent (and currently thousands of agents have, including 75 of Australia’s top 100 agents), the best strategy you can have is to let them know as much as possible about you as an agent and your local target audience.
Perhaps you’ve found your niche working with downsizers or investors, have a knack for handling deceased estates or you’re in the business of family homes. The more specific you can be with the OpenAgent call center team the more effective they will be at matching you with clients.
So make an effort and get to know the OpenAgent call centre staff that look after your area. The better they know you and understand the types of houses you sell and who your ideal clients are, the better they will be at referring you leads.
And better still, if you contact the OpenAgent support team directly they will assist you by creating your profile for you and uploading all your testimonials onto the site. Simply email email@example.com or ring 1300 622 730.
Educating vendors on your behalf
In the last year, OpenAgent has helped 10,000 sellers. That’s 2.6 leads per agent, per year.
As well as acting as an agent advocate, OpenAgent is an education service that provides unbiased advice and information to sellers. They spend a significant amount of time with vendors explaining what to expect from their agent and encourage them to focus on the value the agent brings, not simply going for the lowest cost. They bring sellers up to speed on how the process works before they even make the referral.
Working for agents, not against them
OpenAgent assured me that they aren’t in the business of selling houses themselves, neither are they trying to disrupt the traditional real estate business model. They see themselves as a facilitator of ‘great customer experiences’, from the viewpoint of the agent as well as the seller.
The key advantages of OpenAgent are:
- It’s a free call centre team.
- Vendors sent your way are already educated on the selling process and primed to sell.
- You have an advantage going into appraisal – not only because you’ve come as a trusted recommendation from OpenAgent, but also because OpenAgent provides you useful insights about the vendor.
- You only pay a referral fee on a successful property sale.
- They keep a record of all your sales transactions throughout your entire career. So should you move agency, and have your sold property records magically disappear, you can now point people to your history as shown on the OpenAgent website.
Act fast when you are given a home seller lead
For the team at OpenAgent, timing is key. As Marta explains, “Even if you had the ad spend, we can do what agents can’t, which is to get in touch with interested vendors the moment they place their request. People don’t have a lot of patience; they want a fast response to their enquiry, so we set call centre KPIs around call-back times, ensuring that our chances of converting are high.
The leads that OpenAgent will offer you are ‘primed’ and ‘ready to sell’.
Marta and Zoe highlight that vendors typically sign up with the first agent that contacts them. So it’s imperative to act on an OpenAgent lead as fast as you can. From their viewpoint, it’s the early bird that captures the worm.
Significant financial backing
Backed by several industry investors including Pete Flint, the founder of US real estate giant Trulia which was acquired by Zillow, and Reinventure (a local fund backed by Westpac), Marta and Zoe have raised $20 million to date. They highlighted that this investment goes toward enabling them to build both the OpenAgent website and the call centre technology infrastructure.
To get this startup rolling, Marta and Zoe have spent millions of dollars on above the line TV advertising as well as Google search related advertising. By my calculation, if they’ve referred 3800 agents to home sellers to date, that’s an investment of $5,263 in each of their partner agents – something that you, as an agent, haven’t had to pay a cent for in advance.
My overall conclusion
After chatting with Zoe and Marta and hearing how dedicated they are to improving the customer experience between both the home seller and the agent, I believe their intentions are to work with the industry not against it.
With OpenAgent’s first mover advantage and strong investor backing, they stand a great chance of continuing to evolve their service to support the industry further.
There’s no denying that Zoe and Marta are ‘gutsy gals’. They’ve taken a punt on improving not only real estate agent referrals but the reputation of the entire industry. They’ve also taken on a huge amount of personal risk and are carrying the weight of their investor backing on their shoulders. And from what I could tell, for these women it’s not about the money (because they’re earning far less than their previous corporate jobs), it’s about the challenge of improving an industry.
Footnote: Thanks to everyone at OpenAgent that answered my questions including Johanna Seton, Zoe Pointon, Marta Higuera, Jorden Minos, Jamie Fleming, and Alex Cornish.