Hi everyone and welcome to another episode of Straight Talk with your host Firas Al Msaddi. Today I am joined by Omar to discuss a really interesting topic in particular related to Dubai real estate agents and real estate agencies.
Omar thank you so much for being part of this episode, how are you?
Omar A.: I’m great and thank you so much for having me here. I had to be part of this episode because it is a very interesting one as it has to do with my background. I had worked in the past in the pro-tech space with property portals such as Dubizzle, Property Finder and I even established my own property portal which operated across four countries internationally. So I wanted to be a part of this and the topic is “Property Portals” ran by real estate agents or real estate agencies
Firas: So basically there are two initiatives today as we speak in the Dubai real estate market, each of these initiatives is owned by a consortium of real estate agencies who are working on developing and ongoing live with a new real estate portal. So I posted on my social media and I was bombarded by questions and I thought that it would be good to get the answers and everyone’s thoughts to everyone else in the market not only to CEO’s because currently it is only being discussed at a CEO level.
Omar: Correct, and the interesting thing is that these are all questions from real estate agents as well so let us get into that.
First question comes from a real estate agent in Dubai who says “Why not list your properties on a real estate portal that is owned by many real estate agents or controlled by many real estate agencies”?
Firas: I think the idea sounds great however only if this portal is equally owned by let us say 200 real estate agencies
Omar: Are they not owned equally by all agencies?
Firas: No because it is owned by so many but controlled by one or two or three. And in effect even if it is owned by 3 or 2 by equal shares, that means that they would have equally mutual interests. So it is like you are dealing with one controlling party who in reality, is your competition. Which also means that all your listing and leads will funnel through them. Yes, we can have so many mottos of “we protect the confidentiality and secrecy” or what so have you.
Omar: That is actually interesting that is the next question that says “would other real estate agencies trust the confidentiality aspect of the data available on a portal that is controlled by other real estate agencies? If yes, will this last in the future and why? “
Firas: I think I would leave the judgement to real estate agents I am sure that this video is being watched by many real estate agents in Dubai. But I think as a CEO, I would be concerned with the secrecy of information related to my agents because my job as a CEO and a leader is to protect my agents and the effort done by them. If my agent is working for weeks to get listings and these leads are funnelled by 2 or 3 other real estate agencies I mean why would I do it?
Omar: Ok so just to get a better visual of this, we are talking about a real estate portal that has multiple real estate agencies that run it as shareholders, with what you are suggesting 2 or 3 major ones on the top who own the majority shares or control the majority.
Firas: Yes
Omar: Ok so that makes sense in terms of confidentiality so you have people who compete against each other essentially who are sharing confidential information from listings to agent details to inquiries as well.
Firas: For us, it is basically data and information which is time-sensitive. If I get my lead 2 days late, they probably have already struck a deal with another agent. Recently, two months back, and this is still a fresh topic, 2 or 3 agencies represented a consortium of many agencies around 100 agencies plus, to negotiate a Covid-19 relief package with third parties. So let us say 2 or 3 agencies they call themselves the “committee” of this consortium of 100 agencies, we are going to discuss or negotiate the relief packages with third parties, so the third party could be a portal for example where you would get a few months for free or get some extra added benefits. And what they did, the committee actually went and cut side deals with these third parties and left everyone behind. So this is still a fresh story I mean how can I trust the same exact committee to be part of a portal and to run this portal where I might own 1% or 5% or 3%, and they own 40%.
Omar: Okay let us go to the next question, “Can this new agency owned portal compete with the big players? If yes, how?”
Firas: I think the only edge they have is having unique listings which means they have to get every agency on board to ultimately, pull their listings out of the main portals that exist in today’s market and put it as unique content on this portal. I think that this is very very unlikely to happen and I don’t think that any real estate agency would dare pulling out their listings completely from portals especially in a market that is lead by or dominated by the resale or leasing more than the off plan. So no I do not think that they can do it, and hence it would be easy to create that unique edge.
Omar: That was what I was going to say, why would anybody want to pull down their listings? I understand the drive behind it but why would anybody want to cut that life-line off because the truth is, in my opinion, I think that a good amount, I am not going to say the majority but a good amount of deals that are being closed do come from property portals so why do you want to cut that life-line especially during this period
Firas: All the agents would leave them. I think that this would be a good recruitment hook, if you come off the main portals you would be bombarded by other real estate agencies that say “ listen we are still with these portals come and join us”
Omar: Moving to the next question “Can the founders of the new property portal get it to work without the support of the real estate agencies? If no, why and how?”
Firas: Ok guys, it is almost impossible, okay? If other real estate agencies, who need probably 50 other real estate agencies with strong listings in order for them to get this portal up and running on the medium-term, not on the short term. So you know it took the major portals in the market probably anywhere between 8 to 14 years to get really up and running and to dominate. In the meantime in the process, many other portals came and left so for these portals to come up, they need other agencies. So without you other agencies, new portals owned by a minority of real estate agencies can never see the light. We can never say never but it will be very challenging.
Omar: What advantages and disadvantages does a new property portal with little online presence offer to the real estate market?
Firas: No advantage I think, you cannot come up with better tech than someone who has been in the business for 12 and 14 years and is still aggressively growing. So I think the only advantage is getting listings on a unique and exclusive basis on this portal which is difficult. If it happens then good for them because I would enjoy more space with portals myself.
Omar: Let us go on to the next one, “How many businesses or brokers are trying out for this project and when is it expected to go live?”
Firas: I do not know. I mean there are two initiatives so two new portals owned by real estate agencies in Dubai and I think on each side you have probably between 8 to 10 agencies.
Omar: How did the idea become to do two was there a major group ….
Firas: I think there was one and then they decided or started arguing and they each said they would do their own. I think even the idea of having a consortium of real estate agencies, I mean we have witnessed many acquisitions and many unions in the past ten years in Dubai that did not last one year, among real estate agencies. I think too many alphas in a room in a market that is not so mature is difficult to work
Omar: What was the motive to launch this new property portal? And I think that is clear I mean I have dealt with agencies or real estate agents in the past that actually complain about you know having a property portal monopolize the market or having a couple of them do that. So in your opinion would that be the main motive behind launching this?
Firas: I think that would be one of the triggers, but the main motive for the founding agencies is to make top dollar out of it because they are tempted by how much the dominant portals are being evaluated today. Also, to get more exposure like you are getting exposure to leads and to data. You know if that portal lives for 5 years, if they were very secretive and confidential and they decide to sell this portal and they have access to all this data, they are not going to leave your data. They will have all the data for every single real estate agency in Dubai.
Omar: Would listing prices be competitive compared to other portals? And would you think it would be effective at all?
Firas: This is definitely coming from a CEO really concerned about the cost. But I mean we are all concerned about the cost today. All new portals when they come; I remember the current dominating portals, used to come to me 10 years back and used to try to talk me into getting my listings with them. I was a very small agency back then so yes they always start with free of charge offerings and then they start increasing their prices gradually.
Firas (enthusiastically) – Real estate agents in Dubai, if you wish to have a monopoly owned by your competition, then support them today.
Omar: Is the current market conducive to a new portal?
Firas: I think portals are all about, or more about resale and leasing market, which means yes the market will always support a new portal if they have a competitive edge
Omar: What do you think that competitive edge should be for a property portal?
Firas: I think the only thing they can come up with today is simply the unique listings. I think there are so many moving parts to it, Omar, I mean you started a portal and there are just so many moving parts to it from branding to the back end technology of it to the cost, to actually funding it, it can drain big pockets; to get advertising and to keep getting new leads especially in a competitive market.
Omar: Ok now just quickly from my opinion and what I see you pushing towards here is understanding that real estate agents or real estate agencies are not prop-tech specialists and this is something that I have noticed in the past from being in that space so a lot of real estate agents wanting to explain to us what to do or how to improve the business and in reality, real estate brokerage and prop-tech are completely separate fields. And I think that it is very interesting to see that you are actually trying to stay focused and gear it on what you guys do best and possibly allowing other people to stay focused on what they do best as well in the prop-tech space.
Firas: You know honestly Omar, I always focus on myself and on my business and what I need to get from the market. I do not focus on what other people do. What I am trying to say if someone is creating a new portal and that would be very successful, great good for them. Once it becomes very successful I will become one of their good clients, right?
Omar: That was my next question, would you actually consider joining this portal?
Firas: As a shareholder? No way itis impossible
Omar: Or simply to list your listings?
Firas: I am one of the largest real estate agents in Dubai today and I have over 3000 listings so I have a big weight when it comes to actually supporting a portal so I won't support someone to become a monopoly especially if it is a real estate agency owned, I don’t think it is wise. I think that there is so much risk in it, I mean even agents will start complaining you know? Imagine if you were an agent and you worked two weeks on a listing you advertise it but then the lead that came to you was actually called by other agencies that own this portal so no it is just messy for me I think
Omar: So as a conclusion to this, what would your takeaway be or your advice to anybody in the market who is considering joining the portal or being part of it etc
Firas: I think people should understand that they are not joining a portal owned by many agencies, they are joining a portal owned by many agencies and controlled by only 1,2 or 3 agencies. I think there is a great deal of risk for other agencies in Dubai – I wouldn’t join it myself and I wouldn’t advise anyone to join but yeah if you guys all decide to join then I will become one of your best clients
Omar: Well thanks a lot of having me I really appreciate it. And would you have me on for another episode?
Firas: Definitely!
Omar: Ok sounds, good, thanks!
New Property Portal advice
Agencies using property portals have no secure data to their leads or listing inquiries. The portal controlling entities have access to all their data.
Dubai property portals are controlled by a small minority of 2-3 entities. Unique listings on the new property portal is the best way to compete with the more well-known property portals in Dubai.
Reasons behind new property portal are; capital gains and exposure and collection of real estate market data.
No likely advantage for the new property portal to compete with the existing competition due to no online presence.