Australia very OpenOpen to ‘closed’ home sales:
new prop-tech business leveraging off-market selling surge
With international students set to return to Australian shores next month, new Melbourne-based prop-tech business, OpenOpen, is predicting a sharp increase in interest and demand from international purchasers.
Now it’s providing a platform that addresses pain points for both sides of the transaction: applying a ‘no sale, no fee’ philosophy for sellers; and opportunities for direct and transparent purchases for buyers.
OpenOpen Vice President Emilie Ouyang explained that the move towards off market sales has become extremely prevalent in China, Hong Kong and the US, and that OpenOpen had already secured $10m in seed funding to make a serious dent in the Australian market.
“While the nature of off-market transactions means there’s no readily available data to accurately gauge the volume of properties changing hands privately, it is clear the trend is ‘real’ and it’s here to stay,” she said.
“There are many reasons why people are opting to buy and sell homes off-market, including quicker sale and avoiding the hassle and cost of a drawn-out marketing campaign and open day inspections.
“A marketing campaign through an agent can cost in excess of $5,000 without any guarantee of results.
“We also find that with off-market sales there’s less of the emotion and mayhem of an auction campaign, where buyers can get caught up in the frenzy – which is a common real estate trap.
“Privacy is another key motivator and it’s not just high-profile celebrities or businesspersons wanting to maintain discretion about their personal lives and fiscal transactions, but everyday Aussies who equally also don’t want family or acquaintances scrutinising their financial decisions.”
OpenOpen’s initial market research has revealed a general dissatisfaction with real estate agents’ performance, including:
· 20% felt that their agent(s) do not present relevant information about recent sales to sellers
· a quarter (25%) said their agent/s did not estimate the value of properties as part of their presentation/s to sellers
· more than half (54%) reported that their agent/s did not present results of similar homes that had recently sold on the market
· only one-in-five (20%) were provided with expectations about average time on the market.
“There is also a general reluctance from interested international buyers to use real estate agents and a huge swing towards non-agency platforms, such as OpenOpen.” Ms Ouyang said.
“Australia has the highest number of international students in the world, comprising approximately 20% of the country’s tertiary enrolments, so with the recent announcement that fully vaccinated foreign students are allowed back into the country, we’re expecting increased interest from parents wishing to buy investment properties on their behalf.
“Previously, buyers keen on the idea of off-market opportunities often faced the difficulty of knowing how and where to get involved, so OpenOpen turns this around by being very accessible and transparent.
“When English might be a second language, dealing face-to-face with an agent can be an intimidating and unpleasant experience.”
While ‘no win, no fee’ has been a long-term offering in the personal injury law space, OpenOpen is following suit with its ‘no sale, no fee’ approach.
“Sellers pay a 1% service fee only after their property has been sold.”