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Online real estate savings

Significant costs can be involved when buying and selling property but a new online service could help investors keep those expenses in check.

Thursday, September 8th 2016, 4:00PM

by Miriam Bell

New Zealand’s first online real estate service has gone public today and it offers users savings in both time and money.

Proppy, which is a licensed real estate agency, offers marketing packages, online property auctions, digital signing of legal documents and the ability to complete a property transaction online.

Proppy’s managing director, Tyson Walker, said every aspect of the buying and selling process can be done online, saving users’ time and hassle.

Users can also save money as the service only charges 1.5%* commission, as compared to traditional agency commissions which tend to be around 2.95%* – 4.0%*, he said.

“This means that someone selling a $1 million property could save up to $21,000 in commission – the equivalent of a new boat or a family holiday overseas.”

This is possible as the service minimises the role of the middleman, connecting buyers and sellers directly through its website.

Walker started the service after going through frustrating experiences when trying to buy a property for his family.

He said he knew there was a better way and conducted extensive market research to see if there was a market for the type of service he wanted to provide.

“Our findings showed a widespread, longstanding dissatisfaction with traditional real estate processes amongst property sellers and buyers alike.

“People’s experiences were the same no matter whether it involved buying or selling a one-bedroom unit in Onehunga or a five-bedroom mansion in Takapuna.”

The main complaints were variable service from real estate agents, variable levels of honesty about the properties, lack of control for sellers, and prohibitive expense for buyers and sellers.

While people were interested in avoiding these issues, they tended to feel that private sales, or using the homesell model, left them on their own and potentially exposed, particularly in a legal sense.

Walker said Proppy offers an alternative, which has a solid legal framework around it and supports buyers and sellers to take control of the whole real estate process.

“Most people are used to buying and selling things online these days, so many aspects of our online platform will already be familiar to them. Selling property online is the way of the future.”

However, technical support and REAA-qualified real estate advice are available to buyers and sellers.

The service has several other points of difference from the traditional real estate model.

One is a “buy now” option, which functions in much the same way as the “buy now” option on Trade Me and allows the seller to list a property with an unconditional price for a quicker sale.

Another is that sellers have to provide an approved building inspection report and valuation with their property listings.

Walker said this will facilitate more cost-effective decision making among buyers as they won’t have to purchase reports every time they want to undertake due diligence on a property.

“It is also easier for sellers because they will only have to go through the building reporting and valuation process once and it increases their buying pool.”

Proppy is currently only operating in the Auckland market, but will be rolled out to other centres progressively - starting with Hamilton and Tauranga in the next few weeks.

[*excluding GST]

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ANZ 5.19 4.05 3.95 4.49
ANZ Special - 3.55 3.45 3.99
ASB Bank 5.20 4.05 3.95 4.39
ASB Bank Special - 3.55 3.45 3.89
BNZ - Classic - 3.55 3.45 3.99
BNZ - Mortgage One 5.90 - - -
BNZ - Rapid Repay 5.35 - - -
BNZ - Std, FlyBuys 5.30 4.45 4.35 4.55
BNZ - TotalMoney 5.30 - - -
China Construction Bank 5.50 4.70 4.80 4.95
China Construction Bank Special - 3.19 3.19 3.19
Lender Flt 1yr 2yr 3yr
Credit Union Auckland 5.95 - - -
Credit Union Baywide 6.15 4.95 4.95 -
Credit Union North 6.45 - - -
Credit Union South 6.45 - - -
Finance Direct - - - -
First Credit Union 5.85 3.99 4.49 -
Heartland 6.70 7.00 7.25 7.85
Heartland Bank - Online - - - -
Heretaunga Building Society 5.75 4.80 4.95 -
HSBC Premier 5.24 3.35 3.35 3.35
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - - - -
ICBC 5.15 3.18 3.18 3.20
Kainga Ora 5.18 4.04 3.95 4.39
Kiwibank 5.80 ▼4.14 ▲4.30 4.64
Kiwibank - Capped - - - -
Kiwibank - Offset 5.15 - - -
Kiwibank Special - ▼3.39 ▲3.55 3.89
Liberty 5.69 - - -
Napier Building Society - - - -
Nelson Building Society 5.70 4.25 4.15 -
Pepper Money Near Prime 5.64 - 5.44 5.44
Lender Flt 1yr 2yr 3yr
Pepper Money Prime 5.18 - 4.98 4.98
Pepper Money Specialist 7.59 - 7.39 7.39
Resimac 4.50 4.86 3.89 3.94
RESIMAC Special - - - -
SBS Bank 5.29 4.85 5.05 5.49
SBS Bank Special - ▼3.55 3.39 3.89
Sovereign 5.30 4.15 4.29 4.55
Sovereign Special - 3.65 3.75 4.05
The Co-operative Bank - Owner Occ 5.15 3.49 3.59 3.89
The Co-operative Bank - Standard 5.15 3.99 4.09 4.39
TSB Bank 6.09 4.35 4.25 4.69
Lender Flt 1yr 2yr 3yr
TSB Special 5.29 3.55 3.45 3.89
Wairarapa Building Society 5.70 4.85 4.99 -
Westpac 5.34 4.15 4.09 4.49
Westpac - Offset 5.34 - - -
Westpac Special - 3.55 3.45 3.99
Median 5.34 4.04 4.09 4.39

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