Are online estate agents outdated? Yes, says tech investor

One of Britain’s most successful technology start-up investors, who was the first to back lastminute.com, notonthehighstreet.com and made.com says we are already set for a second generation property technology regeneration, to be led by true technology firms, not online estate agents, who have simply placed the high street model on the internet.

Thomas Teichman, chairman of Spark Ventures and co-founder of brand incubator ‘The Garage Soho’, has backed London-based property technology start-up Settled, an online platform that directly connects buyers and sellers, removing the need for an estate agent entirely.

Teichman explains: “Online agents launched with big fanfares and many have referred to their high street peers as dinosaurs of the property world. Really though, online agents are effectively replicating bricks and mortar business models, they just happen to be doing it with a website and a lower price tag”.

Settled, which launched in 2015, has now facilitated the sales of £38 million worth of homes, and is beginning its next funding round, targeting an additional £1 million of investment.

The property technology company was founded by sibling entrepreneurs Gemma and Paul Young, both of whom come from technology and property backgrounds. Gemma was previously at Google where she was a Country Marketing Head and Paul was formerly Planning Director at tech startup Fast Thinking. The pair are passionate about reimagining how we buy and sell homes, developing technological solutions that solve the problems and frustrations felt by many.

According to Teichman, Settled not only vastly reduces the cost involved when selling a home (it costs sellers just £299 for Settled’s complete service), it focuses on improving the customer experience too. An early analysis of their data shows real benefits to the model, having seen fall through rates of just 1 in 15, against a UK average of 1 in 3 and a reduction in listing to completion times of 50%.

For Teichman it was his own personal experience through which he uncovered Settled; “When I tried to sell my own house through a hybrid agency I was very excited at the prospect of a new way and thought this was the future of property.

“Sadly I was bitterly disappointed. The experience was vastly similar to the high street, my property was overvalued making it unattractive to potential buyers and I felt like I didn’t know what was going on during the process. When I found Settled, from start to finish I felt in control; they helped me get the most from things…and this obviously fueled my decision to become an investor”.

Teichman’s investment comes as the popularity of consumer empowerment companies such as Uber, Airbnb and Nutmeg continues to rise. Technology enabled services certainly seem to be the smart way forward.

Recent research commissioned by Settled reinforces this with consumers indicating that actually, what they desire is not a middleman, but a more open, simple process they can control and understand. Of the 1,000 homeowners surveyed 58% believe they could do a better job at many of the tasks they have traditionally paid estate agents to do.

Settled’s CEO Gemma Young says: “Ask anyone who’s bought or sold a home if they enjoyed it and sadly the answer is often no. Yet we continue to pay through the nose on agent fees, we wait an average of three months for legal processes and we get a bit baffled by mortgage paperwork. With Settled we wanted to address all these problems head on to positively change the model.”

According to Gemma, the secret to Settled’s model is in every one of us. By focusing on the technology that will empower the homeowner and buyer, Settled’s model offers a seamless and more scalable alternative.

She says: “It’s important to place the people who care the most (sellers and buyers) at the centre of the journey. Settled’s team and the tools we’ve created provide around the clock support, empowering individuals within a process that’s historically been characterised by middlemen, Chinese walls and breaks in communication.
“Settled does the opposite of traditional or hybrid models, encouraging real connections between buyers and sellers and addressing the complete end-to-end journey – it’s because of this that things happen much more smoothly.”

Teichman’s co-founder at The Garage Soho, Sir John Hegarty, adds: “The breakthrough in the property sector has to be giving the seller and the buyer the tools to take more control of the process. Settled excited us because of their knowledge and investment into technology to make sure that this happens.”

Settled’s fundraise will be largely used to scale awareness of the platform with consumers and to continue further technological advances that will improve property transactions across the market.

Could this be a model rolled out in Scotland?