Don’t trust real estate agents? Neither do these entrepreneurs. Here’s their solution

OpenAgent co-founders, Marta Higuera (l), Zoe Pointon

OpenAgent co-founder and co-CEO Zoe Pointon says the idea for a real estate comparison service occurred to her a few years ago. At that time, she was dealing with a few properties of her own and discovered the service quality of agents varied widely. “There’s really a big difference between what some agents will do for you and what others will not,” she says.

“It’s a big decision when it comes to selling your house. There’s usually a lot going on in your life at the time and it’s strange that you can find a lot of information about a hotel, a restaurant, or a mortgage online but you can’t find any information about real estate agents,” explains Pointon, who’s based in Sydney, Australia.

These days, many people use online property listing sites to do research before heading to a real estate agent, but those websites are more or less virtual equivalents of the classified ads you’ll find in newspapers or freesheets.

What do people need?

More recent websites offer a mixture of unique company generated statistics, publicly available information and a powerful graphic interface in addition to traditional listing services. The most well-known examples of the newer hybrids include US-based companies Zillow, Trulia, and Realtor. In Australia, sites of this kind are still largely unknown.

Pointon teamed up with Marta Higuera, an old workmate, to build OpenAgent. Both had been in finance before arriving in real estate, and knew little about the mechanics of the industry. They approached their real estate conundrum from the consumer perspective. What could they do to make the slow, frustrating, and anxious process of selling a property more seamless and hassle-free?

“I think it sometimes takes an outsider to see the faults of the industry,” Pointon says. “What would it be like if we were trying to fix this for the consumer?”

They settled on a directory of real estate agents with a rating system and sales records attached. After doing some basic market research, Pointon and Higuera decided to demo their ideas, having developed the basic skeleton of the website that exists today.

Creating transparency

The problem for consumers has been the asymmetrical manner in which information is shared about the market. Real estate agents tend to have the upper hand in the equation. As a consequence, unscrupulous practices like dummy bidding (agents employing people to upbid a property) and underquoting (deliberately understating the value of a property to attract punters to auction) abound.

As an antidote to this, OpenAgent purports to offer accurate information for both buyers and sellers of property. Through OpenAgent, users can see who are the strong, reputable performers in a given market prior to making a commitment with a local real estate agent.

Booming market

“In the early days, we didn’t really have live search results like we do now, but we could still put up our website and do individual research for customers,” Pointon says.

OpenAgent initially gained traction the old-fashioned way, on a person to person basis, establishing relationships with local real estate agents who were keen on new business.“It was not easy at first,” explains Pointon, “but we realised that we could work with the best agents by adding real value for them. Once we started bringing them new business they were excited to work with us.” Slowly building on the momentum of a few initial sales, OpenAgent gradually expanded its network and later was able to reference its track record in convincing the more prestigious players to come on board. “We are very careful to only bring them high quality leads, and that means the best agents are happy to work with us.,” Pointon says.

From its humble beginnings as a two-person operation in Sydney in 2012, OpenAgent has grown to raise AU$8 million (US$6 million) in total investment from several different sources, including from Trulia founder and ex-CEO Pete Flint. According to Pointon, the service has tripled in size every year since it began and it has assisted in property sales of AU$2.5 billion (US$1.9 billion).

Pointon explains that the service now has live searches and features a majority of the real estate agents operating in Australia. There’s also a brain behind the platform. Contributing to the accuracy of search results is a set of sophisticated algorithms that improve results over time when new data is added to the website – a kind of miniaturised version of the way Google Search works. “The crux of it is, the more people we help, the better we become at it and we feed the results back into the machine,” she adds.