Selling your home online just got a whole lot more interesting. In just one week in June, two newcomers into the estate agency market received major injections of cash, to help grow their businesses. Established estate agent Savills has backed upstart YOPA, while Carphone Warehouse founder Charles Dunstone has put his substantial bet on HouseSimple.
And, as more established player PurpleBricks reported that revenues had soared by 448 per cent since April 2015, suddenly there's a buzz around online estate agency. Will it soon take off, as some analysts are predicting? Certainly it feels that momentum for a disruptive change in estate agency is upon us.
There in the thick of it are the four founders of YOPA. Savills, through its Grosvenor Hill Ventures vehicle, has acquired a minority stake by participating in Yopa’s latest, £16m round of fundraising, declaring itself “consistently impressed” by what YOPA is doing.
The company was born when Daniel Attia tried to sell his own home, and was so dispirited by the whole experience offered by the traditional estate agent he was pushed into action. Initially he envisaged a peer-to-peer exchange linking buyers and sellers: “We wanted to have no estate agency at all.” That was rejected, in favour of creating an online property agency: “But you could see pretty quickly, you just can’t deliver the customer service.”
Instead, the team tore up the plan and reinvented YOPA as a hybrid – an online estate agency service, but with local agents. These characters, who don’t have a high street shop, can meet customers, visit properties, and use local knowledge to price homes correctly for sale and they can conduct viewings. “We recruit five to seven year veterans, people who want to be their own boss.” These territory owners, of which there are currently 50, then manage all listings in their area.
YOPA listed 250 properties in May and it is spending heavily to build awareness, opting for major TV advertising as part of the mix. “We’ll continue to be aggressively marketing for the rest of the year,” promised David Jacobs. “We’ve a trust barrier to overcome.”
With the ability to scale up, all the effort now is on building volume. Home sellers get the YOPA service from just £780, saving potentially thousands compared to a traditional agent – but that means lots of sales will be needed, before YOPA starts to turn a profit. “We think there are ways of doing it,” said Attia, who sees online agencies working together to grow the market.
The four admit that the last year has been far harder than they thought it would be. “It takes a humongous amount of R&D and tech to do this efficiently,” said Attia. “It’s so much more than people think it is.” He points to the disarmingly simple online viewings calendar, linking seller, buyer and agent. “Everything needs to be efficient and well-oiled, so that the customer experience is great.”
For now, the Savills connection is an arms-length investment: “They are the best in their class,” said Attia,“and we’d be stupid not to learn from them.””
Visit yopa.co.uk to find out more.