Who owns your real estate data?

Real estate data is the new oil. Data is aggregated in various forms from estate agencies and is often sold back to them in one form or another. Companies use this data to enhance market insights and sometimes as a competitive advantage when launching new products. As an estate agency owner, you need to understand the risks and ensure that your data does not end up in the wrong hands.

Changing times

To understand the evolving landscape of real estate, we need to take a step back to the pre-internet days. In those times, estate agents were the custodians of all the relevant property data. As buyers, we had no choice but to reach out to an agent for access to the latest homes on the market or information on recent sales. I can still recall paging through a Saturday property classifieds newspaper for my first home! A small black and white photo accompanied by three lines of description caught my attention. It was upon me to contact the agent to gather more information. 

Fast forward to the present day, listing data is a commodity that is disseminated to every portal, social media channel, and other third-party platforms. The data packet for listings has expanded significantly, now containing more descriptive data, higher-resolution photos, videos, and virtual tours. This comprehensive information leaves very little reason for potential buyers to contact the agent until they’ve narrowed down their listing preferences. Consequently, it gave aggregators like property portals a lot more control as the first contact point to consumers and created opportunities to maximise revenue, by, for example, ranking listings based on agent spend.

The golden listing pipeline

Everything begins with the listing mandate. This is now a valuable commodity that’s shared on portals and social media channels where the data becomes part of the public domain. Agents will invest in professional photo shoots, videos, virtual tours, and detailed property descriptions to enhance a property’s visibility. All of this is of course done at a risk, as there is no guarantee of recovering marketing fees. 

Truth is, your listing data is now as valuable as gold to 3rd party data aggregators including property portals, financial institutions, and property insights companies. Ultimately, the companies that have the best selection and highest quality of listings have a competitive advantage.

It comes as no surprise that companies will go to great lengths to secure and protect this golden listing pipeline, as it is ultimately linked to higher revenue potential. This is why Entegral has been actively involved in challenging access to listing data with the recent Competition Commission’s Market Inquiry.

Consumer lead data: the pot of gold

Comprehensive listing data serves as a magnet to a valuable source of revenue: harvesting consumer lead data. Leads ultimately fuel a portal’s growth and allow for the charging of hefty advertising fees from agents. It’s a complex relationship, perhaps leaning more towards greater dissatisfaction for those agents who do not calculate the return on investment (ROI) for their advertising expenditures.

A typical buyer lead contains a wealth of information:

• Contact details. South Africa’s POPI Act sets out minimum standards regarding accessing and processing any personally identifiable information.
• Consumer intent: are they looking to buy, sell, rent and in what timeframe;
• The listing mandate they enquired about, reveals a host of critical metrics such as potential purchasing power and area they are interested in;
• The agency and more importantly the agent that received the lead data and when aggregated, reveals the top lead-producing agents in an area;

You can see how valuable this data could be for any real estate company, bond originator, real estate analytics company and related financial institutions to strengthen their market position. Through the years we’ve seen many industry attempts to invest in or build portals. If you can secure (or own) these channels, generating consumer leads gets exponentially cheaper when there is little competition. 

What is the value of your listing data?

How valuable is your listing and lead data and can we put a price tag on it? I would say it is relative to a few things, including:

• Accuracy of the property listing metadata captured that describes and categorises the property including detailed features, size, upgrades and general condition; 
• The mandate timeline details, probably the most valuable asset: what was the property listed for and sold, how long did it take, who was the listing agent, sales agent, buyer and seller, how was it financed and what was the commission earned;
• Visual media including the number of photos, videos, virtual tours and floor plans;

Can we put a monetary value on this data? Most probably if we factor in all the operational costs for the typical estate agency and work some numbers back. Are we missing an opportunity for agents to exert better control and earn a modest fee for the data supplied to these companies? 

How can your real estate data be used in unfavourable ways?

a. High Portal Fees
Where listing data is aggregated and marketed by companies willing to incur losses to gain market share, you will inevitably end up with high portal fees and find yourself locked into their services. As investors seek a return on their investment, these subscription fees will persistently increase and effectively help these portals take a larger share of your commission pie.  Most of these fees do not reflect current market conditions, for instance, to compensate for slower sales seasons.

b. Fund unknown companies
Your listing data can be scraped from portals and your website to power 3rd party platforms. Many portals thrive on scraping and aggregating data which Google will index and ultimately result in consumers finding these websites. These websites are cluttered with ads that provide income when ads are viewed or clicked on. You are getting nothing in return.

c. Help launch new business ventures
Listing data can be used to launch new portals and even direct competitors to your business. The most well-known case in South Africa is that of FNB who in 2018 tried to launch a private sale marketplace. The marketplace was made attractive to consumers by launching with comprehensive listing data from estate agents, supplied by a portal.

In the wake of recent AI advancements, another threat emerges. Generative AI companies, for example, are now training their chatbots on publicly available data, without providing compensation or credit to the source. This could very well be specific content that you’ve labored over for years, showcasing your market expertise, or your listing data – a veritable treasure trove of valuable information.

d. Discounted marketing fees for your competitors
When large property companies and bond originators invest in property portals, they acquire the marketing power to control that portal as shareholders, often to the detriment of smaller agencies. The Competition Commission highlighted how free shares and discounted advertising fees were offered to large real estate companies in exchange for listing support for a portal.

e. Market insights for competitors
When your competitors have a shareholding in any real estate company or portal that has access to your listing and lead data, how confident are you that this data cannot provide insights into market activity, your agent performance and a range of other metrics? Is this data perhaps used to build new tools? There is currently very little transparency on the shareholding of portals and how data is consumed.

The transparency and data ownership issue

To tackle the transparency and data ownership issues in our industry, Entegral participated in the recent Competition Commission OIPMI enquiry which resulted in a successful outcome. We highlighted issues in the industry related to transparency and ownership including:

1. Exclusivity between industry organizations and online platforms & portals. We felt that this not only restricted competition but also led to discriminatory pricing and a lack of transparency. The Commission confirmed our concerns with remedial action and instructed the disinvestment and association of industry organisations from portals.
2. Access to listings. When real estate platforms restrict access to data for 3rd-party platforms, this severely limits competition, which can promote innovation and ultimately help lower prices for estate agents. We also raised concerns about how data is used and how companies act out of self-interest to protect their market share, to the detriment of smaller independent companies.

Your listing data, your competitive advantage

As you can see, as an estate agency owner the amount and accuracy of data you’ve gathered over the years is invaluable to your business and you are sitting on a gold mine. It is critical to understand:

• Who owns the platforms where your data is captured
• Where your data is sent and who owns these related companies
• What mechanisms are in place on these platforms to protect your data

Entegral’s Standpoint

Entegral has been operating as a 100% independent company for almost 20 years, championing transparency within the industry as one of our core values. As an independent company, we don’t have shareholders who can cloud our values or who require data-sharing agreements. Our focus is on building highly efficient & secure real estate platforms that will allow us to attract and work with the best estate agents out there.

We believe that clients should have a choice with whom they share their data and where they advertise. This is why we were the 1st to launch open APIs (interfaces) and a listing syndication platform that allows for selective advertising on portals. While we own property portals, we’ve also supported third-party portals through the years, adding more exposure for our clients, and will continue to explore new opportunities.

We will continue to advocate better transparency on portal ownership and how data is used once you’ve landed a mandate or made that sale. Building more sustainable marketplaces that connect consumers and agents is part of our goal with MyProperty South Africa and Namibia.

Above all, our promise to you is to protect and respect your real estate data, safeguard it using industry best practices, and not claim ownership of or sell this data to any company.

If you have thoughts on real estate data ownership please do not hesitate to reach out to me or our team.