Utilising technology to provide transparency
1 minute read

Utilising technology to provide transparency

Utilising technology to provide transparency

by Todd Stevens | April 12, 2018 | 1 minute read

CEO of Upside Realty Adam Rigby has created a company that he believes is genuinely different to others in the real estate industry — a business that embraces and adapts to technological developments to create the best possible experience for its clients.

Adam Rigby, Upside Realty
April 12, 2018

Smart Property Investment’s Phil Tarrant catches up with Adam to know how customer transparency has come to be one of their main points of difference and how their fixed-price service offers the same value, if not greater value, than what one would expect from a commission-based agency.

Adam will share how he thinks changing technology will impact the real estate industry in the future, how Upside Realty is increasing efficiency and client satisfaction, and how he thinks the industry has changed recently.


If you like this episode, show your support by rating us or leaving a review on iTunes (The Smart Property Investment Show) and by following Smart Property Investment on social media: Facebook, Twitter and LinkedIn.





Airbnb’s impact and why more investment properties are being sold
World’s first VR display village unveiled
Should property investors be scared of the future?
Will artificial intelligence replace real estate agents in the future?



Announcer:    Welcome to the Smart Property Investment show, with your host Phil Tarrant.

Phil Tarrant: Hello G’day everyone, it's Phil Tarrant here. Thanks for joining us on the Smart Property Investment show. Always a pleasure to have you on board joining us as we navigate this crazy world, which is property investing, creating wealth through property, which is the backbone of the show, and of Smart Property Investment. And we're always looking at different ways to approach the traditional actions and activities that happen in investing, in creating a portfolio. Whether it's buying, whether it's selling, whether it's managing, whether it's renovating, whether it's financing.

            We live in a very interesting age where there is some really smart people coming into this space who are approaching what has been always done a particular way differently, a lot of it augmented through technology.

            So today we're going to get into some property tech-based stuff. We're going to be looking at how one particular organisation is looking to change the way in which people sell their properties. And if you keep connected with the market, and the media, and you read the papers, and even listen to Smart Property Investment Show, you'll hear of a lot of different people coming into this market now considering ways in which to change the way things are done.

            So joining me today I have Adam Rigby, he's the CEO of Upside Realty, and he's trying to change the way people sell property. So how are you going?

Adam Rigby: Good. Thanks. Thanks for having me, Phil.

Phil Tarrant: So this ... Are you guys, we'll get into the meat of it, are you guys prop techs? Or property tech? Or you are a real estate agent? Or you're somewhere in the middle?

Adam Rigby: Well, I guess prop tech is the sexier name for it.

Phil Tarrant: Yeah.

Adam Rigby: But yeah, we do have agents. So we are actually an agency, a fully licenced, a full service agency, as well as having a technology that helps get a better result for us, and our vendors and buyers.

Phil Tarrant: Okay. So chat us through Upside, what is it, what does it do, why is it different?

Adam Rigby: Yeah, so I think what we've done is we've tried to approach the whole agency business as if you were to build it from scratch today. If you had a clean slate, no legacy history, no 100 year old franchise agreements, etc. in place, and you were to do it from scratch. What would you do, and what do consumers want? And what we've seen is there's a lot of dissatisfaction with the pricing in this space, the service levels, and the transparency around the process. So what we've used is we've technology to build a platform, which means that vendors and buyers can see everything that's happening during the process. We've got an amazing pricing policy and approach, which is a flat fee of $7,500 for a private treaty, and $8,500 for an auction. And yeah, and what we're doing is lifting the service levels you get for that, and we're seeing great results.

Phil Tarrant: So really interesting. I like where your head space is and I guess your approach to this is that if you're building this from scratch, without any legacy or historic way of the way things are always done. You've rethought this, and looking at your background and you were involved, CEO of Infochoice, which was I think one of the first real comparison sites back in the day, right.

Adam Rigby: Yeah, yeah.

Phil Tarrant: That was obviously a very successful business and has gone on to new things under new stewardship, but ... So this thought process about how do we provide information to people easier, more succinctly, that gives them the power to make decisions ... Is part of your DNA. So you've pulled that into Upside, so you're looking to use technology to augment the skills and capabilities of the individual, the human. Is that pretty much what you do?

Adam Rigby: Yeah, I think there's a couple of things we use the technology for. One is really increasing the transparency of the process. So just like consumers love the fact when they order an Uber, you can see where the car is, how far away it is, you can get an estimation of a price, right. Well that's become second nature to us now and that's what we expect in modern products. And when you look at the way that real estate used to be sold, is that it was pretty much all the communication, all the information was through your agent via telephone, and really that's still most of the way agents work today. So how many people saw the property, where you're at with getting it prepared for the campaign, what's the negotiation process. All of that is kind of hidden via ... Unless you have a conversation with the agent.

Phil Tarrant: Mm-hmm (affirmative).

Adam Rigby: So what we've done is we've opened all of that up so that you can log into your private website and see every step of the process of selling your property, and that's fantastic particularly in the investment space if you're not (1) in the same location as your property or your agent, so it's much harder to contact them. We've sold properties for vendors who are overseas, so even that is even more effective because they can log in, in the middle of the night our time and get the full update that they want to get on a daily basis. So we think that transparency is a very important part of giving consumers the service levels they want.

            Secondly, we use it to really increase the efficiency of the organisation. So we obviously we get inquiries in digitally these days, so we get an inquiry in, we get communication, and then we can obviously make sure that the organisation is responding in a very timely fashion. We have a 24-7 call centre if there's any questions from vendors or buyers. All of that is tracked and managed properly in a very advanced, integrated CRM. So that we can deliver a much higher service level to our customers, and it's really just about as you sort of described in your intro, if you were to do things from scratch with a new thought process, using modern technology to do a better job at something that's been done in a certain way forever, well that's what we've tried to do.

Phil Tarrant: So I'm going to challenge on a couple of things here, which ...

Adam Rigby: Absolutely.

Phil Tarrant: ... I'm going to have a bit of fun with this because I get what you're saying. It makes sense to me, but I also get to understand the ... working with Smart Property Investment across real estate, I connected with people that run big franchise groups and large family-based or generational organisations, which are huge, and sell a lot of properties across Australia. So I always see two sides of every argument. So on one side, you're changing in a way using technology to empower the vendor to have a lot more insight into the process.

Adam Rigby: Mm-hmm (affirmative).

Phil Tarrant: And as part of that saving them money through commission, so it's a flat fee etc. as you've explained. Which is cool, it's very modern.

Adam Rigby: Mm-hmm (affirmative).

Phil Tarrant: The other side I would have people saying to me, "Phil, if someone, if an agent's getting paid 7 or 8.5K at an auction, you're probably not getting a good agent". There's someone who is not the top of the tree and another argument would be, well if it's a $2 million property, wouldn't you want to maximise the sale price of that and try and get $2.1 million, $2.2 million. And only an agent who's commission based can achieve that. So let's break that down. The first one ...

Adam Rigby: Absolutely.

Phil Tarrant: A fixed price versus commission.  Are you still going to get the value, are you still going to get the price that you need.

Adam Rigby: Yeah, so I think there's a few things to getting a good price that we think are very important. Like firstly, is making sure you understand the, how to market the property, and what does that look like. So that's everything from making sure the photography shows it and its features off well. Secondly, it's making sure that you're obviously marketing it in the right locations. Thirdly, it's making sure the price is right, that's very important. And lastly, it's making sure that the conversations with the buyers ... And the buyers are very well-serviced, because that's actually where you can lose buyers who can come to the table if they're not serviced properly. And that means that you can lose genuine buyers in the process. And lastly, I think if you can create a contested purchase or purchase process, then obviously that's when you get your best outcomes, right. So whether that be in private treaty or auctions, both possible. It's just creating that tension and a competitiveness during the pricing in the transaction.

            So that's ... Those things hold true regardless, right. So we use all those processes just the same in a flat fee model, as anyone would in a commission earning model. That is the way an agent is paid, right. So to suggest that the pricing that you're offering the service is necessarily determining what the behaviour of the agent is, is not correct, right. The real estate industry is quite unusual in that it's a commission only industry in sales. Most of sales in the world doesn't work that way, right, and they still get great results. So it's a legacy of a certain process and thinking that the industry started with, doesn't mean that it doesn't get a good result.

Phil Tarrant: Okay. So by spending $7,000 odd versus a commission base, that means you're not getting an agent who isn't as capable as a commission orientated agent.

Adam Rigby: All of our agents were experienced agents doing commission only roles before. So I mean it's the same agents and the guys in Sydney ... We've got ... We've just started up in Sydney and the average years of experience is 14 years in major brands.

Phil Tarrant: Okay.

Adam Rigby: And so we go through great lengths to make sure we hire very good agents. That's part of what we do. We pay above the normal expectation for an OTE agent, so again you've got to divorce these two issues.

Phil Tarrant: Mm-hmm (affirmative)

Adam Rigby: So, and we do give our agents a bonus based on results they get, and that can be every combination of things of satisfaction of customer, the result, number of sales, etc. So the way you pay the agent doesn't necessarily influence the cost of what you're asking the consumer to pay. And I'll give you a couple of thinking points. One, property has risen 600%, I think in the last 20 years. Now commissions have ridden the back of that, right. Now if you look at the salary increase over the same period, it's more like 200% or 150%, right. So why is it for the same role and for the same job, that they're getting a 300% lift on salary over everyone else. Has the job become more complex? Are they offering better service? No, all of those things are not true. It's just a coincidence and a mechanism because of the way the market has behaved, as opposed to the fact that 50 grand is the right price to get a good person. That is an arbitrary number that just happens to be the case.

Phil Tarrant: Yep, I get that. But you know the point I guess is valid in that agents' salary have risen in line with the speed of market growth, and if you operate in Sydney and Melbourne, you're probably been doing alright for the last ....

Adam Rigby: You've seen great, great growth.

Phil Tarrant: So you mentioned that ... I guess, two things. How do agents sort of get into the business of real estate, because I'm interested in this as well as ... Stay with us, investors, because there's info for you coming. How do agents work for you? Are they sort of independents? Do they work underneath you? Or are they actually part of the brand or ...

Adam Rigby: Yeah, they're full-time employees ...

Phil Tarrant: Okay.

Adam Rigby: ... And we pay them a salary and we give them a bonus based on their performance.

Phil Tarrant: Okay, and that's slightly different to how most agents operate. They're normally sort of commission only.

Adam Rigby: Mm-hmm (affirmative).

Phil Tarrant: You eat what you kill type of scenario. So these guys are salaried and incentivized to deliver the best outcome for their vendors as possible.

Adam Rigby: Yeah, exactly right.

Phil Tarrant: Okay, so they've still got skin in the game. The better they do their job ...

Adam Rigby: Yes.

Phil Tarrant: ... The better they do for themselves.

Adam Rigby: Yeah, like most non real estate sales roles. They have a base salary, which is enough for them to exist I guess.

Phil Tarrant: Yeah.

Adam Rigby: And then they've got upside in their salary component by achieving goals for the company, which means achieving goals for vendors and servicing buyers well, etc.

Phil Tarrant: Okay.

Adam Rigby: So, they still absolutely need to perform and they have huge incentive to perform. But it doesn't create bad behaviour either, right. So I think there's an interesting thing when you think about commission only sales, which is very counter-intuitive, which is you think automatically, "Ah, if I'm getting a cut of the sale price, I'm just going to push as hard as I can to get the highest price possible", and that's the logic that gets used against us all the time.

Phil Tarrant: Yeah.

Adam Rigby: But it's actually completely flawed, because there's a couple of things. (1) There was a study in the US and a book written called Freakonomics, which I recommend that the audience ... Okay, because it actually talks about this exact topic. But what you'll find is that the incremental commission that an agent will earn by pushing a price by $10,000 or $20,000, it's not worth their risk to maybe lose the buyer. It's just not worth it. So they'd rather close the sale and guarantee themself their $20, $30,000 commission and then quickly move to the next potential, rather than try and push for another two or three weeks to get another $200,000. It doesn't add up if you think about it, right. Because if you think about your month, and you said okay to get a property on board, put it through a campaign, do all the open houses, let's call that a month's work, right. We'll oversimplify it but let's call it a month's work if it's going to auction. Right, so let's say you do that and you're likely to get say $20-$30,000 for that month. And then, but by pushing another $20,000 you're going to get what is that $400? So that takes you another two weeks of mucking around.

Phil Tarrant: Mm-hmm (affirmative).

Adam Rigby: Right, so you've got two weeks where you're earning $30,000 and you've got two weeks where you're earning a few hundred. Does that make sense? No.

Phil Tarrant: Yeah.

Adam Rigby: So it's counter-intuitive I know but actually when you work through all the details of it and you've lived it, and anyone's worked in commission only jobs, knows this to be true. But that's absolutely the case.

Phil Tarrant: Well, the thing is that you need lots of deals so the more deals you do if you can keep the price point reasonably high. But it still comes back to the argument that you're working in the vendor's best interests, so the person selling the property, if you're a property investor, you're the person selling it. So I guess put that in the context ... If you've got a commission only agent who keeps pushing, pushing, pushing saying I'll work in your best interests to lift your sales price and potentially get you another 10 or 20 grand, number one they might lose the deal because it means the property's in the market longer and that person might go somewhere else who's buying it, and number two, the longer your property's on the market, the less attractive it is to buyers because they feel as though it's overpriced or there's something else wrong with it.

Adam Rigby: There's something else wrong with it. That's right.

Phil Tarrant: So this is the matrix of many things working in unison, so there's not a definite answer to it, but I acknowledge what you're saying though. It's ... So two sides to every story. If you go and speak to the commission only guys, they'll tell you one thing.

Adam Rigby: And that's ... So there's different services for different parts of the market, right.

Phil Tarrant: Yeah.

Adam Rigby: So for instance, I would suggest to you that Upside works really well between certain price points, right. So between half a million and three million, we work really well, right. It's the right amount of service, it's the right outcome for the buyers. If you're going to sell a $10 or $20 million property, you need white glove service. Very, very bespoke approach, right. A very specific tailored approach to selling that property. Well, we're not set up to do that. And so ... And nor do we want to. So an agent who's on full commission, that's perfect for them, right. I know it's a niche market, right. But still, it's perfect for them and they need to do that.

Phil Tarrant: Yeah.

Adam Rigby: But for the bulk of where we sit, which is in that half a million to three million area, there's massive savings to be had and the outcome is actually better, in terms of they get better service, better visibility and arguably the same outcome in terms of the price.

Phil Tarrant: So if I was Phil Tarrant, property investor, selling one of my properties and I sat with one of your Upside agents and I'm seeing an Upside agent and I'm seeing agent A from X franchise group and agent B from large local family-run real estate agent B. What would be the two or three selling points that an Upside agent would say to me during that pitch for my business? What would those couple of things be?

Adam Rigby: Well. I mean obviously the price is a big thing.

Phil Tarrant: Yeah.

Adam Rigby: So you effectively as an ... If it's an investment property, we can get you another $20,000 yield on your transaction, right. That's a big thing. Secondly, you will have me working for you. I'm an experienced agent from your area. I've been in the market for 10 years. I'm going to look after you, make sure you get the best outcome. I'm managing the process, negotiating with the buyers, making sure the house is presented well.

            And lastly you'll have access to some technology that gives you full visibility of every step of the way, every buyer that goes through your open home, every contract that's been requested, every negotiation and offer that's been made. You'll see it online in your own very private portal that you can get access to at any time. And so that ... And then the next thing would be proof points. How can you prove that this is the case? Well then, just go to rate my agent, see all of our very, very happy customers, see our results. We had an auction in Melbourne, I think we got $160,000 above reserve. These things ... We're getting great results. And they're there to be seen. So, and that's the other thing, proof's in the pudding. It's all very easy for me to say whatever I like up here, but it really comes down to, are we getting results and are our vendors and buyers happy with what we're doing? And that's transparent.

Phil Tarrant: And you mentioned that your agents come from within the real estate sector, mainly on commission orientated roles. What's and ... I think you said the average experience is like 12 years. I can't remember exactly.

Adam Rigby: I know it was in Sydney but yeah, they're experienced.

Phil Tarrant: They're experienced, right. So why are they choosing to come and work for Upside versus company A, B or C?

Adam Rigby: Look, it's a number of reasons we're seeing, One, I think a lot of them felt that there's been something broken in the industry for a long time and it's been frustrating for them, so they see this is, yeah this is what has to change to make it a better outcome for everybody. Secondly, I think this, the odd cultural issue. You know agencies out there. So I think particularly for, I hate to say it, but particularly for women working in the industry, I think it tends to be more misogynistic than most. So we've had a lot of women who've been very frustrated in those environments and want to come to a much more, I guess, work-friendly, culture friendly environment.

            And secondly, we do tend to put a lot more investment in our staff, so we put on regular training sessions, we give them proper inductions, we give them proper tools of the trade, which is ... Some agencies will do that, but a lot don't. So a lot just say, "Look, there's your desk. Go for it". And that's like you say, what you kill, good luck you know. So a lot of people, some people can work very well in that environment, a lot of people don't. So we're very ... We have a full-time learning and development officer who's out there helping the agents do a better job at what they do and so we invest a lot in the team. So I think there's also, we've got much more opportunity for management and growth as well.

Phil Tarrant: Okay, interesting. I want to touch on ... Coming from Infochoice, you've probably got some experience understanding mortgages and that type of stuff. But before we get there, if I was going to break down how you sell a property. You have your ... The traditional way it's been done by a commission based agent who will deal in your best interests, and we've spoken a lot about that on the show. How to choose the right agent and Adam has mentioned some of the proof points why ... When one of his agents will be out there and sort of pitch for your business. But then you have a business like yours, which is a flat fee so it's irrespective of what you sell the property for, the agent receives the same fee or ...

Adam Rigby: No, we charge the same.

Phil Tarrant: You charge the same, you charge the same.

Adam Rigby: Yeah.

Phil Tarrant: And then you've got for sale by owner stuff as well. So people who want to try and do it themselves. So it's about empowerment. You don't need to pay for an agent at all.

Adam Rigby: Yes, yes.

Phil Tarrant: Do it yourself and then there's arguments against that as well around do you know how to negotiate yourself, are you going to be able to understand what the best price is, who's going to be representing your market. Which of your for sale by owner orientated platforms, which is tech-based.

Adam Rigby: Yeah, yeah. Look, and I think they have their place. I think for people who are okay to do that, that's great. Personally I wouldn't do it. It's a lot more work than people realise I think managing open homes and then there's a certain skill in negotiation. And I think the big, big difference is having a third party negotiate for you. So when you're talking to someone about their home that you might be trying to buy off them, the ability for you to say what you really think and feel is less likely. Like if you feel ... Much more obstacle in saying things that are going to affect the negotiation. Whereas if I'm talking to a third party, you tend to be a bit more honest, you might be critical. You know some people would be worried about offending someone. So there's a lot of dynamics where I think a third person helps a lot. But that being said, there's probably again a small percentage of the market who can do it very well. They do it, they get a good result and they're happy. They've saved a tonne of money. But it's not for everybody.

Phil Tarrant: Mm-hmm (affirmative). Clearly. Yeah, anyway we'll touch on that another time but I thought we answered that well. So, Infochoice if you haven't checked it out, I think it lives inside another engine now. But you guys were pretty early days around comparisons, mortgage comparisons. You must have had your head immersed into loans and stuff, as CEO of that. What's your view of just securing financing now for property investors? A lot harder than it was back in the day, or it's always been difficult?

Adam Rigby: Look, I think it's always been a pain in the butt, let's be honest. And I think it goes in cycles. Like all the financial institutions have different internal focus and needs at different times, right. So there's a phase where they'll be more focused on securing deposits and being tighter on credit and then there's others when they're trying to grow their book, right. So you know unfortunately the consumer or the borrower is a victim to whatever the hell is going on in the market.

            The ... My view is that I think you start with understanding what your needs are. Don't start with a rate. A rate is the distraction, right. So I think it's all about understanding how much optionality you need. So some investors if you're quite active, if you've got an interesting financial life where you might be a sub-contractor, or in business for yourself, or you might have a lot of investment going on. So your income is quite varied and your financial liquidity can be varied and all those sort of things. So really the logical thing to do is to say how much optionality do I need and how much risk am I prepared to take? And so my personal view is start there and then work out all the features you need. You know, fixed, variable, draw down, offset, all those sorts of things. And then negotiate like hell with someone who can give you the features you want. Because it's always the horror stories about the break clauses you hear. You know someone's gone super, super cheap and then they didn't really look into it clearly, and they actually get completely screwed over because they have to refinance or do something and they're up for thousands and thousands in fees. And that's not something you want to get caught doing and that happens all too often.

Phil Tarrant: It does happen too often. So read the fine print. Just with Upside, do you ... How would you explain it? Is it a digital real estate agency or is it a real estate agency who has digital as part of its core, or how would you ... Because I want to have a chat about prop tech but I'm quite interested on your ... horse and cart, cart and horse.

Adam Rigby: Yeah, yeah. So digital only implies that it's all online and you don't really have a person involved.

Phil Tarrant: Mm-hmm (affirmative). Yeah.

Adam Rigby: We kind of avoid that, so it's sort of ... We call ourselves prop tech, we do, because it's all about the property space being I guess enhanced by technology, which is what we are. But we are an agency. We're a real estate agency, fully licenced, got agents running around working for us, and we use technology to make the whole experience better.

Phil Tarrant: Mm-hmm (affirmative).

Adam Rigby: So again, Uber's a good example, right. So you still have a car pick you up, right. Like you're not running on the back of your phone app, right. So but ...

Phil Tarrant: And there's still someone driving you.

Adam Rigby: There's still someone driving and you're still paying. So the service is the same, but the technology makes it a lot nicer and easier and quicker and all the rest of it. So that's kind of a reasonable analogy.

Phil Tarrant: I spent some time and I spoke about it on the show and I'm sure a lot of our listeners would remember, back in October or November of last year. I was over in California, Silicon Valley, talking to property and mortgage tech type people and just really getting an understanding of where the market is out there at the moment. They're pretty advanced and sophisticated and obviously within Silicon Valley, there's a whole lot bunch of really bright young people who are trying to change the world. Some of them will get it right and get a unicorn. Most people don't. But what you'd just described there was very much the findings that I surmised from my time out there and that. And I sat down with your sales forces and your big brands who know about this. And big guys, the property and mortgage players like Yodlee and all this sort of stuff.

            And what they said to me was that technology's not going to replace the human, technology's going to augment what the human does better. And particularly looking at buying real estate and your generation Y's, millennials, and the next generations coming through. They said, them even more so than our generation, we're probably of similar age. They want to speak to someone, even though they're the most technologically sophisticated and advanced people who are never a millimetre away from their smartphone. They still want to talk to someone to actually get a transaction done, which is as big as a house. So they're saying technology will augment it or just empower the professional or the advisor, let's call it what it is, real estate agent's an advisor. To do their job better and a lot of the stuff that they used to do, which was very manual and not necessary, technology will just replace it. So, that's pretty much what you're doing. You're using tech to get the easy things right.

Adam Rigby: Yeah.

Phil Tarrant: The hard things being visibility, right, and empowering the advisor to do the job better than what they have done beforehand. And it's cheaper.

Adam Rigby: Yeah. And that's talking to an efficiency, right. So we can help our agents be more productive and we can make sure that the service levels increase. And by doing that you become more productive and therefore you can offer a better price. And that ... Look it's very simplistic but that's what's behind it all.

Phil Tarrant: Mm-hmm (affirmative)

Adam Rigby: And look, the nice thing for me is when you see the end result. So I've been a tech entrepreneur for 30 odd years, and as fun as it is to build these things and to create technology and to have a great culture in all those organisations, at the end of the day, it's hearing the stories about how you impacted a customer's life, or in this case an investor or a vendor who sold their property, who's super happy with how it went. He couldn't be happier with the process and the service levels and they got the great price they wanted. That means that everything you did upfront was working, right. And that's what we're seeing now, so it's a very rewarding time to be running the business. Because we're still relatively new, so we're just starting to see all these great case studies coming out now, so it's very, very satisfying.

Phil Tarrant: Mm-hmm (affirmative). And you think prop tech, property technology will keep marching down this path? You reckon it's got a big bright future.

Adam Rigby: Look, I think it's going to be ... It's interesting. You've got a whole bunch of things happening simultaneously, which probably means we don't know where it's going to end. So what I mean by that is you've got fin tech happening over in one side. You've got prop tech happening, which is doing a lot of what we've just talked about and making the process better. You've got media players who, like Real Estate Domain who are kind of hit their limit in terms of revenue, so they're going crazy trying to work out how to extend themselves into much broader spaces. And then you've got things like cryptocurrency and Blockchain where how they're going to change the whole transaction process at a very fundamental level. So there's so much of these moving parts that at some point there's going to be some connections between them all, and probably no-one, you know no-one really knows how that's all going to unfold.

            But one thing for sure, it'll be hopefully simpler and easier and you get better service and that's I guess the goal. And sometimes it works quickly and sometimes it sneaks up on you. Industries have changed overnight when people have been denying they'll change at all for years and the next thing you know, bam, within a year or two it's all changed. And property's been a bit like that I think. I think there's been people saying there's no way that the flat pricing will take hold. Well, they haven't really looked in too many places around the world to see that it is taking hold.

Phil Tarrant: Mm-hmm (affirmative)

Adam Rigby: So, and they are getting results. So you don't have to look too far to see that. Just not necessarily in your suburb. Maybe you have to look overseas.

Phil Tarrant: Yeah. To Adam's point, I think it's all about the outcome.

Adam Rigby: Yes.

Phil Tarrant: Irrespective of how you go about doing this i.e., selling your property, your investment property. You want to make sure that the person in your corner is doing the absolute best they can. And some people are going to be more open to flat fee model, tech-enhanced models.

Adam Rigby: Mm-hmm (affirmative)

Phil Tarrant: And just on that basis, what sort of customers are you seeing? Is there a particular type of customer?

Adam Rigby: Yeah, it's good that you asked that because I had an assumption upfront that we'd get other millennials or what I call tech natives, right. So I'm a tech native even though I'm a thousand years older than a millennial. But that's not been the case. So we've had I think, the price point attracts all sorts and then you know then it's up to our agents to connect with the vendors and make sure they feel comfortable. And so what that has meant is that we've had everyone from quite technical sophisticates who are overseas selling remotely, through to 70 year old couples selling their property. And actually not even having a computer. So it's a mix right, and a surprising mix to be honest.

Phil Tarrant: Yeah. That's interesting. Have you got a target on your back? Are the naysayers and the anti-flat fee guys sort of giving you and your ... Is there a cohort of people ...

Adam Rigby: Yeah.

Phil Tarrant: ... Who are doing this sort of flat fee or a different pricing model? Have you got much flack from them or is it ...

Adam Rigby: Look, we do but it's pretty harmless to be honest. I mean we think you get a lot of agents trying to naysay on our digital advertising when they can comment. But I think to be honest, we're probably the less of the enemy because we're at least based ... We don't take a full fee until we get a result for the vendor, right.

Phil Tarrant: So how does that work? So I engage you, pay a bit of it.

Adam Rigby: Yeah.

Phil Tarrant: And I pay the rest when ...

Adam Rigby: Then you pay the rest when we sell the property, on settlement. So we are very much aligned from a financial and a fee perspective to you selling your property, which is the whole point of engaging with the real estate agent. Yeah, there are some other models that fundamentally take their fee upfront regardless of whether they sell the property. And I think ... I don't think too many people think that's really best for the vendor, right. Because it doesn't necessarily create the right behaviour from anybody in the process. So I think the ones doing that have probably got a bigger target on their back to be honest. Because at least people kind of can see okay, well they've got a different pricing model and it may well annoy the hell out of us that they're cheaper, but at least they're aligned to the same sort of outcomes.

Phil Tarrant: So if people want to know more about you guys what do they do?

Adam Rigby: Just jump on our website upside.com.au.

Phil Tarrant: That’s a good URL

Adam Rigby: Yes it's a good URL.

Phil Tarrant: Was that there available or…

Adam Rigby: No, no, we had to negotiate it and ended up purchasing it, yeah. It's pretty the way these days, yeah. You can't get a decent URL. It's impossible.

Phil Tarrant: Good, good URL. Cool. Adam, enjoyed the chat. I think that was reasonably balanced. I think we covered off the ... There's commission versus fixed, and the message if you're tuning is go and do your research and check these guys out. Adam gave you the URL upside.com.au. But I guess you're fortunate, Adam, because you're saying that the right customer you've used between sort of $500,000 and $3 million, which covers off most investors.

Adam Rigby: It's a pretty solid part of the market, to be fair.

Phil Tarrant: That's alright for a business case, but ... Keep in touch ... I'm quite keen to see how this goes. I get it, I understand how technology now should be an enabler and empowerer I think for people. As a seller of real estate, you need as much visibility as possible to understand it, and if you can get that at the press of a button, that's great, but it still comes down to the human element. You've got to like your real estate agent as well. If you don't get on, it's probably not going to work, right.

Adam Rigby: Exactly right, and I guess that's the thing that we've been working hard to do is hire (1) agents who're experienced, know how to get a result, but (2) quite authentic. Because I think it's more important to actually be authentic these days than being, well I hate to say it, slick, right. So part of getting a great result is actually servicing your buyer as well, and connecting well with the potential buyers as well as the vendors, and I think the authenticity and the genuine connection you have with another person ... If you're in sales, it's way more powerful than being a little bit polished and slick and pumped out of the same little factory.

Phil Tarrant: Yeah, and I'm going to continue for another couple of minutes, is that alright, Sam. Yeah, I'm getting the nod from the producer here, to go on a bit longer. But it just made me think, we're talking about prop tech, right. We're talking about selling stuff. And we've been talking about the agent and the service it provides the vendor, the person selling the property. But the other big part of this is how well you can effectively market a property to attract as many potential buyers as possible. And this used to be done with adverts in the paper and then paid advertising. There's a lot of good agents that still leverage print and the power of print. We've spoken about it beforehand. For properties, it's a great way to market it. It might depend on the price point, but it should be part of a mix. You've got domain and realestate.com, online platforms, Stellar Real Estate. They're very cluttered now to actually navigate, they're very smart and sophisticated no doubt, but there's a lot of stuff in there that you've got to weed through.

Adam Rigby: Mm-hmm (affirmative)

Phil Tarrant: How do you think, talking about property, how do you think the marketing of real estate to attract buyers will change in the future? Have you got any sort of views on that? You reckon it's going to be just finesse from where it is right now, or it's going to be completely transformed?

Adam Rigby: Yeah, look I think it's going to be how well the two big players evolve from here, and if there's a left field entrant. So I think it'll be hard to unseat them based on where they are and the control they have in the space.

Phil Tarrant: Yeah.

Adam Rigby: I'm aware there's been several efforts by the industry to try and wrestle back control over the years and it's never worked out.

Phil Tarrant: Never worked out.

Adam Rigby: So, but I do think there is a possibility for them to be blindsided and it's probably what keeps their board up at night about what could come into play and who might be at that table. But my personal view is I do think that it's unlikely to change dramatically. I think it will evolve in the way they present products and how deeply they get into the transactional side of it will change. I think they're busily trying to diversify now, as you've seen them get into loans and home maintenance and various other things.

Phil Tarrant: All that sort of stuff.

Adam Rigby: So that's the way they can increase their revenue right now. But we'll see because I think what's happened in the past is they ... Historically the only way they've increased their bottom line is by upping the prices to everyone, and then ...

Phil Tarrant: It pisses agents off

Adam Rigby: Yeah, there's a point where that has created problems in the past where there's been absolute rebellion and then they've had to come back. So I think there's a fine line that they can walk and they've got to be careful because otherwise it will open the door. I mean at one point, it's not an equivalency, but it is interesting. At one point, Facebook didn't exist and it was, our old mate. I've forgotten the name now even, how have I forgotten the name.

Phil Tarrant: MySpace.

Adam Rigby: MySpace, exactly right. So MySpace was the world dominant social network and no-one thought that was going anywhere, and then all of a sudden Facebook came along. And so it's a little different in this space, but things can happen like that, and you never know. Like there's some pretty powerful players in adjacencies, such as the banks, and such as other major publishers who ... Or realty groups or even global players like ... I remember I did a stint at CBA, which was pretty fascinating, and they took very seriously the potential threat of people like Apple as a financial institution.

Phil Tarrant: Mm-hmm (affirmative)

Adam Rigby: And you know you go back 20 years, would you honestly think that the major banks would consider a technology company or a computer company, a threat? And so these things can happen.

Phil Tarrant: Well, it's where the power lies now because there's not ... The tech is important and the way you do it is important, but it's about having influence and the distribution and ability to influence what people think is where the power is. And that’s the reason why Apple’s who connect with how many umpteen hundreds of millions of people across the world.

Adam Rigby: Mm-hmm (affirmative). But just on that, Amazon are trialling a real estate referral programme.

Phil Tarrant: Yeah, there you go.

Adam Rigby: Right, so and they are the biggest retailer in the US and globally and I think at some point if they looked to Australia, that's going to be interesting.

Phil Tarrant: Well, they've got the connectivity. They know the people and how to reach them. They've got a relationship with them, they know everything about them.

Adam Rigby: And very deep pockets.

Phil Tarrant: Very deep pockets. So watch this space ... What you're saying though based on Upside and irrespective of whether you get a fixed fee or a varied commission rate, agents are here to stay though, aren't they?

Adam Rigby: I believe so. Certainly for the next 10 to 20 years, unless something dramatically changes. I can't see the do-it-yourself model ... It'll grow slowly but it people ... You know it's a transaction that doesn't happen very often. And because of that, you're not familiar with it and you need help and it's a scary, very, very large transaction. So the ... It sort of feels like you're always going to want someone to help, hold your hand.

Phil Tarrant: And I agree with that, but I see it a lot more practical because you know as a property investor and I have a reasonably large portfolio, I'm not going to do it myself.

Adam Rigby: Well, that's the other side of it, right. So ...

Phil Tarrant: I haven't got the time or inclination, the energy, the expertise, so I'll pay someone to do it.

Adam Rigby: Yeah, exactly right.

Phil Tarrant: Like I do, we talk about it all the time on the Smart Property Investment Show. Surround yourself with an A team of the people who can do the stuff that needs to be done a lot better than you can. I'm not a real estate agent. I certainly don't want to sell a property. I don't want to stand there doing open home.

Adam Rigby: No, exactly.

Phil Tarrant: Someone else can do that for me. Who's better at it and enjoys doing it. But anyway, I'm going to finish on that note. It's got us to a nice point. Adam, I enjoyed the chat, mate.

Adam Rigby: Yeah, thanks very much.

Phil Tarrant: Thanks for coming in. So go and check it out, Adam Rigby from Upside Realty upside.com.au. I had a quick look today and I'm going to go back and have another look with a different mindset on, so we'll get you back in at some point soon?

Adam Rigby: Mm-hmm (affirmative).

Phil Tarrant: Remember to check out smartpropertyinvestment.com.au. If you're not subscribing yet to our daily morning market intelligence like tens of thousands of other Australians, the first to hear what's going on in property and property investment, smartpropertyinvestment.com.au/subscribe. If you like getting your info from social media, you are very welcome. We have Smart Property HQ across all the different social channels, and like us, follow us and tune in to what we're up to. And please remember to keep those reviews coming in on iTunes. We do love them and as I've said many times beforehand, it's just me here who is talking behind a microphone. There's a big team who curate all of our guests and create what we do here. So a big shout out to them. But if you like what we're doing, leave a comment, leave some five stars and they'd be very appreciative of it all. We'll be back again next time. Until then, bye bye.


Check this box to receive podcast updates

From the web

Website Notifications
