Rise of real estate comparison sites is a power shift to consumers

If your mate down the road asked for advice selling his house, what would you do? Chances are you’d give advice based on your own story or something you’d heard around the traps.

Real estate agents speak of this type of advice with trepidation; it often leads to misinformed homeowners with unrealistic expectations.

But if that mate asked about say health insurance, plane tickets or even a phone plan, in Australia it’s likely your advice would be based on knowledge you’ve gleaned from comparison sites.

Almost before most of us had heard of the term “Google”, online comparison sites were emerging in Australia.

How Aussies embrace online comparison

Australian research found that more than 70% of internet users had used a comparison service. In Australia in 2012 health insurance comparator iSelect is reported to have sold 20% of all health insurance policies.

 A recent study by Nielsen recorded the top reasons why Australians like to use comparison sites:

Value: It turns out that Australians first and foremost are interested in getting a good deal, with 79% of comparison site users listing price as the top priority when comparing online. Price indicates consumers are looking for better value – less cost for higher quality.

Ease-of-use: A total of 68% of people use online comparison because it’s easy, and convenient. These consumers are accustomed to quickly comparing insurance, flights or real estate agents from the comfort of their living room.

Information: According to the survey, 66% of Australian comparison users like to be informed purchasers. Comparison sites are valuable because they often break down complex information in a way consumers can easily understand.  

Smaller businesses tend to like comparison too. Comparison sites can enable SMEs to act as challenger brands and compete against bigger brand names online.

The trailblazer

Early pioneers of the comparison movement, iSelect launched in 2000 as one of the first Australian comparator sites for private health insurance.

Led by ex-chief executive officer Matt McCann and former marketing director, Roger McBride, now part of LocalAgentFinder, iSelect fundamentally changed the way insurance works and encouraged insurance companies to become more consumer-facing, aware that there would be an independent party that would hold them accountable against other operators in the industry.

Before these sites emerged the insurance industry was confusing, difficult for consumers to navigate, and information on policies was scarce without calling a company or talking directly to a salesman.

Years later and online comparison is an almost unconscious step for many consumers when purchasing insurance. It is this mentality that is empowering Australians by giving them more information than ever before about services that were previously locked behind opaque contracts.

Put plainly, this is the position many, like your mate down the street, find themselves when it comes to selling their home.

Shining light into an opaque industry

Real estate has conventionally been an industry where many of the rules and regulations are unclear and opaque to many buyers, sellers and renters. It’s part of the reason real estate agents remain one of the least trusted professions.

It is this search for transparency and guidance that is driving a rise in comparison sites for real estate agents.

As online comparison becomes a crucial step in real estate agent selection, agents and agencies are set to become more consumer-facing.

For consumers this means they will have access to a spectrum of real estate agent information and customer reviews to help them make well-informed decisions. Comparison makes the agent selection process more transparent, and transparency in business transactions breeds trust – something the real estate industry is currently lacking.

Online comparison will have even larger ramifications for businesses that operate in the real estate sector. Smaller real estate agencies will emerge as challenger brands to larger agencies. Comparison sites will become a vital marketing platform for independent agencies, facilitating competition with larger agencies.

So back to your mate selling the house down the street; advances in real estate tech are unlikely to change the fact that they will need a real estate agent to sell their home.

But it is giving the consumer more power than they have ever had before, and putting trust back into the process of selling a home.

Michael Banks is the CEO at LocalAgentFinder, Australia and UK’s market-leading real estate agent comparison service. With over a decade’s experience in property-tech and a background in strategic partnership management, Michael specialises in building digital solutions that simplify and strengthen customer engagement in real estate.