Property firm Zoopla's (LSE: ZPLA.L) £1 billion flotation is the talk of the real estate industry. One of the questions being raised is if property portals like Zoopla will effectively replace the traditional real estate agent, which could leave the property market dominated by a relatively small number of realty firms.
The Zoopla Property Group, which runs web sites Prime Location, Smart New Homes and Homes Overseas, announced in May its plan to sell shares on the London Stock Exchange.
With an average of 40 million users monthly, Zoopla is UK's second largest property Web site next to Rightmove. It advertises 90 per cent of residential property listings. From October 2013 to March 2014, Zoopla had revenues of £38.3 million, up 26 per cent compared to a year ago.
"I am very proud of what the team has achieved to date and we are incredibly excited about the opportunities ahead to continue to grow our brands and business," BBC quoted Zoopla Chief Executive Alex Chesterman.
In June, Zoopla announced its shares would be priced between 200p and 250p, implying a market valuation between £835 million and £1.04 billion. At that price, the Daily Mail newspaper, which owns almost 53 per cent of Zoopla, stands to reap a £500 million windfall. The daily is selling its stake in the property site.
Property Forum pointed out that Zoopla is not the only real estate firm to maximise its exposure using the Internet. "It is something which many companies have used to their advantage to give them significant market share and potentially enormous profits," noted the web site.
It added that while Zoopla "is better than most property related companies at using the online arena," for the moment, it finds no reason why real estate agents can't be as good at the game.
One way that the playing field could be leveled is through the use of a proprietary video processing technology from RealBiz Media Group, Inc. (OTC:RBIZ) that provides home video tours to the real estate industry.
RealBiz provides video tours via its wholly owned HomeTourNetwork operation. Here, the company provides a television video-on-demand network, a growing MicroVideo App network and an existing Virtual Tour network.
Once the digital video network is completed, RealBiz will offer access to the biggest real estate companies in the US, featuring numerous approved vendors and national contracts with a client base of more than 60,000 real estate agents and brokers and target distribution to over 70 million households.
Bill Kerby, chairman and CEO of RealBiz, said in a video message that the platform, which helps technology-starved agents, could reach more buyers for as low as $10 a month.
He explained that it is "a platform that allows the agent to go out and customize and create home solutions, home events, what's happening in their neighborhoods, home listings that they can target to individual, to consumers, through emails, to social media platforms like Facebook."
Kerby added, "What they can then do is follow-up with the leads that they have sent out and determine who is an interested follower and who is not, thus generating business back to them."
The videos compliment one of the key steps in purchasing or leasing a property, which is viewing it. While neither the glossiest sales brochure nor the glowing review of a listed property could substitute for a personal visit to a detached house-and-lot, condo unit or office space to convince the buyer that the purchase is worth his money, in some cases, trips to project sites or finished units are not possible or can be too difficult and costly.
These include situations where the property on sale or the potential buyer are too far apart and the buyer would need to take a plane or even secure a visa to see the place.
While a personal tour would ultimately be needed before a buyer pays for a property, during the house shopping stage, the video technology that a growing number of real estate companies have adapted to has proven useful in cutting the immediate need to physically view the prospective property.
In the end, Property Forum pointed out that while companies like Zoopla may have changed the public face of the UK real estate market, real estate agents - aided by the latest technology - would always be required by a significant number of buyers and sellers to talk through ideas, concerns and discuss questions about the planned property transaction.