Earlier this week FNB announced that its clients can now sell their properties to each other via its banking app.
Prospective sellers can list their properties on the app, talk to buyers, arrange to view a listed property and negotiate the price via the chat function on the banking app. You can include an estate agent - or do the whole transaction without one, and save on commission.
This has triggered an angry response from estate agents on social media:
Fnb announced internal property sales cutting out estate agents. Call out to estate agents holding fnb accounts close your accounts with them. If they cutting us out. Let's cut them out. Estate agents pls re tweet— Fatima saley (@Saley786) November 2, 2018
#compcomsa #fnb is the new Fnb app which can facilitate the sale of house between customers not anti competitive. Is it not a form of vertical integration. Future result killing job opportunities in the real estate market. How could that be good for SA. Can u investigate?— Canyoubelieve (@buhlebana) October 31, 2018
FNB is posing a threat to estate agents, says Gordon Smart, owner of Smart Properties in Port Elizabeth. He told Business Insider South Africa that the bank will now directly compete with estate agents."They are biting the hand that feeds them. (It's) disappointing that they decided to go this route. (FNB's announcement) is for us a wake up call, maybe we need to restructure our business."
Mike Hendrikse, CEO of the property inspection group HouseCheck (which inspects houses on behalf of prospective home buyers), says FNB's announcement has upset estate agents as many were caught off-guard.
"The truth is that the real estate industry has been under siege for a while," he says. "Attorneys selling houses for 3% and online portals have hurt their businesses."
The major drawback for consumers is that the platform is limited to clients of FNB, which holds about a quarter of the South African mortgage market, says Yael Geffen, CEO of Lew Geffen Sotheby’s International Realty.
In reference to the fact that FNB buyers can get a standard Offer to Purchase document from the app, Geffen says there are "horrendous pitfalls" to selling or buying a home with a DIY offer to purchase, "not least of all legal complications that often see parties tied up in litigation for years".
"FNB’s move is more perplexing than threatening to the real estate industry," she believes.
“There are mountains of MBA textbooks that delve at length into the pitfalls of any business – no matter how big or small – trying to be everything to everybody.
“Our family has been in real estate for three generations and I’ve heard from nearly a century of industry wisdom that you get what you pay for.
Geffen doesn't believe her business will be affected by FNB’s app. “At the end of the day our clients understand that they’re paying for expertise that you simply won’t find with low commission or fixed fee agencies, nor inside an app on your smartphone for that matter - regardless of the bells and whistles it may offer.”
For its part, FNB said that the app presents a business opportunity to estate agents.
"There are currently over 3 million customers on the app which could present itself as a great opportunity for agents who have properties listed on the app," Marius Marais, FNB's mortgage cluster head.
"Customers who list privately can, however, change their minds and request the services of estate agents on the app at any given time.
"We are committed to working together with these industry players to meet the needs of customers in the buying and selling process," he added.
Also from Business Insider South Africa