The team behind Perth-developed property app Openn Negotiation says it wants to bring transparency back to the residential sales game.
The team behind Perth-developed property app Openn Negotiation says it wants to bring transparency back to the residential sales game.
Launched five months ago by a group of local real estate agents, Openn Negotiation is a new online bidding platform that allows buyers and sellers to view offers for a home in real time.
The technology’s co-developer and Mint Real Estate director, Peter Clements, said 74 properties valued at $99 million had been sold through the app across Perth, with activity hotspots including Claremont, Subiaco, Como, Mandurah and Bibra Lake.
“Openn Negotiation is a combination of all the best parts of the two traditional (selling) methods – private treaty and auction,” Mr Clements told Business News.
“Auctions are a more than 5,000-year-old process that hasn’t really changed, but the private treaty process over the past decade has changed a lot.
“It used to be people put up a house with a price and it was a simple negotiation; but now if a house is listed for sale it says ‘expressions of interest’, or ‘offers above’, and there are so many that just have no price.
“Buyers have become frustrated; they have no idea what they need to pay because of lack of transparency. They would miss out on houses by a few thousand dollars as the agent wouldn’t be able to tell them what they needed to beat.
“Buyers would also assume agents were just driving up the price.”
Mr Clements said bringing transparency back to the real estate process was the fundamental driver for the creation of Openn Negotiation, which initially trialled as a paper-based process, undergoing 18 months of testing before getting to the app stage.
The online tool costs the vendor a one-off upload fee of $440, bundled into the seller’s marketing package, which generally covers the cost of sales material (including brochures and signboards).
At the start of the campaign, the seller and agent set the date of the Openn Negotiation and all interested buyers are invited to submit their terms and conditions. Once those are agreed upon, buyers can compete on the app to purchase the property.
During the campaign, all parties can see the number and value of bids up until the nominated sale date, which then starts a timed process imitating a public auction.
Mr Clements said the average time houses were on the market under the Openn Negotiation system was 23 days, as opposed to the current private treaty average of 69 days.
“People openly compete using the app in privacy without the pressure of a live auction, and if anyone makes a dummy bid … because they’ve already signed a terms and conditions contract, they are committing fraud,” he said.
“In real estate, most people always feel like it’s a win-lose, but this is a win win win; the agent is able to sell quicker, when a buyer misses out on the property they know it was their choice to miss out, and it helps sellers become more realistic with the market.
“And because there’s a clear bidding timeline on the app, it gives a depth to the interest in the market for (property) valuers.”
Mr Clements said more than 200 agents had been trained on Openn Negotiation, but only a handful had actually started to use it, with Acton and Able McGrath Property just two of the several agencies that had made sales through the app.
“There have been a lot of non-real estate agents trying to deliver apps to get rid of real estate agents and that’s where they’re falling short,” he said.
“It’s like trying to make a sandwich without a filling – you need to have all the parts.
“This is an enabler for agents.
“And within the next four to five years, I really think this will be the preferred method.”
A funding drive is under way to fuel the app’s expansion plans into Queensland, NSW, Victoria and New Zealand, which Mr Clements anticipates to enter by the end of 2018.
Discussions were also being held with investors in Singapore, with plans for the US also on the horizon.
