October 1 2024 17:00
A small team of ambitious but seasoned entrepreneurs and developers has launched Hoom, a web app and Proptech platform, which connects people who want to sell their properties efficiently, and at the highest reasonable price, with the help the best estate agents across the country.
In a marketplace which is extremely fragmented, Hoom has been carefully designed to do the leg work for you when you are trying to complete a transaction.
A prospective seller will list a property on Hoom. The app will then match the seller with up to five estate agents complete with commission rates and a service offering for that specific property, within twenty-four hours.
As a web-based app, Hoom does not require installation but is run through a computer or mobile browser. It is as dynamic entrant into South Africa’s proptech real estate landscape. Since its launch in September, the app has been very well-received, saving sellers and agents time and driving more efficient sales. The team at Hoom reached out to boutique and tech savvy agencies first, as these are generally early adopters of new technologies.
The residential property market is highly competitive. There are more than 50 000 estate agents who are trying to help to sell a limited number of homes which come up for sale each year. It’s difficult for new agents and small agencies to compete in this arena. As a young estate agent, you may spend your time trying to corner one or two suburbs but end up wasting hours upon hours trying to wrestle a handful of properties away from an agent who has sold homes there for 25 years.
This is why Erhard Wolfaardt and his team created Hoom. “Hoom helps estate agents to stay ahead of the game by enhancing their online visibility and connecting them with sellers. There are so many listings websites out there already and it’s difficult to justify to an agent that they should join yet another site. Hoom was built to deal with pressing concerns which property practitioners have in the industry,” he says.
Erhard Wolfaardt
Hoom captures the attention of property sellers online and then connects them with estate agents based on key factors including agent preferences, location, and property type. A more efficient matchmaking process is more likely to lead to a successful sale where both the seller and the agent score.
“Recognising that every property is unique, we empower agents to showcase their services and propose a commission structure tailored to your specific listing,” says Wolfaardt.
“We firmly believe in the invaluable role agents play in successfully selling a property. Our platform avoids a ‘race to the bottom’ on pricing, allowing agents to set competitive commission rates between 4.5% and 7.5%. We believe this range reflects the value and expertise each agent brings to the table, ensuring sellers receive top-tier service,” he says.
Early signs have been inspiring.
“The early adoption has provided invaluable feedback, allowing us to iterate on our product and refine its features. We’re also currently implementing a WhatsApp contact feature between Hoom, agents, and sellers, streamlining interactions and enabling speedy responses,” says Wolfaardt.
“The current version is a strong foundation, clearly aligned with our vision for Hoom. A special thanks to our early adopter agencies. Your partnership has been instrumental in our progress. We’re excited to continue building the future of real estate together,” he says.
Wolfaardt works closely with Brian Sango, Hoom’s Chief Growth Officer. The two bring extensive app and real estate experience to the table.
“Over a decade as a business owner in the building industry and a property investor has given me a unique perspective on the challenges faced by sellers, agents, and newcomers to the real estate world. Brian brings his extensive experience in real estate, deep industry knowledge, and valuable partnerships to the table. Hoom was created as a direct response to these pain points,” says Wolfaardt.
Hoom launched at an opportune time as SA’s Monetary Policy Committee (MPC) began what is assumed to be an interest rate cutting cycle when it cut the repo rate by 25 basis points in late September. The repo rate is the interest rate at which banks lend to one another. It affects the rates at which individuals and businesses can borrow money. Lower interest rates incentivise people to buy houses as the finance costs on these assets fall. The MPC is expected to cut rates over the next few months.
Hoom is enticing homebuyers and agents. This well-received service is versatile. It elevates young agents and small agencies so that they can compete at a higher level than they could if they merely grew their businesses organically. Numerous South Africans are also choosing to buy residential property not for living in but as an investment which they rent out. South Africa is facing a severe shortage of decent housing. There is demand not only for affordable housing but also luxury homes in certain cities and numerous variations of residential property in between.
The investment case for residential property in South Africa is gaining in strength daily, as hundreds of thousands of people move to the country’s economic centres including Johannesburg, Durban and Cape Town each year.
The initial focus of promoting Hoom was to attract agents through various marketing channels. The app could then build a strong database of agents to match with sellers.
“Being a two-sided marketplace, we have up to now been focused on onboarding agents onto our platform for us to service our user; the seller. We have gained some great momentum over the past few weeks, first launching the platform to a few beta users. We are also busy with our marketing campaign targeted at sellers, as well as collaborations with various industry players where we will be able to create another seller funnel to serve the agents on our platform by matching them with serious sellers,” says Wolfaardt.
Hoom is highly accessible to potential sellers and there is no sign-up or listing fee. “Our platform is ad-free, and we don’t allow agents or agencies to pay for matches with sellers. This levels the playing field, allowing agents without large advertising budgets to be discovered by sellers who might otherwise never have found them,” says Sango.
The operates on a purely success-based revenue model. “We only earn when we successfully connect a seller with an agent who ultimately sells their property. Our revenue comes from a referral fee, which is only payable upon the successful transfer of the property. Hoom is a fantastic platform for both new and seasoned agents, and a vehicle driving transformation in the real estate industry,” says Wolfaardt.
Hoom does not on-sell data about the agents who use its platform. Privacy is paramount at Hoom, and this extends to all users, including agents.
“We leverage intelligent matching to connect sellers with agents who align with their property and preferences. Should you find the initial matches unsuitable, you can request alternatives, and we’ll personally delve into your specific requirements. Understanding the diverse needs of our users is fundamental to Hoom’s success, particularly in this early phase as we constantly strive to achieve a product-market fit,” says Sango.
Hoom was recently nominated as a finalist in the Africa Property Investment (API) Summit’s 2024 African Startup Competition. It was also a finalist in the Most Innovative Real Estate Company at the API awards. API was held in Cape Town on the 19th and 20th of September 2024 at the Westin Hotel.
Erhard Wolfaardt and Brian Sango at the API Summit in Cape Town
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alistair@propertyflash.co.za
