Sunday, October 12, 2008

Being Badgered Whilst Just Looking?

During the past 12 months we have seen some significant changes going on in the overseas property business, most notably of course the global stock market dives and changes in lending, but the high flying sales business that is investment property has gradually started to alter the way it works.

Many new web based companies or "portals" have popped up in the past few years, Properazzi, Lead Galaxy, Property Index and the like to name a few. Not companies you may remember as the public, because they don't sell properties (yet) themselves. All they do is aggregate everybody elses listings, (by fair means and sometimes foul by the less reputable) and then when you the public make an enquiry, your details are forwarded to the listing company.

In years gone by, this invariably worked on a commission based model, if "portal A" acquired a lead, it was passed across to the listing company, then if the listing company made a sale, the portal was paid a commission. Sounds fair by all accounts.

The inherent problems with this in a struggling market are that when said listing company or agent makes a sale, if they are short on cash, the last people to get paid are the portals. As a result, the commission based model is rarely seen anymore. The portals are using new ways to make money from their techno wizardry on the internet.

The larger portals that have good presence and rank well in Google and Yahoo and so on have been fortunate to be able to sell advertising space on their sites, meaning that there is the appearance factor for advertisers, and natural traffic generation too. This however is rarely cheap, unlike many of the international investment property companies out there!

Of late though, we are starting to see other lead generation systems emerge, namely and others based on similar models. The basics of Leads and Agents is a qualifying service with all leads having been telephoned and asked questions about their intention to buy.

How does it all work? Well according to the site they are "absolutely unique" in the way they generate leads. It doesn't however say quite how it achieves that, and we'll come back to this part in a moment.

It goes on to very clearly state how the prices start from just £5 per lead and you can bid for up to 72 hours and that it is a good idea to bid over the odds even if you are the top bidder at the time to stop sniper bids and so on.

So how does this affect you? Well there are a few things to take into consideration here. The fact that they don't really explain at all where the leads come from in the first place is one. Fair enough, if they are a survey company, great, bring it on, we can all understand that. The thing is that the site doesn't state that is what they are. this then begs the question of where do they get their leads from?

It states on their site they have a number of marketing campaigns on websites.

Just think about that for a moment. They are advertising on the sites that the agents are already advertising on, calling the leads and then selling them for a fiver?! Believe me, quality advertising space on high profile websites that have sufficient traffic to generate quality leads to the level that is needed would not financially allow you to sell names for £5 a go, or anywhere near.

What about all the general enquiries out there from people that are "just looking" at property. Where you have to leave your name, number and e-mail address to see any detail? I must admit the quality sites out there usually have bullet proof disclaimers and small print to comply with the data protection act, but there are many less scrupulous that will just sell names and numbers on willy nilly for tuppence ago.

The other thing to consider here, whilst they will call you once you sign up as a bidding agent, there is no regulation in place to ensure you are an actual property agent either. You could be an arms dealer, a 419 scammer, or even an unruly investment property agent that just takes deposits and doesn't supply the property.

Just think about it next time you are called about an investment property.........................

1 comment:

Anonymous said...

Strange things were afoot in the real estate market back in 2008. Now investors should certainly put together a carefully thought out investment property model before jumping into the market.