With their online platform Proppy, Tyson and Hannah Walker are out to disrupt New Zealand’s real estate market, and save buyers and sellers a truckload of time and money.
Just as Airbnb disrupted the world’s accommodation sector, and Uber the taxi market, here in New Zealand an audacious start-up is out to turn the local real estate industry on its head.
It has a cheeky name – Proppy – and its proud parents, Tyson and Hannah Walker, are confident it will quickly grow into a much-loved brand.
Proppy (www.proppy.co.nz) is New Zealand's first online real estate auction platform.
“The first in this country to hold an online real estate auction, and to our knowledge the only platform that lets you complete the whole property transaction online, from initial listing right through to the signing of a sale and purchase agreement,” explains Tyson.
“It’s a total end-to-end solution that cuts out the middle-man.”
Proppy was born in September 2016, after two-and-a-half years, many focus groups, “hundreds of cups of coffee and countless whiteboard sessions” in gestation.
Ten months after going live and with a major marketing and recruitment campaign underway, Tyson and Hannah believe the platform’s about to go through its first major growth spurt.
The Proppy story had its genesis five years ago when the couple met through the Find Someone dating site. It was their first experience with the online dating scene, and a valuable lesson in the power of online platforms.
They had both recently returned to New Zealand after extensive work experience in London, and were surprised to discover they had mutual friends in the UK who never thought to hook them up while there.
Tyson has almost 20 years’ experience in the banking and accounting sectors, and is a licensed real estate agent. All excellent credentials, he believes, for setting up Proppy.
Hannah also has her real estate licence and brings more than 15 years of sales and business development experience to the business. She has worked in the financial markets industry, as well as a web-based company and various start-ups.
“It has all provided me with the knowledge and skills to establish Proppy and ensure the user experience is smooth, secure and successful,” she says.
The couple hit on the idea for Proppy while shopping for property in Auckland – a process they found frustrating. (It wasn’t helped by the fact that Hannah went into labour with their first child while trying to buy a house at an auction.)
“Agents weren’t telling us the truth and we spent loads of money on reports without being successful at auction,” adds Tyson. “We thought there must be a better way.”
They also considered successful overseas real estate sites such as Tepilo and Purple Bricks, and knew savvy Kiwis would embrace the new technology once they were familiar with it.
Saving up to $21k in fees on a typical $1 million house sale would be more than enough incentive to use Proppy, they believed.
“People are not happy that agents often do very little work for large commissions,” says Tyson.
Proppy’s commission rate is just 1.5 percent.
Disrupting a market is never going to be plain sailing. Initial progress for the platform was challenging and not helped by the launch timing.
It’s not just the issue of changing people’s mindsets either; Tyson says the biggest challenge was ensuring they had all the legal framework covered.
“What the software developers wanted to do and what the lawyers said we could do were often two different things,” he explains. “We had to work together to build a solution that fits totally within the legal framework of New Zealand property law.”
But while there have been challenges, there have also been highlights – such as the first online auction and very first sale (secured using a smartphone).
At the time of writing Proppy had completed ten successful sales, all exceeding GV.
There have been lessons too. “We learnt that when you fail, it pays to fail fast – then try something different,” says Hannah.
“Don’t be afraid to be a disrupter in your industry either – and be prepared to back yourself,” adds Tyson. “Be bold.”
The benefit of hindsight is a wonderful thing as well.
“We definitely wouldn’t have had a baby so close to launch date,” says Tyson. “Hannah was working on a website release as she went in for a C-section.
“If we could do it all again we would probably hire our own in-house developers to build the online platform.
“We should also have started prospecting for new business earlier than launch, as we underestimated how long it would take to bring the first clients over.
“We were more worried about keeping our business model a secret, when really we should have gone out earlier to market with our proposition. Unfortunately our launch in late September missed the summer selling period; something we won’t miss again!”
With two young boys, life can be a juggling act, says Hannah. “But every new start-up has to make sacrifices. You’ve got to give it everything you’ve got to make the business work.”
The couple have set lofty market-share goals and will monitor Proppy’s performance regularly.
Tyson emphasises that the site is geared towards the vendor, and is convinced their 24-hour online auctions attract more buyers.
“People can join in the auction from home at 8pm – the optimum time for [Internet] traffic. They don’t have to take a day off work and the whole experience is much less stressful,” he says.
Proppy is not just an auction platform – the website also has other features, such as an online negotiation room for auctions that don’t meet reserves and a ‘Buy Me Now’ solution, ideal for developers and apartment sales. Proppy is also soon to launch online negotiations and a digital lock-box for tenders.
The transaction doesn’t all have to be done online either. There’s still a degree of human ‘hand-holding’ available when needed.
Which is one reason why Proppy’s looking to recruit an “army” of area managers nationwide.
Changing an industry
With Proppy Tyson and Hannah are determined to eliminate the smoke and mirrors from an industry they believe is long overdue for overhaul.
“We really want to change the real estate industry for good,” says Hannah, acknowledging that they’ll also need to change mindsets.
They predict the platform will resonate nicely in the regions, “where people will appreciate the lower price point”, as well as with expats and overseas buyers.
One thing’s for sure – Proppy is far from your stereotypical real estate agency. Other agents are recognising this and are already looking to be involved. There’s been a lot of interest generated.
“Once our army’s in place, hopefully by this time next year, then we’ll really get momentum happening,” says Tyson.