Two estate agencies have looked to a crowdfunding platform to try to raise investment.
Online agency HouseSpotters wants £150,000 to “ensure the brand is at the forefront of the market with 85 per cent of the investment going into online and offline marketing as this is key to developing awareness to turn leads to client sign ups.”
The rest will be used “for increased staffing and general overheads” according to a statement from the firm.
The agency offers sellers two options - £460 including VAT upfront with no ‘selling fee’ or £240 including VAT upfront with a selling fee of £600 including VAT.
Meanwhile Lettingsupermarket is using the same crowdfunding platform to try to raise £125,010 in return for five per cent equity.
Investments of £25,000 or more will qualify for property management free of charge, whilst these shares are held, for up to 10 properties.
It says it will use the cash for a "robust expansion" after developing its technology for the past three years.
Lettingsupermarket provides what it calls “a fully comprehensive letting and management service” at four per cent plus VAT.
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HouseSpotters turnover £15K a year and they value the business at £600K ??? Can just see Peter Jones asking how can you justify the valuation LOL
Good morning Ian, looks like you have read that wrong , the figure was 15K turnover from the Start of the year( Jan Feb ) from Launch however this has increased monthy to over 10K per month the following 2 months . As one of the fastest growing Scottish Agencies the valuation is justified .
One can only presume that this new brand will remain local and not National...
£150,000 is nowhere near enough to gain additional National exposure!
As a relatively new start brand owner myself, I am genuinely interested and wish them all the very best...
Thank you Matt, it is our intention to approach national coverage on a region by region basis. Our initial funding will allow us to develop Scotland , to give you an idea Purple Bricks in Scotland have launched around the same time as ourselves with a massive spend on tv and radio , they have just under 60 properties for sale and we will have just under 40 for sale . We are achieving this with a different marketing format and are seeing very quick growth. We believe that this can be duplicated ongoing region by region.
Wish you well with your venture.
Good luck to them. Crowdfunding, more and more, seems to be the way to go for investment these days, with banks less willing to lend to small businesses or start-ups. It does seem to be the future.
Part of me does wonder, though, how all these new online companies are going to make any money. There seems to have been a raft of new companies and start-ups in the last few months, in what is already a very dog-eat-dog environment. I'm just sceptical about how they will all be able to do business.
On the other hand, I'm really not sure about Lettingsupermarket - haven't we got enough of these sties already?
*sites.
Is there one online agent who can actually carry themselves?? Just interested.
Afternoon Terance, I would like to think we can ,do you mean financialy or in terms of delivery of a service?
Hi Craig, financially. I do not doubt you offer a good service.
For once, an interesting thread taking shape...
I set out to launch an online only business, but gave in due to there not being enough local take up.
It very quickly came to light that my local area wanted a new brand, but a new High Street brand...
I've since opened two offices.
Hi Matt , How did it become apparent that they wanted the high street brand ? We have found that there is movement toward online from a sector of the market however we also believe that the traditional route has its place. Unlike Mr Quirk we think that both models are closer than most would like to agree .
How many times have people said: all agents are 'online' these days...
Craig,
I agree with you...
The best online agents and High Street agents will not only survive, but strive as agents throw in the towel.
For the first 12 months I ran Harwell Estates from a first floor office, then I was offered a High Street unit which was as cheap as chips and in a prime location.
I took a chance on it and never looked back...
There always seems to be a lot of posturing and arguing when it comes to online agencies - it's nice to see that you've not been struck down by this bug Matt!
It's interesting to see how you taken on a very competitive market place and are doing well, certainly congratulations!
In my view Online Agents, with lower fees, have made the highstreet step up and justify/earn the higher fee. End of the day Online or Highstreet, any agent that provides proper service and good value for money/can properly justify their fee, can only go from strength to strength and should be applauded.
So Craig at £15K with 3/4 staff you must have lost £40-50K so the valuation is WILD at best. I know quite a lot about the online market and know you are miles behind even in Scotland, where there is only 1/2 serious players. You will need more than 150K just to be bigger than these guys and they are small.
All the best think you may need it with £2K only raised. By this time in launch you should be at 30/40K and then other investors get confidence. PLUS most of the investment seems to come from near your base??
Investors are not stupid, there is nothing revolutionary about ANOTHER online agency - it's JUST ANOTHER ONLINE AGENCY - what is different between you and Emoov / House Simple in Scotland ?? What is they USP of your business, cause there is nothing I can find that you do different AND these guys have got sh*t loads of cash to burn with £millions in marketing budgets?
Fantastic response Ian, I think i have an understanding of where you are coming from very similar views to Colin Bain ! Unfortunately you dont have all the facts to hand to make some of the statements. Firstly we are in profit havent lost a penny , secondly your main gripe seems to be that we arent different to emoov/ House Simple , for some reason in Scotland we arent up against them however we are gaining instructions rapidly against a wide range of other agents. Thanks for your input though.
Regards
Craig
Sorry Craig no idea who Colin Bain is I am afraid? Maybe you can expand?? But you still have not answered my main point WHY are you different for an investor? Why you? Plus of course house simple/emoov are your competitors, do they not sell in Scotland as well ? Are they not online agencies? They are and they have loads more property than you. If you look back at the first question I cheekily posted how can you justify a £600K valuation. Normal practice is 3 x annual profits. So you need to earn £200K..
Hi Ian, I am Colin Bain from Scot House Move.com (Scotland's Largest Online Agency !!!!) - not going to comment on debate - but will watch with interest to see if funding is received and then I will be going after £500K based on our revenue and listings LOL
Ian, I suppose we are different in a number of ways , we deliver a package for our vendors that no one in the market provides at a price point that no one in the market charges whilst delivering a local service feel , of course that is our opinion which if you wished to check on all agents is backed up by real clients. House simple have less than 40 homes for sale in Scotland with the massive budget as you point out and Emoov have less than 140 properties for sale again with a large budget. HouseSpotters will have over 55 confirmed by mid May with a small budget . Our model works our systems work and we are growing very fast . I would also point out that in the past 3 months whilst winning instructions we have only come up against Purple Bricks neither of the afore mentioned .
Thanks for your time hopefuly we will all be proven right in some fashion.
Have a great weekend.
Ok Craig fair enough, good last answer !!!! Best of luck with the funding process.
Craig, have you pulled the advert? Was checking and seen it was only at £4K ??
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