Realestate.com.au is one of Australia’s most well-known brands, and it is entering broking. Executive director Andrew Russell tells MPA editor Sam Richardson that its success will be based not just on scale but on technology
Realestate.com.au is one of Australia’s most well-known brands, and it is entering broking. Executive director Andrew Russell tells MPA editor Sam Richardson that its success will be based not just on scale but on technology
Broking has had plenty of new entrants, but few disruptors. Powerful real estate groups have established broking arms, but these differ little from what’s already in the market, while much-hyped fintechs still cater to a tiny proportion of customers. To really disrupt broking – to alter the structure of the industry – requires not only a new idea but huge investment and scale. In late December 2016, with most of Australia on holiday, those three factors finally came together.
The partnership between realestate.com.au and NAB was the result of years of planning, according to executive director of financial services Andrew Russell. “We wanted to partner with one of the leading banks in the world, a big four bank, from a skills base and credibility perspective,” he says.
Russell himself had been brought over from Mortgage Choice after a conversation with Tracey Fellows, CEO of REA Group, which owns realestate.com.au. “I saw a tremendous opportunity when speaking to Tracey Fellows: the opportunity to build a world first in the area of property search and finance,” Russell recalls.
The integrated mortgage
Realestate.com.au’s entry into broking hit the news in June of this year, when the REA Group acquired an 80.3% stake in Smartline. A week later rival website Domain announced that it would also be entering broking in partnership with online mortgage broker Lendi. Realestate.com.au Home Loans was launched quietly in September, just before MPA spoke to Russell.
Three major components separate realestate.com.au Home Loans from anything that has gone before, Russell explains. The first is an online calculator built into the website’s property search function.
“We have built what I’m terming the best calculator in the world,” Russell says.
With the information stored on the website, borrowers can search only for properties they can afford.
Every property page on realestate.com.au has the calculator built into it, alongside what Russell terms a “liveability metric”. Utilising the information in the calculator, this interactive tool shows borrowers how meeting repayments on a property could affect their lifestyle – an innovative solution to regulators’ demands for more responsible lending provisions.
Finally – and perhaps crucially – realestate.com.au users can apply for conditional approval of a home loan before selecting a property. “It’s not a Mickey Mouse approval that you might see from others in the market,” Russell says. “This is a big four bank-backed approval powered by NAB.”
With the information on the calculator, plus an online form that takes 15–30 minutes to complete, borrowers can get instant conditional approval for similar properties in a similar area. Furthermore, Russell explains, “your search experience will then be updated for all the different properties that you are approved for”.
At the time of writing, borrowers requiring lenders mortgage insurance or refinancing had to use a call centre. However, Russell insists such borrowers will be catered for. “We’re just trying to ensure we have the right processes at the contact centre, but over time, as we get running, all of that will be embedded into the experience if the consumer puts the right information in.”
Realestate.com.au has a lender panel, which, although limited, includes all four majors, a range of non-majors and two non-banks. These lenders are presented on formal approval, when the client talks to a broker, either in person or on the phone. At that point the consumer can say, “I want to look at a whole panel of lenders because of my various circumstances”.
Russell insists that customers will get the most suitable loan for their needs. “I would like to make this point clear,” he says. “We’re product-agnostic when we’re making the approval selection point. It’s based on your income and expense information.”
Yet the ‘opt-out’ involvement of NAB appears to sit uneasily with the concept of consumer choice.
Although realestate.com.au’s broking operation is in its infancy, the numbers are already impressive. “More than one million Australians a day engage with their property search here,” Russell explains. “That’s a massive audience, and we believe that with the size of that audience we will be representative of the market; all home buyers in Australia will be interested in our experience.”
Those customers will be assisted by more than 100 brokers, drawn not only from Choice Home Loans but from across the industry. Beyond the number of leads, “our mortgage brokers will be carrying the realestate.com.au Home Loans brand, both on their business cards and their shopfront, representing our business, one of the strongest and most well-known brands in the country.”
One group of brokers that won’t be involved are Smartline brokers. Despite being mainly owned by REA Group, the franchise will continue to be run independently “in the medium term”, according to Russell.
With an established brand, disruptive technology and bank backing, Russell has every reason to be ambitious.
“We think that we have a tremendous opportunity to change the way that home loans are sold and bought in this country. You’ll see all of our business going from strength to strength in the coming months, and we’re very excited about the opportunity to be not only the place for homes in Australia but the number one place for home loans.”
Broking has had plenty of new entrants, but few disruptors. Powerful real estate groups have established broking arms, but these differ little from what’s already in the market, while much-hyped fintechs still cater to a tiny proportion of customers. To really disrupt broking – to alter the structure of the industry – requires not only a new idea but huge investment and scale. In late December 2016, with most of Australia on holiday, those three factors finally came together.
The partnership between realestate.com.au and NAB was the result of years of planning, according to executive director of financial services Andrew Russell. “We wanted to partner with one of the leading banks in the world, a big four bank, from a skills base and credibility perspective,” he says.
Russell himself had been brought over from Mortgage Choice after a conversation with Tracey Fellows, CEO of REA Group, which owns realestate.com.au. “I saw a tremendous opportunity when speaking to Tracey Fellows: the opportunity to build a world first in the area of property search and finance,” Russell recalls.
The integrated mortgageRealestate.com.au’s entry into broking hit the news in June of this year, when the REA Group acquired an 80.3% stake in Smartline. A week later rival website Domain announced that it would also be entering broking in partnership with online mortgage broker Lendi. Realestate.com.au Home Loans was launched quietly in September, just before MPA spoke to Russell.
Three major components separate realestate.com.au Home Loans from anything that has gone before, Russell explains. The first is an online calculator built into the website’s property search function.
“We have built what I’m terming the best calculator in the world,” Russell says.
With the information stored on the website, borrowers can search only for properties they can afford.
Every property page on realestate.com.au has the calculator built into it, alongside what Russell terms a “liveability metric”. Utilising the information in the calculator, this interactive tool shows borrowers how meeting repayments on a property could affect their lifestyle – an innovative solution to regulators’ demands for more responsible lending provisions.
Finally – and perhaps crucially – realestate.com.au users can apply for conditional approval of a home loan before selecting a property. “It’s not a Mickey Mouse approval that you might see from others in the market,” Russell says. “This is a big four bank-backed approval powered by NAB.”
With the information on the calculator, plus an online form that takes 15–30 minutes to complete, borrowers can get instant conditional approval for similar properties in a similar area. Furthermore, Russell explains, “your search experience will then be updated for all the different properties that you are approved for”.
At the time of writing, borrowers requiring lenders mortgage insurance or refinancing had to use a call centre. However, Russell insists such borrowers will be catered for. “We’re just trying to ensure we have the right processes at the contact centre, but over time, as we get running, all of that will be embedded into the experience if the consumer puts the right information in.”
“We think that we have a tremendous opportunity to change the way that home loans are sold and bought in this country”
NAB’s involvement
Russell is acutely aware of the convenience of realestate.com.au’s process and the ability of a borrower to both find and finance their dream property at any time of day. Yet providing this convenience carries a cost, both for realestate.com.au and potentially the consumer.
Realestate.com.au has a lender panel, which, although limited, includes all four majors, a range of non-majors and two non-banks. These lenders are presented on formal approval, when the client talks to a broker, either in person or on the phone. At that point the consumer can say, “I want to look at a whole panel of lenders because of my various circumstances”.
Russell insists that customers will get the most suitable loan for their needs. “I would like to make this point clear,” he says. “We’re product-agnostic when we’re making the approval selection point. It’s based on your income and expense information.”
Yet the ‘opt-out’ involvement of NAB appears to sit uneasily with the concept of consumer choice.
“I would like to make this point clear: we’re product-agnostic when we’re making the approval selection [decision]. It’s based on your income and expense information”
One million leadsAlthough realestate.com.au’s broking operation is in its infancy, the numbers are already impressive. “More than one million Australians a day engage with their property search here,” Russell explains. “That’s a massive audience, and we believe that with the size of that audience we will be representative of the market; all home buyers in Australia will be interested in our experience.”
Those customers will be assisted by more than 100 brokers, drawn not only from Choice Home Loans but from across the industry. Beyond the number of leads, “our mortgage brokers will be carrying the realestate.com.au Home Loans brand, both on their business cards and their shopfront, representing our business, one of the strongest and most well-known brands in the country.”
One group of brokers that won’t be involved are Smartline brokers. Despite being mainly owned by REA Group, the franchise will continue to be run independently “in the medium term”, according to Russell.
With an established brand, disruptive technology and bank backing, Russell has every reason to be ambitious.
“We think that we have a tremendous opportunity to change the way that home loans are sold and bought in this country. You’ll see all of our business going from strength to strength in the coming months, and we’re very excited about the opportunity to be not only the place for homes in Australia but the number one place for home loans.”
