LJ Hooker takes on Purplebricks with disruptive service

01 Mar 2017

Australian real estate brand LJ Hooker has revealed its plans to launch a low-cost real estate service called Settl, which will allow homeowners to sell their properties themselves.

The online service will charge homeowners a fixed-fee to sell their properties, with the option to access a real estate agent from within the LJ Hooker network for certain services, such as open-for-inspections and auctions.

LJ Hooker chairman Janusz Hooker (from LinkedIn with thanks)

It follows the successful Australian launch of the U.K.-based Purplebricks last year, and the increasing number of “disrupter sites” that have entered the Australian market in the last few years, including BuyMyPlace (ASX: BMP), Hello Real Estate, ForSaleByOwner.com.au and Agent in a Box.

Australia is a desirable market for DIY real estate services to enter. House prices in the capital cities are some of the highest in the world and homeowners are accustomed to paying for everything themselves — from marketing to conveyancing, to the cost of an auctioneer.

That’s in addition to the agent’s fees and commissions, which range from 2 percent of the property’s sale price in a capital city such as Sydney, to as much as 4.5 percent in regional areas. (In Sydney, the median house price just reached a record $1.1 million AUD ($843,000 U.S.) in January, up 4.7 percent on the previous quarter.)

However, speaking at the Wild Digital conference in Sydney, OpenAgent co-founder and CEO Zoe Pointon said the market for DIY real estate services was small: “Only 7 percent of homeowners want to sell their home themselves.”

Rather, Pointon said homeowners would prefer to do some of the work themselves with the help of a real estate agent.

It’s this section of the market Settl aims to tap into, leaving the LJ Hooker brand to continue under the traditional commission-based real estate model.

“There will be two brands — LJ Hooker and Settl — serving two distinct customers,” LJ Hooker chairman Janusz Hooker told The Australian Financial Review (possible subscription), adding that Settl will cater to millennials and “digital natives” who wanted to “pay less and do more themselves”.

Settl’s pricing hasn’t been released yet, but it’s expected to be in line with the prices offered by Purplebricks, which charges $4,500 to 5,500 AUD ($3,453 to $4,220 U.S.) for a private treaty sale and $5,500 to $6,600 ($4,220 to $5,064 U.S.) for an auction.

Settl will go live in the second quarter of this year.

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Angela Hawksford

Angela is a writer and journalist based in Sydney, Australia. She has extensive knowledge of the Australian real estate industry, having started her career in real estate advertising at News Limited newspapers, where she worked across a number of different mastheads in Sydney. She s also worked in television, magazines and online, and regularly contributes feature articles to The Sydney Morning Herald, MiNDFOOD and The Newcastle Herald.Angela also works as a content writer, creating written content for a number of SMEs across an array of industries, including real estate, education, technology and digital media.