Key Challenges & Solutions for Real Estate Agents in a Volatile Market

The real estate industry remains highly volatile, shaped by fluctuating interest rates, economic pressures, and evolving market conditions. In this environment, real estate agents face increased competition and significant challenges.

According to Lynne Krawchuk, CEO of Under One Roof, a tech-driven property listing platform, agents are struggling with the impact of dominant online platforms, FICA compliance, the current market downturn, and financially cautious clients.

• Challenges for Estate Agents: High listing fees, FICA compliance, market downturn, and cost-conscious clients are hindering profitability for real estate agents.
• Online Platforms’ Impact: Dominant listing platforms reduce agents’ revenue, especially for smaller agencies, with high fees and difficulty differentiating listings.
• Under One Roof Solutions: Provides tools to streamline operations, assist with FICA compliance, and offer financing services, helping agents navigate market challenges.

Key Challenges Facing Estate Agents

Real estate professionals are battling several obstacles that hinder profitability:

• Online Platforms’ Costs - While online property listing platforms offer agents greater visibility, the high listing fees are eroding agents’ revenues. For smaller agencies, these costs are especially burdensome, and the difficulty in differentiating non-exclusive listings further compounds the issue. One agent noted, “These platforms contribute to exposure, but the ROI isn’t always proportional due to the listing fees.” For many, the costs of competing in this crowded digital space are unsustainable.
• FICA Compliance - Real estate agents, particularly those in smaller agencies without administrative support, face time-consuming tasks related to FICA (Financial Intelligence Centre Act) compliance. The process of collecting and submitting the necessary documentation for buyers and sellers can delay transactions, ultimately impacting an agent’s ability to close deals and receive commissions on time. As one agent put it, “There are no shortcuts with FICA compliance, so delays in finalizing a sale are common.”

• Market Conditions - The South African real estate market is experiencing a downturn. High interest rates and inflation are causing buyer behaviour to slow, while sellers are reluctant to take a loss on properties purchased during more favourable market conditions. Properties are taking longer to sell, and agents are forced to deal with lower commissions as sellers adjust prices downward. “High interest rates and inflation are obviously shaping buyer behaviour and impacting sales volumes,” explained one agent.
• Cost-Conscious Clients - Both buyers and sellers are increasingly focused on minimizing costs, including negotiating lower commissions and fees with estate agents. In a competitive market, agents must remain flexible, offering better value to secure listings. As one agent shared, “I need to bring the best value to my clients in terms of marketing, careful negotiation, and closing deals quickly to keep my turnover up.”

Under One Roof’s Innovative Solutions

To address these challenges, Under One Roof offers a range of solutions designed to help agents streamline their operations and improve profitability:

• Tech-Driven Tools - Under One Roof provides agents with user-friendly tools that assist with everything from listing properties to managing client interactions. These solutions help small and medium-sized agencies compete more effectively in a tough market.

• FICA Compliance Assistance - The platform simplifies the FICA compliance process by assisting with the uploading of necessary documents and handling some of the verification work, saving agents valuable time.
• Financing Services - For cost-conscious buyers, Under One Roof offers access to bond origination and bridging finance services, helping secure the best home loan deals and making transactions smoother for agents and clients alike.

Krawchuk emphasises that Under One Roof isn’t just a property listing service but a comprehensive partner for agents. “We help agents navigate the complexities of today’s real estate landscape, ensuring they can focus on building relationships and closing deals,” she said.

A Path Forward

Krawchuk warns that the property market is expected to remain challenging for the foreseeable future. However, Under One Roof’s innovative digital solutions are supporting the sector’s transformation, offering valuable services to agents, buyers, sellers, renters, and landlords. This property ecosystem is designed to help agents overcome current hurdles and future-proof their businesses in an increasingly competitive market.