In Nigeria, the real estate industry is characterized with sworn secrecy, clandestine arrangements, bizarre agreements and unimaginable esoteric acts. Having enough money to buy or rent a property is not enough; there is the need to know those that truly matter in the sector.
It has become a familiar occurrence to hear stories of individuals who were swindled of their hard earned money when they engaged the services of fraudsters posing to be agents and/or property owners. This is further compounded by the conflicting and confusing guidelines on real estate conflict resolutions.
There are several TV and radio shows that attempt to resolve property conflicts, most of which happen when a particular property is sold to more than one buyer while lawsuits take years to get a verdict.
For real estate agents, agencies, tour guides, landlords, caretakers and several others involved in the business of real estate, running into desperate individuals is best for business. However, for tech entrepreneurs, it is an opportunity to deploy the power of the World Wide Web to make it easier for Nigerians in need of houses to rent or buy.
According to Oluwafemi Taiwo, Founder and CEO of PrivateProperty.com.ng, Nigeria’s number one online real estate marketplace offers buyers and tenants larger varieties of properties and security.
“The traditional methods left a lot of buyers and tenants with a limited choice of property for sale or rent. As Nigeria’s number one property marketplace, we have a larger variety of properties for users on our site,” he said. “Also, by partnering with certified agents and developers, we aim to boost the confidence of users of our sites in real estate transactions.”
Through online real estate, he said, sanity is being returned to the nation’s real estate sector.
Instilling Trust in Online Real Estate
Showing potential buyers and tenants properties on the internet is not enough, said Dapo Eludire, co-founder and chief operating officer of PropertyPro.ng (formerly ToLet.com.ng) — another online real estate platform which delves into the logistics aspect of real estate. Other components of real estate could also be enhanced by better helping individuals through the process of securing a place, he said.
He raised the issue of trust which seems elusive in the nation’s real estate sector. Eludire noted that it gets more difficult to convince Nigerians to trust a website more than the age-long practice that is involved when looking for real estate properties.
In spite of the trust challenge, he agreed with Taiwo that the benefits outweigh the risks:
“Online real estate has more advantages over the traditional way. [Traditionally], you go to a place like Surulere for instance. You will begin to look for an agent who has a sign outside or runs a local real estate company. He shows you what he has and if you are not satisfied he tells you to come back some other time. A few days later, he calls you after calling some other agencies thus extending the network,” Eludire said.
“But using the internet, you don’t have to leave the comfort of your office or home; you can even do it while stuck in traffic using your laptop or with the aid of your mobile devices,” he added. “You can search the website and search through more than 1,000 listed properties available in the city with pictures and descriptions. Right from where you are, you will have an idea of what the property entails.”
Generating Revenue Through Online Property Services
When it comes real estate platform operators making money, they said there are several avenues — the most common one for PropertyPro.ng is to charge its users for the services the platform offers.
“Using the traditional method, you will be asked to pay a certain amount to the agent. If the person doesn’t satisfy you, you will go to another agent and probably pay the same amount,” Eludire added.
“But on our platform, we have dedicated agents. We charge about N5000 ($31.50) which allows you to see as many properties as you want, until you see one that satisfies you,” he said, noting that other tasks like closing real estate deals, securing documents and key collection are included in the cost and online service package. PropertyPro.ng handles about 1000 requests daily.
Internet Penetration, Government & Online Real Estate Potential
On the potential of online real estate in Nigeria, Taiwo, Founder and CEO of PrivateProperty.com.ng, said it is tremendous — although he noted that internet penetration is essential to the sector.
“The potential is enormous. We are actually targeting three industries which are advertising, information technology and real estate. Internet penetration plays a key role in the potential of the online real estate industry on Nigeria.There are about 48 million Nigerians with access to the internet either via the desktop or mobile phones,” he said.
A multibillion-dollar industry in the developed world, Taiwo also said that the growth of the advertising and mortgage industries “will substantially increase the potential” and feed into the growth of online property businesses in Nigeria.
He said: “Players in this particular space in the western world are valued at billions in U.S. dollars. RealEstate.com.au in Australia is a $5 billion company, Rightmove.co.uk in the UK is a $4 Billion company, Seloger.com in France is a $1 Billion company and our South African business – PrivateProperty.co.za is worth over $200 million.”
He also described roles that government could play to improve the sector.
“The demand for properties in Nigeria is affected by the unavailability of affordable housing. In addition to solving the affordable housing challenge, a working mortgage system will awaken the Nigerian real estate industry, which in turn will mean more demand for the services of real estate professionals/developers and thus our platform,” Taiwo added.
For both companies and other online real estate platforms in Nigeria, this is the initial stage within an industry that may be much bigger than the nation’s highly successful e-commerce sector. This is why they’ve both set high goals for next year.
While PropertyPro.ng plans to reach more Nigerian cities and dreams to go international, PrivateProperty.com.ng believes that intensifying efforts on customer service and opening offices in more Nigerian cities and other African countries – both Anglophone and francophone, would form the fulcrum upon which the company’s future revolves.
Although both companies believe their platforms are not a threat to traditional real estate practices, only time will tell whether contemporary real estate practitioners should add internet savvy to their resume or leave the business for good.