There’s a new kid on the Gran Canaria real estate block called Housell and initial impressions suggest that it’s a viable alternative to traditional estate agencies.
However, a closer look reveals that Housell’s “cheap” service is anything but good value for money.
Housell makes money every time it doesn’t sell a property!
Housell charges about 1000 euros for its basic package of property valuation, photos and listing on Spanish real estate portals.
It doesn’t guarantee that sellers will get visits or sell their property and doesn’t offer a refund if they don’t.
So, what Housell does is charge upfront for services that all estate agencies offer for free.
As an estate agent, I only charge my clients when their property has sold and all the paperwork is complete. The idea of charging clients when I don’t generate results is unethical.
Housell charges a flat fee with no guarantees: Estate agencies only charge for success.
Housell is a marketing company, not an estate agency
Most of Housell’s budget goes on advertising its packages to sellers rather than on advertising the properties to potential buyers.
Yes, it lists properties on online portals but these only account for about 50% of the sales that I make as an estate agent. The other half come from buyers who have contacted me directly rather than from inquiries from free portals.
So, Housell only makes money if it gets a constant stream of new customers who pay its up-front fee. That’s why its adverts targetting sellers are all over Facebook.
If your Housell advertising package times out, all it wants to do it persuade you to pay again.
Housell has no long-term interest in finding a buyer for a property.
Housell has no skin in the game
Housell sells its service as a cheap way of connecting buyers and sellers but ignores the fact that the hard part of a realtor’s job in Spain comes afterwards.
I spend most of my time talking to buyers, sellers, lawyers, notaries and officials to make sure that an offer leads to a sale. It’s hard work and it’s all about the people involved and the long-term relationships I have with all the parties.
People like bank managers (for mortgages), notaries, lawyers, and especially other estate agents.
To be fair, Housell does have an upgrade where you pay extra for negotiation and paperwork. However, it only has 80 employees working on them in the whole of Spain.
Given that the average property transaction in Spain involves several days of work, I can’t see how they can offer this service properly. And again, all their fees are upfront so if a transaction falls through, you still pay.
Housell charges upfront for a small part of the process of selling a property in Spain.
Housell has a big beast to satisfy at headquarters
Housell is owned by Cerberus Capital Management, a distressed asset specialist and one of the world’s largest investment companies. In the past, it has invested in distressed property in Spain and even in Spanish estate agency Haya.
Basically, Housell is a profit-driven enterprise that focuses on getting people to pay it up-front rather than a service-driven business that builds long-term relationships with clients.
Without a steady source of new clients, it doesn’t make money.
Its business model is a short-term play while selling property successfully is a long-term game that has to put people before quick profits to thrive.
Housell is designed to make money rather than to provide quality service.
Housell’s figures are opaque and we don’t know its success rate
On its website, Housell claims to have sold 1000 properties in Spain in the last year. It’s a big number but what we don’t know is how many people have paid it to advertise without success (because it doesn’t publish the statistic).
If its success rate was high, it would be all over their website so I have to wonder what’s going on.
I suspect that Housell has a low success rate and that a lot of its clients don’t get a sale.
It’s likely that, in total, Housell is taking far more money per sale than the traditional estate agency model. Otherwise, why wouldn’t Cerebus just expand its estate agency?
