Cheap PropTech is a false economy, agents are warned

Agents who use cheap PropTech could end up spending a lot more than they expect, according to an industry expert.

Anton Babkov, chief executive of CRM software company Rex, says it’s tempting to go cheap when agencies review structures and processes in the light of the pandemic.

According to Rex, the most obvious but significant hidden cost of cheap software is the replacement when it becomes apparent a better product is needed.

There is also the training and retraining staff if software is purchased but quickly outdated by better products.

"As well as the costs of retraining staff, there is a risk of fatigue. They may become overwhelmed with information, lose interest and start making errors on the new system" explains Babkov.

"Agents changing CRM providers also need to make sure they make the right decision due to the downtime associated with making a change. Replacing a failed cheap system doubles the business disruption cost."

Babkov explains that two other significant hidden costs of cheap PropTech are time - the cost of time which could be spent working on other problems - and missed business opportunity costs, in which poor software could reduce connections with prospects while staff are focused on working around its deficiencies.

"Poor software can also harm consumers' perception of your agency if it fails to remind you of key dates or slows your response times. This 'churn' cost could be significant" he adds.

His advice to agents choosing tech products is simple - when making a decision, follow the advice they themselves gives prospective vendors.

For sellers choosing which agent to use, it can be tempting to go with the firm which offers the cheapest fee and the highest valuation. But this route could result in a more stressful selling process which takes longer and achieves a lower sale price.

"When a prospective vendor tells you they're going with a discount agent who is willing to lower their fees, it's frustrating. When you consider the service levels, communication and little extras the best agents can provide, vendors can get a lot more for their money by paying a little more" Babkov explains.

"The same thinking applies to CRM software and technology solutions. Cutting corners to save a small amount of money rarely generates the best results."