A new mobile application that cuts out brokers and their commissions from the sales and rental process has plans to disrupt the UAE real estate industry for the greater good of customers.
The Chinese investor-backed app, with more than $1.3m (AED5m) put into its research and development over the past two years, also intends to cash-in on China’s significant interest in Dubai’s real estate market by facilitating direct transactions with developers through the app.
Scheduled to launch next month, Hi Sandy is the brainchild of Dubai-based realtor Sandy Zuo.
With 25 years of experience in the UAE and international market, her goal was to build a platform to ease property rental and sales transactions and make it stress free and without the burden of commissions.
On average, agents in the UAE typically charge between two to four percent on purchase or lease of a property, with the fee typically based on the value of the property. Brokers can make thousands of dirhams in a single transaction.
According to the latest figures from the Dubai Land Department, real estate brokers in the emirate earned $155 million (AED571m) in commissions during the first half of 2018.
Hi Sandy allows sellers and landlords to list their properties and directly connects them with buyers and tenants.
Both parties can schedule viewings, negotiate prices, schedule documents for pickup delivery, and close deals – all through the app. Instead of commission, Hi Sandy charges a fixed fee for all transactions, set based on unit type, that’s just a small fraction of what a broker would charge.
“The whole purpose of it is to connect buyer and seller, landlord and tenant, minus broker,” Ahmed Taha, Hi Sandy’s director of marketing, told Arabian Business in an interview at Cityscape on Wednesday.
“It might upset brokers but think about it from the customer’s perspective. It’s for the greater good. We have to open the door for technology because the purpose of it is to facilitate our lives. How many people in Dubai suffer during the rental process or have begged off investing or moving house because of the commission?”
Fixed fees and all-in-one convenience
The app also eliminates the menace of fake real estate advertisements that brokers use to lure leads.
“These are absolutely verified ads,” Taha stressed.
When an owner or landlord lists an advert, an “area marshal” from Hi Sandy visits the property to take photos and verify the listing.
Hi Sandy’s area marshals also take customers to the viewing. Meanwhile, the app facilitates negotiation online by giving owners the option to set a negotiation bracket, along with cheque terms. It also deals with the contractual process by providing standard contract templates online.
“We even come to your doorstep and collect your documents for signing and then drop it back to you,” Taha added.
He said the company is still in the process of finalising the rate of the fixed transaction fees but stressed that they would be “significantly lower” than even the lowest commission.
“We haven’t defined all fees yet but the fixed fee for a sale would be around between 2,000 to 3,000 dirhams,” he added.
The company would make its money from fixed fees per transaction. Neither developers nor individuals have to pay to list on or use the app.
“If you want to book a unit (to buy), all you have to do is pay us a fixed fee for each unit type,” he explained.
Unlike the current scenario where agent fees are mostly based on the value of the property, Hi Sandy’s charges are value-independent.
“Whether you buy a one bedroom apartment for one million or 1.5 million, it’s the same transaction fee,” Taha said.
Global cash back from off-plan
Hi Sandy also plans to amass fixed fees from investors by incentivizing investors to use the app to buy off-plan.
Taha explained: “If you’re looking to buy an off-plan unit, the market doesn’t charge any commission for that. But the broker gets commission from the developer. So we take that commission from the developer and we give it to the buyer in full as a discount or cash in hand.
"So let’s say you bought a property from Emaar for two million UAE Dirhams, and you buy it from our app, you get the two percent commission (40,000 dirhams) as cash in hand. And you just pay our low fixed fee.”
Pre-launch, the app already has 100,000 rental listings in place as well as all major freehold projects.
While the app currently only covers Dubai, it will expand to cover listings across the UAE over the next three months.
Also on the cards is expansion across global markets, especially China, which is why the app is available in English, Arabic and Chinese.
According to latest figures from the Dubai Land Department, Chinese nationals were among the top 10 nationalities of investors in Dubai property in 2017 with the total value of transactions exceeding 14.34 billion dirhams since July 2002 until this July.
“This app will help Chinese investors and that’s also one of the reasons we built it,” he said.
“Anyone with the app will be able to invest and do deals in the UAE using this app.”