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RESAAS Resources' social networking land grab

Last updated: 04:57 18 Jan 2017 EST, First published: 23:57 17 Jan 2017 EST

House sale
The service is largely North American-based but the model does work overseas

You can't stop real estate professionals networking, but you sure can make it easier for them to do so.

That's the view of RESAAS Resources (CNSX:RSS), a youthful Vancouver-based software firm that has developed a fast-growing social network platform for real estate professionals.

Unlike some social network platforms we could mention, this is not a service that is going to distract users from going about their business; quite the opposite, as its major purpose is to help real estate professionals operate more efficiently.

It is a business-to-business operation that facilitates online the kinds of interaction real estate agents have been having in what one might term “real life” for decades now.

“That's how a lot of business is still done, despite the internet. We thought no one is doing this on any kind of scale,” company president Tom Rossiter observed to Proactive Investors, explaining the origins of the company.

In 2012, the company had a beta version of its network up and running, and in 2013 it went live with the platform, and now it has more than 400,000 licensed real estate professionals using the multiple listing service (MLS) all over the world.

The aim is to provide agents and brokers with networking tools to gain referral business, receive qualified leads, market listings and to stay at the forefront of the minds of their clients.

Rossiter explained that the product was built with the individual agents in mind.

An unexpected bonus has been interest from the brokerages and international franchises that are interested in adapting the platform to their own needs.

“When we built RESAAS we focused on agents because they really power the industry, but in doing so we've also ended up being the darlings of brokers, and the people that run large offices, the big franchises such as Knight Frank, and more recently MLSs [multiple listing services) and associations,” Rossiter said.

It's from the agents that the company receives one source of revenue, following a fairly standard “fremium” software-as-a-service (SaaS) model.

Agents sign up for a standard service that provides a number of services, such as new listings, for free, but they can pay extra for premium features, such as the SMS (text) alert service, which is a highly desirable feature for those agents who are not strapped to their desk with their eyeballs glued to the computer monitor all day.

As we've learnt from other social networking platforms, generating revenue from this model is a very long game, albeit a potentially lucrative one if you establish yourself as the dominant player, which is what RESAAS is setting about doing.

The bigger piece of the revenue pie, as Rossiter calls it, though, is the white label service whereby organizations use the RESAAS platform infrastructure for their own closed-user group – a modern-day intranet, as Rossiter describes it.

The corporations pay a monthly fee to have their own version of the RESAAS service on top of which they also pay a monthly fee per agent.

Some industry pundits have suggested that the information technology (IT) infrastructure being used by many MLSs is showing its age; RESAAS, with its cloud-based, mobile-friendly, real-time offering, provides the organizations the opportunity to switch to something that is more fit for purpose in the current environment.

In a fast-moving market, the MLSs struggle to keep pace, but RESAAS gets them back in the game.

While MLSs are largely a North American phenomenon, RESAAS has proved it works on a global scale, having signed a deal in 2014 with Re/Max, which has 101,000 agents worldwide in 108 countries, to provide a global referral service.

The collaboration has proved the model works with multi-national real estate brands, but it would be fair to say that RESAAS needs more dominoes to fall to achieve the scale it needs to become profitable. 

For the nine months ended September 30 the company generated revenues of $202,201, almost double the amount it made a year ago.

As is common with companies at this formative stage of their commercial development, RESAAS was loss-making. The net loss for the nine months was $6.2mln.

The key questions are: is RESAAS in the right market and does it have the right product?

There is little doubt about the longevity of the real estate sector.

As Rossiter points out, “buying a house is a bit more complicated than buying a plane ticket”, so it is advisable to use a professional.

As for having the right product, quite clearly the agents love the service and the company is beginning to land some big fish on the corporate side, so from this point it should largely be a case of executing on the plan.  

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