One of the largest players operating in the Brazilian real estate sector is about to introduce a new way of doing things. Grupo Zap, the company behind the property price index FIPEZap, has announced its i-buyer. Modelled on similar methods already in operation in the US, it aims to take over 10% of business within the Brazilian property market.
Instant buyer model for Brazilian real estate
Group Zap has developed its own i-buyer. Based on instant property purchase, the model scours online real estate portals in search of homes to buy and refurbish. The idea is then to sell them on to another buyer.
The model already exists in the US where Open Door and Zillow dominate the market. Zillow is by far the largest and plans to expand even further. According to Forbes, Grupo Zap plans to replicate the business, although the company will partner with Brazilian real estate agents rather than directly with owners as is the case in the US.
The i-buyer in Brazil will start operations in several districts in Sao Paulo. The pilot stage will take until December when Grupo Zap will extend business to five more cities in the country. The company aims to get 200 properties on its books in a year and eventually account for 10% of transactions on the Brazilian real estate market. By May 2020, it will have doubled its presence nationwide.
To do so, Grupo Zap has invested R100 million and taken on 500 new staff to join its existing workforce of around 800 people. The ambitious plans will draw on the company’s comprehensive analytics, produced on the markets in the largest cities in Brazil.
“We will draw on our analytical capacity to understand and predict market trends,” said Lucas Vargas, Chief Executive at Grupo Zap. “Our access to the entire real estate value chain and the speed inherent to the model will reduce our exposure to any market oscillations,” he added.
One of the main purposes behind the i-buyer is to speed up sales within the Brazilian real estate market. Sales currently take considerable time owing to the lack of information on market prices, particularly in the resale sector. “This creates difficulties when it comes to defining the right price, so negotiations are often long, drawn-out processes,” said Vargas.
Better information for sellers and buyers of resale properties will facilitate transactions. This together with a wider range of mortgages should drive growth within the market. Vargas believes that the current 500,000 sales a year could rise to over 1 million within 10 years. There are already signs of movement in the home loans sector. Mortgage lending in Brazil has already got off a flying start this year.
Along with more facts and figures for market prices, the i-buyer will also provide more information for buyers. Details about homes for sale on the platform will include virtual reality tours to give buyers a better idea of what the property looks like.