LAUNCH OF SMARTLOANS.SG – SINGAPORE’S FIRST INSTANT ONLINE MORTGAGE COMPARISON PLATFORM

The Real Group develops new innovative solution to help home buyers and owners compare mortgage rates across 8 major banks in Singapore

Singapore, 6 April 2009 – New and existing home buyers in Singapore can now sleep better at night, knowing that their mortgage is the lowest it can be thanks to SmartLoans – the first-of-its-kind mortgage comparison platform serving the local market. Developed by The Real Group, SmartLoans is a free-to-use online mortgage comparison platform that enables users to easily search, compare and enquire about home loan packages available across 8 different banks. Through SmartLoans, what previously took a couple of hours of research can now take a couple of minutes. More importantly, the unbiased information provided could result in significant cost savings as users can determine which loan package saves them the most amount of money.

Previously, to find the best mortgage rates in town, users had to plough through multiple banking websites, educate themselves on the many loan packages available and calculate interest amounts manually; all of which were complicating and time consuming. Alternatively, they could approach a mortgage broker, resulting in added costs and time spent. With SmartLoans, users enjoy the flexibility of going through the process independent of a third party, as well as the ease and precision of having the system perform the calculations automatically – free of charge. SmartLoans monitors the market closely and updates mortgage rates as soon as there are any changes, ensuring that users are always provided with the most up-to-date information.

The process of getting the best rates through SmartLoans is simple. The SmartWizard tool guides users through a series of short questions and automatically creates the user’s unique “mortgage profile”. This process typically takes about 2-3 minutes in total. Mortgage-related terms such as “locked-in”, or “floating rates” are explained clearly throughout the process, to help first-timers. The SmartWizard also gives details on how to arrive at the best package. For example, it advises users on when it would be best to take up a fixed rate, or when they should avoid taking up a lock-in package.

Upon completion, the SmartWizard presents a chart and table of all applicable loan packages; sorted in ascending order of the cumulative interest they would have to pay throughout the loan tenure. Users can then opt to connect directly with the bank should they decide to find out more from the bank’s loan officer. Should the users eventually take up a mortgage with the bank through SmartLoans, The Real Group gets a commission from the bank. No charge is made to the user.

“SmartLoans gives users more control over the mortgage and refinancing process. We aim to help our customers find the best deal when hunting for a mortgage,” says Vinod Nair, CEO of The Real Group. “Many potential home buyers will find SmartLoans very useful. At the same time, it will also help home buyers who are looking to refinance their existing mortgage compare their options.”

“With the current economic downturn, we needed to refinance our mortgage. We tried SmartLoans and were delighted at how easy and user-friendly it was, even to someone like me who is not familiar with using the Internet. In the end, we found a bank that was able to give us the best refinancing option and are in the process of finalizing the paperwork. Refinancing our loan would potentially save us thousands,” said Mdm Poh, who bought her house in 2006 and is refinancing her $200,000 mortgage.

The Real Group developed SmartLoans using advanced Internet technology and a customer-centric business model. The Real Group is the same team behind HomeSpace.sg and RentSpace.sg – both map-based real estate search engines for Singapore. The Real Group’s founding members comprise of NUS graduates, who aim to enhance and simplify the home buying process.

“I am heartened to see The Real Group developing new innovative solutions for the real estate industry. Although the economic situation has had a dampening effect on the home buying scene, The Real Group have adapted their business model and developed new revenue-generating activities. More importantly, SmartLoans provides real value to its users,” said Prof Wong Poh Kam, Director of the NUS Entrepreneurship Centre, which is incubating The Real Group.

To check out SmartLoans, visit http://www.SmartLoans.sg

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About The Real Group
The Real Group was founded in 2007 and is the same team that brought the popular map-based real estate search engines HomeSpace.sg and RentSpace.sg. The Real Group is funded and supported by MDA and NUS Enterprise. The Real Group continually strives to provide pro-consumer solutions for the real estate industry. http://therealgrp.com/

About NUS Enterprise
NUS Enterprise was established in 2001 as a university-level cluster, to provide an enterprise dimension to NUS teaching and research involving the university’s students, staff and alumni. The functions of the Enterprise cluster complement the academic cluster of the University to nurture talents with an entrepreneurial and global mindset. NUS Enterprise promotes the spirit of innovation and enterprise through experiential education, industry engagement & partnerships and entrepreneurship support. www.nus.edu.sg/enterprise

Media enquires may be directed to:

Chan Yiu Lin
NUS Enterprise
yiulin@greenergrass.com.sg
Mobile: (65) 9765-5897

With HomeValue, home buyers can now be well informed of the pricing trends and past transactions of comparable homes, which means that they are empowered with data that helps them determine the best price they should pay for the house.

HomeValue is unlike any other price trend feature available. HomeValue actually does a radius scan for similar property in the area and pulls up the past transaction and listing data for those units. 

“To derive an accurate offer price, you have to refer to similar properties in the area. You cannot compare 5 room flats with 3 room flats. Even units of the same type within the same neighbourhood differ in price based on proximity to amenities.”, explained Vinod.

HomeValue cuts down more than 90% of the workload and information gathering one has to go through before making a price decision on the house. Potential buyers can track the past transaction mean of similar houses within the area of their desired house up to 2 years back.

With this latest feature added into HomeSpace’s arsenal, it now boasts of the most number of pro-consumer features to help consumers effortlessly obtain relevant information on their desired homes.

She sizes up its charms, snaps some pictures, sets the price, writes a seductive ad, shows the house aggressively, negotiates the offers, and sees the deal through to the end. Sure, it’s a lot of work, but she’s getting a nice cut. On the sale of a $300,000 house, you’ll typically pay a 6 percent agent fee of $18,000. That’s a lot of money. But you tell yourself that you never could have sold the house for $300,000 on your own. The agent knew how to - what’s that phrase she used? - “maximize the house’s value.” She got you top dollar, right?

A real estate agent is every bit the expert. She is better informed than you about your home’s worth, the state of the housing market, even the buyer’s frame of mind. You depend on her for this information.

As the world has grown more specialized, countless such experts have made themselves similarly indispensable. Doctors, lawyers, contractors, auto mechanics: They all enjoy informational advantage. And they use that advantage to help you.

Right?

Information can be a beacon, or information can be a cudgel; it depends on who wields it and how. In any transaction, it’s common for one party to have better information than the other. In the parlance of economists, this is information asymmetry. There’s value in asymmetry; it’s the reason why someone, such as a consumer, will pay someone else, an expert, for his knowledge.

Of course, sometimes an expert might manipulate his advantage for his own benefit. If your doctor suggests that you have an angioplasty - even though current research suggests that angioplasty often does little to prevent heart attacks - your first thought won’t likely be that the doctor is using his informational advantage to make a few thousand dollars for himself or his buddy. But as David Hillis, an interventional cardiologist at the University of Texas Southwestern Medical Center in Dallas, explained to The New York Times, a doctor may have the same economic incentives as a car salesman or a funeral director or a mutual fund manager: “If you’re an invasive cardiologist and Joe Smith, the local internist, is sending you patients, and if you tell them they don’t need the procedure, pretty soon Joe Smith doesn’t send patients anymore.”

Or consider these findings of a 1996 medical study: Obstetricians in areas with declining birthrates are much more likely to perform cesarean section deliveries than obstetricians in growing areas - suggesting that when business is tough, doctors may try to ring up more expensive procedures.

The Internet, of course, is all about smoothing over these asymmetries; in one industry after another, from life insurance to used cars, the Web has eliminated the expert’s upper hand by giving once-exclusive information to the online masses. But some industries have been slow to change - real estate among them.

The best way to observe information asymmetry at work is to measure how an expert treats you versus how he performs the same service for himself. Real estate provides the perfect opportunity, since housing sales are a matter of public record, and real estate agents often do sell their own homes. Recent data covering the sale of nearly 100,000 houses in suburban Chicago show that more than 3,000 of those houses were owned by agents.

Before plunging into the data, a question: What is the agent’s incentive when selling her own home? Simple: to make the best deal possible. Presumably, this is also her incentive when selling your home; after all, her commission is based on the sale price. And so your incentive and the agent’s incentive would seem to be nicely aligned. But commissions aren’t as simple as they seem. First of all, a 6 percent commission is typically split between the seller’s agent and the buyer’s. Each agent then kicks back half of her take to her agency. Which means that only 1.5 percent of the purchase price goes directly into your agent’s pocket.

So on the sale of your $300,000 house, her personal take of the $18,000 commission is $4,500. Still not bad, you say. But what if the house was worth more than $300,000? What if, with a little more effort and patience, she could have sold it for $310,000? After the commission, that puts an additional $9,400 in your pocket. Yet the agent’s additional share - her personal 1.5 percent - is a mere $150. So maybe your incentives aren’t aligned after all. Is the agent willing to put out all that extra time and energy for just $150?

There’s one way to find out: measure the difference between the sales data for houses that belong to real estate agents themselves and the houses they sold on behalf of clients. Using the information from those 100,000 Chicago homes, and controlling for any number of variables - location, age and quality of the house, aesthetics, and so on - it turns out an agent keeps her own home on the market an average of 10 days longer and sells it for an extra 3-plus percent, or $10,000 on a $300,000 house. When she sells her own house, an agent holds out for the best offer; when she sells yours, she pushes you to take the first decent offer that comes along. Like a stockbroker churning commissions, she wants to make deals and make them fast. Why not? Her share of a better offer - $150 - is too puny an incentive to encourage her to do otherwise. So her job is to convince you that a $300,000 offer is in fact very good, even generous, and one that only a fool would refuse.

This can be tricky. The agent doesn’t want to come right out and call you a fool. So she merely implies it - perhaps by telling you about the bigger, nicer, newer house down the block that has sat unsold for six months. This is the agent’s main weapon: the conversion of information into fear. Consider this true story, related by John Donohue, a law professor who in 2001 was teaching at Stanford University: “I was just about to buy a house on the Stanford campus, and the seller’s agent kept telling me what a good deal I was getting because the market was about to zoom. As soon as I signed the purchase contract, he asked me if I would need an agent to sell my previous Stanford house. I told him that I would probably try to sell without an agent, and he replied, ‘John, that might work under normal conditions, but with the market tanking now, you really need the help of a broker.’”

In five minutes, a zooming market tanked. Such are the marvels that can be conjured by an agent in search of the next deal.

So a big part of a real estate agent’s job is to persuade the homeowner to sell for less than he would like while at the same time letting potential buyers know that a house can be bought for less than its listing price. To be sure, there are more subtle means of conveying this information than blatantly telling the buyer to bid low. The Chicago study also reveals how agents exert influence through the listings they write. A phrase like “well maintained,” for instance, is full of meaning to an agent - the house is old but not quite falling down. A savvy buyer will know this (or find out once he sees the place), but to the retiree who is selling the house, “well maintained” might sound like a compliment, which is just what the agent intends.

An analysis of the language used in real estate ads shows that certain words are powerfully correlated with the final sale price of a house. This doesn’t necessarily mean that labeling a house “well maintained” causes it to sell for less than an equivalent house. It does, however, indicate that when an agent labels a house “well maintained,” she is subtly encouraging a buyer to bid low.

So consider the terms in the box on the previous page: A “fantastic” house is surely fantastic enough to warrant a high price, right? What about a “charming” and “spacious” home in a “great neighborhood!”? No, no, no, no, and no.

In fact, the terms that correlate with a higher sales price are physical descriptions of the home itself: granite, Corian, and maple. As information goes, such terms are specific and straightforward - and therefore pretty useful. If you like granite, you might like the house; but even if you don’t, “granite” certainly doesn’t connote a fixer-upper. Nor does “gourmet” or “state-of-the-art,” both of which seem to tell a buyer that a house is, on some level, fantastic.

“Fantastic,” meanwhile, is a dangerously ambiguous adjective, as is “charming.” These words, it turns out, are real estate agent code for a house that doesn’t have many specific attributes worth describing. “Spacious” homes, meanwhile, are often decrepit or impractical. “Great neighborhood” signals to a buyer that, well, this house isn’t very nice but others nearby may be. And an exclamation point in a real estate ad is bad news for sure, a bid to paper over real shortcomings with false enthusiasm.

If you study an ad for a real estate agent’s own home, meanwhile, you see that she emphasizes descriptive terms (especially “new,” “granite,” “maple,” and “move-in condition”) and avoids empty adjectives (including “wonderful,” “immaculate,” and the telltale “!”). She patiently waits for the best buyer to come along. She might tell this buyer about a house nearby that just sold for $25,000 above the asking price, or another house that is the subject of a bidding war. She is careful to exercise every advantage of the information asymmetry she enjoys.

But even the agent’s advantage has been eroded by the Internet. After all, anyone can now get online and gather information about sales trends and housing inventory and mortgage-rate tremors. And recent sales data is starting to show the results. Agents still get a higher price for their own homes than for comparable homes owned by their clients - but since the proliferation of real estate Web sites, the gap between the two prices has shrunk by a third. The information has been set loose.

Adapted from Freakonomics: A Rogue Economist Explores the Hidden Side of Everything, copyright ? Steven D. Levitt and Stephen J. Dubner, published by William Morrow. Levitt is an economist at the University of Chicago. Dubner is an author and journalist.

A BIG thank you to all those who helped out in the ad production today. YY, Mike, Pang Ren, Shaun, Sara, Denise and Justin! You guys are awesome! We really really appreciate it!

The tech team is going to start working on RentSpace at the end of the week… So many people have been asking me about it.. Sorry for the delay, but we’re tied up putting some final usability tweaks to HomeSpace. That should be done by the end of this week, and then an alpha version of RentSpace should be out by the following week.

We’re working on some cool features and are looking for talented software engineers who love what we’re doing and want to be part of the team. Drop a mail to vinod at homespace.sg and I’ll be in touch. 

I was once again chillin’ out with my advertising guru friend over beers and somehow (as always), we started talking about Mediacorp’s questionable strategy of spreading the Mocca brand.

 ”What the hell were they thinking?” was my approach to the matter and loving to play devil’s advocate, he pointed out that like it or not, their “all-out” advertising campaign was a huge success. Why so?

Let’s face it. Within a month from its launch, almost every Singaporean has come to know of Mocca.com. People either talk about it or shoot spoof videos of the muscle dude and post them on YouTube (go check them out). In a nutshell, top-of-mind recall was emminent and perhaps that was Mediacorp’s number one objective.

The flip side of the argument however, is that people don’t always talk about or remember Mocca.com in a positive way. No doubt there is top-of-mind recall, but what is the point of that if they don’t recall anything great about it? Countless forums speak of its bad marketing and countless people take a piss out of its silly ad concepts.

Mocca’s tv ads have also been focusing heavily on its video embedding capability. Visiting the website however shows no such ads that have embedded videos of ordinary folks advertising their wares. Is the market not ready for this feature? Did Mediacorp play too many cards at one shot too soon?

Perhaps the 1o min video in “The Ries Report” (http://www.riesreport.com/index.php?month=10) is enough to illustrate where Mediacorp went wrong in their marketing strategy. Al Ries (marketing guru) elaborates on the difference between a commonly used ”big-bang” approach versus a “slow build up” approach, and why waiting for the right time (tipping point) to advertise “all-out” will yield a much greater ROI.

Our conclusion: Mediacorp doesn’t have a baaaaaad product (though we love saying it). The only thing that was reeeeeeally bad was their timing. The moment Mocca.com was launched, they almost immediately blasted the whole Singapore 24/7 with advertisments that have only served to set expectations way high. When people went to the website and realized that “it ain’t that great”, credibilty fell. And everyone knows that when a new product emerges in the market and loses credibility from day one, it’s going to take a miracle to gain it back.

What they could have done was to simply sell the fact that people can now turn to an online classifieds platform as opposed to the traditional newspaper classifieds. That capability already sells itself. Afterwhich, they can then focus on selling their search function which should really be their back-bone core feature because the truth is, searching for an item over the newspaper classifieds really just sucks.

When they start to win over early adopters and the early majority (hence stabalizing their initial user-base), they can then execute their “all-out-blast-the-whole-Singapore” advertising approach, not just because they have the easy means to, but because by then, they would have had a more solid product and a stronger user-base to back up their claims. And over time, when the masses have further grown to accept and approve the website, market the video embedding feature, which by then, should result in a higher acceptance and adoption rate.

But with all that has been said and done, alas…it might already be too late for them…

We’ll see…

SINGAPORE, 28 Oct 07 – The Real Group launched HomeSpace.sg today, a powerful yet easy-to-use real estate search engine that effectively bridges buyer and seller in today’s hot property market. HomeSpace empowers sellers to easily post fuss-free listings via a simple online input in under 20 seconds. The platform, using only the home’s zip code, automatically populates the listing with the rest of the necessary information and maps it onto Google maps using its “SmartPins” technology which displays locational details for each property such as nearby schools, MRT stations and shopping malls.

While the proliferation of Internet use is notably high in Singapore, most users do not fully utilize its power in the real estate marketplace. “Sellers are usually mobile and away from their computers for most part of the day,” noted Vinod Nair, Chief Executive Officer of The Real Group. “How we’ve addressed this is to instantly deliver qualified property leads straight to them via SMS, making it remarkably convenient for them to contact buyers for their property while remaining mobile.”

“Creating a listing has never been easier. We have cut the time and effort needed to create one by over 80%,” said Timothy Kua, Director of Marketing. “All we really need are what we like to call ‘ZAP’ - Zip code, floor Area and Price - to put up a quality listing for you that is automatically furnished with road name, facilities if it’s a condo, nearby amenities like schools and malls and even the distance from these places. Gone are the days when every detail needs to be painfully filled out; now buyers can see almost everything you have to offer in just three easy steps. Of course, sellers can also add additional information such as the number of rooms and photographs just as easily on the website.”

HomeSpace strives to increase the value proposition to home-seekers looking for the best home within their budget. Vinod explained: “Buyers will appreciate the notably cleaner and uncluttered interface that is rid of irrelevant links and advertisements which are usually found engulfing other real estate websites. With our slick user-interface, wicked search technology and ‘Google-powered’ mapping system, we believe that HomeSpace will provide a user-experience so positive that buyers will repeatedly visit our website to conduct their home searches and also refer HomeSpace to their friends and family.”

As part of their launch promotion, HomeSpace is giving away 10 qualified leads for free per signup.

Visit www.homespace.sg today!

Going to be presenting to a few VC’s as well these coming weeks… Things are getting exciting… We’re a few days away from our beta launch! Woo Hoo! We’re also looking into the possiblity of hiring interns soon. So if anyone reading this is interested in developing really cool facebook apps or working on some really cool technology, lemme know!

Me and the tech team have been staying overnight at the office for the past few days to meet the requirements for the launch. Staelen looks zombified from the lack of proper sleep for the past 2 days… We’re just working really hard to bring the best damn product possible. Possibly even rivalling US sites… The Biz team and myself have been prepping for a couple of presentations we have lined up next week, which hopefully land us some funding so that we can market this

We’re definitely going to be one of the first few companies in the world to launch a full frontal assault youtube marketing campaign. I met a bunch of really cool and talented animation and film guys from NTU and we’re gonna be working with them to produce a series of hilarious viral video adn print ads. You can look forward to that sometime in November.  In the mean time, if you have any feedback or comments reply to this post and I’ll get back to you as soon as I can