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South Africa’s Flow gets funding to automate social media advertising for real estate agencies

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The process used by millions of agents and thousands of property portals globally to reach buyers and sellers on digital channels is highly fragmented. And it’s evident that proptech, unlike other industries, has lagged in utilizing social media to make sales.

South African startup Flow wants to change how real estate agencies,  developers and agents interact with their end customers. With its APIs, Flow connects to the websites of estate agencies and property developers and automates advertising for them on social media channels like Instagram and Facebook. The proptech marketing platform is announcing that it has raised $4.5 million in pre-Series A funding.

Flow intends to use the funding to include other social media platforms such as TikTok and LinkedIn and other advertising channels like digital out-of-home billboards. The investment will see co-founders and co-CEOs Gil Sperling and Daniel Levy drive the business’s B2B growth strategy and integrate Flow’s social media–driven real estate marketing platform into existing international property portals and CRM platforms.

Sperling and Levy founded Flow in 2018 as an app that rewards tenants for early rent payments. However, before Flow, both founders previously built an adtech and performance marketing company, Popimedia, which was the largest buyer of Facebook media inventory in Africa for some of the world’s biggest brands. While they sold the business to global communications group Publicis in 2015, it was some of the knowledge gained while running Popimedia that they drew on to pivot Flow into its current business model three years later.

“With our first adtech business, we never dealt with real estate or property as we could never really service them in this country [South Africa]. And the biggest problem was that as much as real estate is the biggest asset class in the world and very valuable vertical, it is the least innovated around because it’s just highly fragmented,” Sperling told TechCrunch on a call.

“When buying and selling homes, if you take South Africa, for example, 40,000 agents are marketing 300,000 listings at any time. Every agent is essentially a little small business because they’re commissioners, and there’s no way that they can afford to each have a marketing, data science department, and design department like big businesses can, and that is one reason why we couldn’t conduct ads or performance marketing for many of them.”

With Flow, the founders want real estate agencies and property developers they couldn’t reach with their former startup to connect with customers on digital channels. The proptech startup automates the marketing for real estate agents for developers and works hand-in-hand with real estate websites to pull listings and automatically create ads on Facebook, Instagram and other digital channels.

According to Flow, its proptech marketing platform improves revenue for agents and experiences for property buyers and sellers. On the other hand, Levy points out that the startup makes money when these agents use its SaaS platform and via a percentage cut from their marketing spend. He added that revenue has been growing 20% month-on-month within the past year.

“Our route to market, for the most bit, has been going door-to-door from franchisor to franchisee to different offices within that group. And over the last couple of months, we’ve identified the enterprise channel, as we call it, which is more associated with strapping on our technology to portals,” stated the co-CEO. “So our next phase of traction and growth will come from those relationships, which are significant in our world. And that’s why we’ve just gone through this capital raise to experiment with that essentially.”

Flow currently has over 300+ clients using its platform — a client being a real estate agency or developer where each office has about 15 to 20 smaller agents. So more broadly, Flow is used by nearly 6,000 agents across South Africa, Namibia, Botswana, Mauritius and Australia. It is in talks with partners, mainly property portals and CRM platforms, to expand into Europe (France, Germany, Belgium and the U.K.) where it’ll face stiffer competition — which the co-founders hope Flow will edge out with its technology and attention to design — but a more extensive market base.

Futuregrowth Asset Management led Flow’s pre-Series A round with $2 million. Endeavor Harvest Fund and serial entrepreneur Steven Heilbron participated, while existing investors Kalon Venture Partners, Vunani Fintech Fund and Buffet Investments also doubled down.

“We’ve keenly followed Flow’s progress in South Africa and Australia and integration into the B2B side of the global property industry as the next natural step in the company’s evolution,” says Futuregrowth Asset Management head of Private Equity and Venture Capital, Amrish Narrandes, on the investment. “We share Daniel and Gil’s vision to bring the property industry into the 21st century and know they have the expertise and experience to make it happen — and we’re pleased to be able to be part of a South African company taking bold steps that will bring much-needed change to an essential global industry.”

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Former B.C. Realtor has licence cancelled, $130K in penalties for role in mortgage fraud

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The provincial regulator responsible for policing B.C.’s real estate industry has ordered a former Realtor to pay $130,000 and cancelled her licence after determining that she committed a variety of professional misconduct.

Rashin Rohani surrendered her licence in December 2023, but the BC Financial Services Authority’s chief hearing officer Andrew Pendray determined that it should nevertheless be cancelled as a signal to other licensees that “repetitive participation in deceptive schemes” will result in “significant” punishment.

He also ordered her to pay a $40,000 administrative penalty and $90,000 in enforcement expenses. Pendray explained his rationale for the penalties in a sanctions decision issued on May 17. The decision was published on the BCFSA website Wednesday.

Rohani’s misconduct occurred over a period of several years, and came in two distinct flavours, according to the decision.

Pendray found she had submitted mortgage applications for five different properties that she either owned or was purchasing, providing falsified income information on each one.

Each of these applications was submitted using a person referred to in the decision as “Individual 1” as a mortgage broker. Individual 1 was not a registered mortgage broker and – by the later applications – Rohani either knew or ought to have known this was the case, according to the decision.

All of that constituted “conduct unbecoming” under B.C.’s Real Estate Services Act, Pendray concluded.

Separately, Rohani also referred six clients to Individual 1 when she knew or ought to have known he wasn’t a registered mortgage broker, and she received or anticipated receiving a referral fee from Individual 1 for doing so, according to the decision. Rohani did not disclose this financial interest in the referrals to her clients.

Pendray found all of that to constitute professional misconduct under the act.

‘Deceptive’ scheme

The penalties the chief hearing officer chose to impose for this behaviour were less severe than those sought by the BCFSA in the case, but more significant than those Rohani argued she should face.

Rohani submitted that the appropriate penalty for her conduct would be a six-month licence suspension or a $15,000 discipline penalty, plus $20,000 in enforcement expenses.

For its part, the BCFSA asked Pendray to cancel Rohani’s licence and impose a $100,000 discipline penalty plus more than $116,000 in enforcement expenses.

Pendray’s ultimate decision to cancel the licence and impose penalties and expenses totalling $130,000 reflected his assessment of the severity of Rohani’s misconduct.

Unlike other cases referenced by the parties in their submissions, Rohani’s misconduct was not limited to a single transaction involving falsified documents or a series of such transactions during a brief period of time, according to the decision.

“Rather, in this case Ms. Rohani repetitively, over the course of a number of years, elected to personally participate in a deceptive mortgage application scheme for her own benefit, and subsequently, arranged for her clients to participate in the same deceptive mortgage application scheme,” the decision reads.

Pendray further noted that, although Rohani had been licensed for “a significant period of time,” she had only completed a small handful of transactions, according to records from her brokerage.

There were just six transactions on which her brokerage recorded earnings for her between December 2015 and February 2020, according to the decision. Of those six, four were transactions that were found to have involved misconduct or conduct unbecoming.

“In sum, Ms. Rohani’s minimal participation in the real estate industry as a licensee has, for the majority of that minimal participation, involved her engaging in conduct unbecoming involving deceptive practices and professional misconduct,” the decision reads.

According to the decision, Rohani must pay the $40,000 discipline penalty within 90 days of the date it was issued.

 

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Should you wait to buy or sell your home?

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The Bank of Canada is expected to announce its key interest rate decision in less than two weeks. Last month, the bank lowered its key interest rate to 4.7 per cent, marking its first rate cut since March 2020.

CTV Morning Live asked Jason Pilon, broker of Record Pilon Group, whether now is the right time to buy or sell your home.

When it comes to the next interest rate announcement, Pilon says the bank might either lower it further, or just keep it as is.

“The best case scenario we’re seeing is obviously a quarter point. I think more just because of the job numbers that just came out, I think more people are just leading on the fact that they probably just gonna do it in September,” he said. “Either way, what we saw in June, didn’t make a big difference.”

Here are the pros of buying/ selling now:

Pilon suggests locking in the rate right now, if you don’t want to take a risk with interest rates going up in the future.

He says the environment is more predictable right now, noting that the home values are transparent, which is one of the benefits for home sellers.

“Do you want to risk looking at what that looks like down the road? Or do you want to have the comfort in knowing what your house is worth right now?” Pilon said.

And when it comes to buyers, he notes, the competition is not so fierce right now, noting that there are options to choose from.

“You’re in the driver seat right now,” he said while noting the benefits for buyers.

Here are the cons of buying/ selling now:

He says one of the cons would be locking in the rate right now, then seeing a rate cut in the future.

The competition could potentially become fierce, if the bank decides to cut the rate further more, he explained.

He notes that if that happens, the housing crisis will become even worse, as Canada is still dealing with low housing inventory.

An increase in competition would increase the prices of houses, he adds.

Selling or buying too quickly isn’t the best practice, he notes, suggesting that you should take your time and put some thought into it.

Despite all the pros and cons, Pilon says, real estate remains a good investment.

According to the latest Royal LePage House Price Survey for the second quarter of this year, the average home price in Canada is $824,300. That’s up 1.9 per cent from the same time last year, and up 1.5 per cent from the first quarter of 2024.

In the Ottawa Housing Market Report for June 2024, the average price of a home was up 2.4 per cent from this time last year to $686,535, but down 0.6 per cent from May 2024.

Experts believe many potential buyers are still hesitant of jumping into the housing market and waiting for another interest rate cut of 50 to 100 basis points.

“I don’t think it’s going to be the rush that we see in the past, because people are used to more of a conservative approach right now,” said Curtis Fillier, president of the Ottawa Real Estate Board. “I think there’s still a bit of a hold back, but I definitely do think with another rate cut, we’ll probably see a very positive fall market.”

With files from CTV News Ottawa’s Kimberly Fowler

 

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Real estate stocks soar to best day of year on rate cut bets

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(Bloomberg) — The stock market’s worst group notched its best day of the year as a cooler-than-expected inflation report stoked bets that the Federal Reserve will start cutting interest rates in September.

Shares of real estate companies jumped 2.7% Thursday for their biggest gain of 2024, climbing to their highest level since March as investors snapped up homebuilder, digital and commercial real estate stocks alike. Real estate also was the best-performing group in the S&P 500 Index Thursday, with volume that was around 30% higher than the 30-day average, according to data compiled by Bloomberg.

Arguably the most significant news to come from the latest consumer price index reading was a pullback in housing-related inflation. Shelter costs rose just 0.2% for the slowest monthly increase in three years. Homebuilders, which have risen 7.1% this year, were up 7.3% for the session, the most since 2022. Shares of D.R. Horton Inc., which is scheduled to report earnings next Thursday, gained 7.3%.

“Housing has really been the last shoe to drop in terms of winning the battle against high inflation,” Preston Caldwell, chief U.S. economist at Morningstar wrote in a note to clients Thursday. “Leading-edge data has strongly indicated for some time now that a fall in housing inflation was in the works.”

A rally in real estate stocks is bad news for short sellers who have been piling into the group, which is the worst performer in the S&P 500 this year. To start the week, short interest as a percentage of float hovered near 49% in the SPDR Homebuilders ETF, the highest level since February for the exchange-traded fund, according to data from S3 Partners.

Property owners are rallying as well. Real estate investment trusts, which were brutally penalized during the two-year run up in borrowing costs, advanced by as much as 3%. And the outlook for the group appears to have turned a corner, according Rich Hill, senior vice president and head of real estate strategy and research at Cohen & Steers Capital Management.

“We think this is a compelling backdrop for listed REITs especially as fundamental growth remains on solid footing,” he said, referencing the latest inflation data and rate outlook. “The rally that started in October of 2023 pushing returns more than 20% above their trough looks set to continue if inflation cools and interest rates continue to decline.”

Shares of industrial REIT Prologis Inc., which reports second-quarter results on Wednesday, rose 3.3% to hit their highest level since April. U.S. Treasury yields tumbled, with the 10-year bond falling to 4.2% and the policy-sensitive two-year note slipping to 4.5%.

(Updates indexes and stock prices for market close.)

 

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