This London online property agent is using group buying power to disrupt how flats are sold to overseas investors

London-based online property agency Dot Residential is seeking to disrupt the traditional British agent model by offering to negotiate directly with developers for group discounts on behalf of overseas investors.
The online realtor is brokering commission free sales of properties in Manchester, Birmingham, Liverpool and Leeds featuring guaranteed mortgages and three -year fixed rental income.
“At Dot we work with leading lawyers, accountants, financiers, builders and manufacturers on our investors’ behalf, negotiating wholesale pricing and service-level agreements,” said Gray Stern, chief executive and co-founder at Dot Residential.
An example was the renovated 12-unit Dot Spectrum in Manchester offered for £350 (US$431.67) per square foot, 12.5 per cent lower than similar properties in the market, according to Stern.
"For new builds, we look to negotiate a discount for bulk purchase, whether a small block of apartments or multiple units within a larger development," said Stern. "This discount varies depending on how motivated the vendor is, but the goal is to offer our investors a better deal than they can get individually so it's a bit like group buying."
"The vendor will entertain the discount and absorb this cost because it [means] less time, administration and marketing expenses, and in some cases more sales or presales can materially improve their funding or holding costs," he said. "We can generally negotiate prices from our partner suppliers down. We pass on some of this saving to the investor and some of it is retained for managing the process."
Gray Stern, chief executive and co-founder at Dot Residential. Photo: Handout
He said target investors are generally busy professionals who don't have the time to manage their UK property assets.
Investors are charged 10 per cent of rental income as an ongoing fee for managing the properties.
Most investors are from the Middle East and Asia, Stern said.
"At the moment our cheapest unit is £140,000, which you can own for around £54,000, including stamp duty and fees," he said. "You do not need to meet any credit criteria to qualify for our mortgage."
He said the model could help reduce the opportunity cost for investors in "spending months sourcing [property], analysing and transacting".
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