Proptech Firm GPARENCY Offers to Trade Credits for Property Listings

Proptech firm GPARENCY seems to have established a modus operandi of offering financial benefits to customers who partake of the company’s services.

The company had moved its business from a traditional go-between to connect borrowers and lenders to a membership mechanism with flat-fee pricing. Then, last year, it added what it called “match to lender,” a software system that allows CRE borrowers “to search by loan and property type to access every single loan lender in their state.” Non-member borrowers see only lenders that are GPARENCY partners while members will still see the full listings.

In the latest development, the company offers credits toward site membership “in exchange for property data submitted to the Digital Marketplace directory, including new listings, updates, and corrections,” a company press release says.

In addition to discounts on the membership, property owners submitting data “will be able to close any and all of their deals for no more than $11,000.”

“In contrast to other digital property listing services, we have always marketed for-sale assets free of charge,” says company founder and CEO Ira Zlotowitz. “But with the CREdits program, we can additionally reward these property owners with a discounted pathway to membership on our platform. They not only have the benefit of national exposure but will receive monetized credits, along with a free trial providing access to dozens of new investment and financing opportunities.”

As with any marketplace type system, one issue is what is called network effects. As Wharton Online explains: “The network effect is a business principle that illustrates the idea that when more people use a product or service, its value increases. The network effect significantly applies to digital platforms, dating all the way back to the internet itself. When the internet became more widely used, more people relied on it to conduct work, deepen personal connections, and for research and other functions.”

However, network effects are only one aspect because the concept can stimulate the false idea that more is necessarily better. For example, running an ad before 500,000 people might seem clearly advantageous to one appearing before 5,000. However, if only 0.5% of the first group is in the target market, that would be an effective market of 2,500, compared to the all of the targeted, a two-fold difference.

The company does claim to offer such things as a free directory of 47,321 [from its website] national listings that are regularly updated, more than 400,000 sales and finance comps, relevant public data, and updates on the “best lender rates and terms” out of 3,000 listed lenders.