Vendor Conditioning - how real is it and what does it mean?

I have been delighted by the response to the series of articles I wrote detailing the personal process of selling our house. I have now edited the individual articles into an e-book which is available to download for free, so hopefully people can read and share freely. It has been interesting to hear comments people have made to the articles. It is very interesting to me to hear these comments realise that a lot of people did not have a clear idea as to the many parts of the process.

Naturally not all comments have been enthusiastically supportive. This does not surprise me, and to be honest I am always glad to have challenging comments raised. The debate and interchange is a vital part of the exercise, I think it adds hugely to the overall value of articles as a validation process.

One particular commenter of the final article was forthright, he challenged me to the extent of believing I was gullible and should not have been so naive. He described a part of the process, which he referred to as vendor conditioning. The process whereby agents “manage” the vendor expectation so as to ensure that the agents objective of a sale are achieved irrespective of the outcome for the vendor. In effect fundamentally challenging the very principle that the agent is working for the best outcome of the vendor. I know it is subtle, but it is an important distinction.

He stated that in our case when our agent provided what I judged to be incredibly valuable insight into the prospective buyers, our agent was in reality manipulating the facts, he was, he proposed  choosing to be selective in the feedback he gave us - choosing to only share with us the buyer feedback that downplayed the value expectation and thereby kept from us the more aspirational feedback which might have indicated that our property was worth more than he as the agent had originally indicated.

The logic he put forward was to ensure that we set a lower reserve at the auction, so that firstly the property would sell ‘under the hammer’ and secondly that the sale price would be above this ‘conditioned’ expectation and therefore he, the agent would look to have over delivered. This is a very interesting comment and supposition. I can clearly see the potential for this to happen and in fact I can find no way of refuting it as a generalised rule. I can however categorically state that in our situation the original assessment we had made of the market value of our property baed on my knowledge and experience even before we engaged with the agent was very close to the final sale price we achieved. Further the final sale price was at a level that I would describe as “a very nice price”, as opposed to at one extreme “OK” and at the other extreme “highly delighted”.

So whilst I would defend my comments and defend our chosen agent and state that we were not the victims of vendor conditioning, I am left with a view that this is a real possibility. It therefore leads one to ask the question - how do you establish objectivity in the process of selling your house, and thereby avoid conditioning?

The simplest answer is to get a professional independent valuation of your property before you engage an agent. I personally think that too much of the focus of the engagement of an agent is based on the ‘appraisal’ of the property. That too often, the choice of agent is based on the agent who provides the highest appraisal. This is so wrong. The real danger in choosing the agent with the highest appraisal is that they might well be appraising a higher valuation simply to “win the listing”. The hard truth is that no matter what any agent thinks your house is worth you will only get for it on the day of sale what someone is prepared to pay for it. The agent is there certainly to maximise the price, however that skill is not related to their skills as an appraiser so the choice of agent should be the one who is the most consummate at negotiating, the best at marketing and the best at facilitating the buyers to ensure the property generates the maximum number of prospective buyers.

Property musings on Facebook - 3 October

Here are the articles posted on Facebook over the past week - short, spontaneous insights and observations which I felt needed immediate discussion and didn't warrant long-form articles written.

Auction success is a hot topic again - however it depends how you calculate them

New challengers emerge to take on Realestate.co.nz & Trade Me Property (Updated)

There is an expression I always find amusing - "you wait for what seems like an eternity for a bus and guess what two turn up together"!

Well it seems for no particular reason we are experiencing this with real estate websites. For years it was just Realestate.co.nz and Trade Me Property. Not since AllRealestate exited the market in 2008 have we seen a credible competitor to the two incumbents of this digital marketing space. 

Not one but two new residential property websites and one specialist commercial property websites have appeared in the past month and I thought it would be of value to examine these new entrants and evaluate the likelihood of any of them toppling the incumbents.

The new residential websites are Property.co.nz and Rentorsell.co.nz and for commercial property and businesses for sale True Commercial.  

In my mind there are a few critical components required for a property website to be a viable competitor to challenge the incumbents. These are (1) Content (2) User Experience and (3) Brand presence, so let’s see how these 3 sites stack up.


Property.co.nz

This website seems to be dominated by listings from LJ Hooker and First National - collectively it hosts just under 5,000 listings of property for sale and 270 listings of rental property. This is a very small component of the 38,000 properties for sale and 10,000 for rent across the country. Without comprehensive content then there is little to recommend the site.

The site offers nothing in the way of functionally save for what might be thought of as the very basic search. The site looks like a vanilla “out of the box” website that displays listing and nothing more. Clean it may be, but functionality wise it is a pale imitation of the leading sites.

In terms of brand presence, certainly the domain name is impressive - this would have to be one of the first and most sought-after real estate domain names. It was originally registered in 1997. However domain names and websites that are generic to the category I think are a double-edged sword as I can attest to with Realestate.co.nz - you are instantly relevant in the context of the domain name but when marketing the brand is a mouthful as you have to add the ‘dot co dot nz’ to explain what it its - compare that with Trade Me!

Overall I would judge this site to have done a good job of selling the idea to LJ Hooker and First National to get their listings, but a poor job in executing a website. I would also have to question seriously what they claim to be significant engagement through social media. Their site states that they have over 7,000 Likes on Facebook, over 400 on Google+ and over 800 shares on Twitter! The facts are that their Facebook page has 20 Likes!



RentorSell.co.nz 

This website has a long way to go in regard to the content, as of today they have 10 listings of which 1 is rental. Now to be fair they only launched today so maybe we should hold off to see how they go in the coming weeks.  

When it comes to user experience I have to commend this team which is based in Queenstown. They have built a very appealing site in terms of design, very clean, focused on images and with clear details about properties. The image sizes are huge and allow full-screen presentation which can make a very basic house look great. Not only is the design to be applauded they have implemented unique functionality in their compare feature which allows for the side-by-side comparison of your saved properties.

When it comes to brand name I have to hold my head in my hands! - Rent or Sell. It has to be the most unmemorable name - it is devoid of personality and whilst it is contextual I can see why it was easy to acquire - the domain name was only registered in July this year. It would have been better to call it zwango.co.nz at least that is memorable (and you can buy it for $20 today!).

Overall I think they have the right approach to design but their future relies on hard work to get content. My advice would be go and see LJ Hooker and First National as they seem keen to support new sites with content. I would also caution them to be honest when it comes to content. On their home page they have what they title "Client Testimonials" I think these may have been ideas that they threw on a test site - they have nothing to do with their business and I would have to suggest are works of fiction.

(Updated)

I am grateful to an eagle-eyed reader who spotted this website from the US (WPResidence) which is identical to RentorSell - clearly showing that this is a templated 'out of the box' website designed for property. I must say that in my view it is a good design and when stacked up against the leading incumbents in the NZ market clearly shows how far this category has developed and how little we have seen in innovation and user design in the NZ market - it is long overdue!


True Commercial

This new site is very different from the other two in that it is not an entrepreneurial start-up built with investor money and life savings. This is a site built with the muscle of APN (soon to be renamed NZME) - publisher of The New Zealand Herald. In terms of content the site is well developed having close to half the full complement of listings on the market. This is not surprising for the Weekend Herald print supplement has for years been the primary marketing medium for commercial real estate and thereby provided the necessary existing relationship with the real estate companies.

In terms of user experience the site could not be more of a disappointment - it is clean in terms of design which is something that cannot be said for Realestate.co.nz’s Prime Commercial or Trade Me Property, but largely the cleanness is the result of limited functionality and sparse content. There is nothing new, and in someway the site has the feel just as Property.co.nz’s has of being an ‘out of the box’ solution. The site does have far a good selection of commentary and articles around the commercial property industry but that should only to be expected from a publisher of this scale. A pet hate I have of the site is the need to click a button to reveal a telephone number for an agent - why? - just so they can say to agents, we had 2 people click to find your number!

As for brand awareness, well here we have the compete antithesis to the aspiring residential sites because APN has leveraged their print and digital muscle to promote this site. They have renamed their weekly property supplement and advertise the site extensively on the NZ Herald website - that is a lot of advertising impact. As for brand name - a good domain name combining contextual relevance and a memorable name. 

Overall I am disappointed in this site. The Herald should have been developing this solution in 2005 when the digital market place really took off. They might have possibly waited for the collapse of Sella in 2012 to make way for a dedicated site. All of which demonstrates a missed opportunity of massive proportion not just because the industry has been spending millions to support Trade Me Property and Realestate.co.nz over the years but in having a leading site they could have managed the natural migration of print to digital and in bundling a package of print and online advertising solutions they could have achieved leadership. I just don’t see this site being a real challenger or real threat to the incumbents despite the muscle APN could leverage and the pot of gold they could secure. They would really need to better understand their customers and the unique needs of the market to deliver this result and build a compelling site.


 

So in summary all of these 3 new sites are in my view doomed. Good intentions, good ambition and some small pieces of innovation. However the real reason why none of these will ever succeed is not for what I have written so far in this article, but from the single fact that none of them have a mobile app.

 

If I was to start a new digital property platform today in NZ I might well forego the web and launch purely as a mobile app! Real estate is a mobile experience and to not have an app is to miss the point and to show a complete lack of appreciation of the needs of the market.

Property musing on Facebook - 26 September

Here are the articles posted on Facebook over the past week - short, spontaneous insights and observations which I felt needed immediate discussion and didn't warrant long-form articles written.


Valuable advice for anyone thinking about buying off the plans

Real estate advertising - classic snake oil tactics

I have to declare a bias here and be upfront. I am not a fan of property schemes; training courses that perpetuate the idea that property is the answer to a financially secure future, a way to make a million or any other scheme that whilst trying to sell a money making venture that is really just trying to ‘sell’ a property. Let’s face it property developers are not interested in your retirement or mine for that matter, nor are the agents who act for them. I say that not to demean them. It is just that the marketing tactics that they employ, to my way of thinking are not much better than those of a snake oil salesperson.

Sadly we all became far too aware of such schemes in the last decade as we saw the collapse of the high profile finance companies and I would have hoped that we could have learnt from that period and tried to approach these property developments in a more transparent and professional manner this time around as our major city seeks to expand upwards and create apartment living in every corner.

So with this inherent bias I was flabbergasted by an advert in the Weekend Herald last week. Leaping out from the small advert was a picture of Albert Einstein - one of the luminaries of modern times - what could he be doing involved in selling real estate I thought to myself?

 

The details as I was about to lean were buried in the advert - when you got to read it.

And here is where we come to the complaints I have for this advert. There are 3 major complaints and they are in some ways serious enough for a formal complaint to be made to the Real Estate Agents Authority and/or the Advertising Standards Authority.

  1. It is illegal to use an likeness of Albert Einstein without permission
  2. The advert is far too focused on hypothetical promotion of a money making scheme instead of being what it is - an advert for new apartment developments
  3. The audacity of the advertiser to try and squeeze all the regulatory small print into that tiny advert.

Albert Einstein is somewhat of an iconic individual of the 20th Century receiving as he did the Nobel Prize for Physics in 1921. He is best known for his mass-energy equivalence E=mc2. What then is his likeness doing on a real estate advert?

The advert purports that Einstein had a Rule of 72 - this is not factual and irrespective of that the Rule of 72 speaks to a shorthand way of assessing the time period required to double the value of a capital sum based on a simple interest rate. If you divide 72 by the interest rate (say 10%) then in this example you get a figure of 7.2 - which is the number of years required for a capital sum to double in value if the interest rate payable is 10% based on compound interest. The reality is that the statement in the advert that “in future years the property should be worth more, much more” is neither attributable to Einstein nor to the Rule of 72.

Lastly GreenLight, is the duly appointed exclusive licensing agent for the Hebrew University of Jerusalem, who hold the rights to all likenesses in any form of Albert Einstein and it is also authorized to vigorously pursue all unauthorised uses of Albert Einstein's creations, appellations, copyrights, right of publicity, photographs, trademarks and characterisations, and to prosecute and maintain trademark and copyright registrations on behalf of The Hebrew University of Jerusalem. So I would be very cautious about using any unauthorised images of anyone on any advert.


The advert is full of speculative assertions "A city residence can now be purchased with only $1,000 down and nothing to pay for 14 months" and similarly "After finance charges, you can have other people paying it off for you". Nowhere does it say which property and where and for how much and what type of property you might get. Nor as to the risks of buying an apartment and the potential issue of arranging finance or the problems of tenancy.

No it sells the snake oil of "make a few hundred dollars a week coming in as extra income in retirement" and of course the presumption of a "long term appreciating asset"


The advert needs to be seen in context - it measures just 150mm by 90mm 


And as for small print the advert manages to compress 230 words of legally required disclaimers into a space smaller than the headline - maginfying it as I have done below shows how bad this is:

In case you are interested this is what it says:

Disclaimer: Only available when purchasing an off the plan Urba or Queens Residences apartment and only apply where the Vendor accepts a Purchaser’s request for payment of the balance of the deposit (usually 10% of the purchase price) to be deferred until settlement, and the Purchaser enters into a Deferred Deposit Deed with the Vendor (if acceptance with clause 23 of the Agreement for Sale and Purchase) within 15 working days of signing the Agreement. At settlement the balance of the deposit together with the full purchase price must be paid. If the Vendor does not accept the Purchaser’s request for payment of the balance of the deposit to be deferred until settlement or, if the Purchaser elects to pay the balance of the despot by cash, the full deposit must be paid in cash in accordance with the terms of the Agreement. Capital and (not legible) values rise and fall according to market conditions, investing in property is a long term investment, not a get rich quick scheme for spectators. The information contained herein is not financial advice and should not be relied upon as such. Prior to signing any legal documents, such as contracts, you should seek independent advice. Every Precaution has been taken to establish the accuracy of the material herein at the time of printing, however no responsibility will be taken for any errors or omissions. 


In my view this advert does nothing for the professionalism of the real estate industry nor does it add any value to the properties that are endeavouring to be marketed or the agent acting as a sellers agent. It's shoddy and if I had the time I would like to take a complaint against the advertiser for the latter of the 3 issues at least - time will tell if they receive a complaint and financial penalty against the first issue!

Premium advertising of property needs smart design thinking

The parallels of online and offline advertising of property are clear. If you want to achieve impact then you need bigger adverts and bigger adverts cost more - this applies to a print magazine as it does to a website.

With print magazines you go from the basic 1/4 page to a 1/2 page to a full page to a double page spread to a cover page - each step more than doubling the cost until you in some cases blast through $5,000 for a single insertion.

Online you go from a standard listing to a feature listing to a super feature and in the future as likely as not a platinum super feature. Costs increase accordingly, although not to top even $1,000.

However my focus of thought and reflection at this time is not on cost but on design and user experience. I think the team at Trade Me Property need to ask themselves some serious questions. For whereas the property magazines design very consumable and appealing publications with inspiring double page spreads and cover adverts that draw you in to support these premium advertising solutions, the online world of Trade Me Property is becoming a jumble which is less likely to draw anyone in as it strives for more and more premium advertising.

I make these comments as I today I have discovered a new header advertising unit on the site.

"Best on the block" takes up the header section of the site and is appearing under all types of searches despite the property in question when you click through to the "Find out more" is actually in Christchurch.

Why would I be interested in a Christchurch property when I am searching in New Plymouth? As you can see the advert provides no location context so you have to link through to see the location only to discover as over 4,000 people have already done that it holds no relevance - adding up to what in my mind is a dumb piece of advertising.

Additionally this new block of advertising pushes down the former super feature to now place the real listings so far down the page that it takes a good action of the scroll wheel of a person's mouse to find a normal listing as the screen shot below shows.

If you then open up the map search in the header things get ridiculous - it is so far down the page that you have to scroll that you might well be forgiven for thinking that Trade Me Property was not interested in basic listings at all.

In my opinion Trade Me needs a major rethink as to design layout.

It needs to decide fundamentally if it is a general classified website where property listings and their attendant premium adverts are to be squeezed in where there is some space just as car adverts and listings and job adverts are pigeoned into the same structured architecture or if it is serious about the property space and create a new design and user experience as a serious real estate website portal. It needs to look at the best run site in the region that of Realestate.com.au in Australia to see how to lay out a website for maximum user experience matched to optimal premium advertising.



Property musings on Facebook - 19 September

Here are the articles posted on Facebook over the past week - short, spontaneous insights and observations which I felt needed immediate discussion and didn't warrant long-form articles written.

 

For property buyers Google remains invaluable

Property headlines continue to promulgate misinformation

Misinformation shutterstock_182720795.jpg

Too often over the past few months I have taken to Twitter or Facebook to express my frustration at the flippant manner in which newspapers (and as this is Auckland, NZ I can really only reference The New Zealand Herald) have created inflammatory stories related to property with no other intention that to create a eye-catching headline through which to succour eye-balls and through this to satisfy advertisers or to sell newspapers to again satisfy advertisers.

Just today the article reads "Frantic Auckland buyers rushing in to snap up homes"

Here is the conversation I started on Facebook on this topic promoted by the Herald article.

To often the response I generate from the online comments are typified by this one today “Never let the fact get in the way of a good story”.

Well I am not going to apologise for stating that I think, that when it comes to the property market and people’s largest investment and financial liability we should expect to see a more balanced and well researched insight into articles on the state of the property market from what the media likes to refer to as professional journalism, especially at a time when they seek to differentiate themselves from what they like to refer to when it suits them as bloggers.

We don't see eye-catching headlines which “never let the data get in the way of a good headline” when it comes to the NZX analysis of listed companies, yet the total value of NZ property ($725 billion) eclipses the NZX by a factor of 8 times so why should we accept it from articles on the property market?

At the core of the problem in my opinion is the fact that the real estate industry at all levels and all structures can’t seem to help itself in talking-up the market as if the industry itself was the oxygen of the market or that in someway they had to justify the performance of the market.

When was the last time you read an media article either from a real estate company, quoting a real estate company or even from the organisation representing the industry where they accepted that the market was down in sales volumes or price and was likely to stay that way for sometime to come? Too often these articles are full of justification - its because of the election...., there were more holiday this month......, the weather caused..... , a shortage of stock caused…., at this time of year sales always fall.

It is well known that real estate agents fair poorly in any rating of credibility or trust - the most recent poll had agents at 44th place out of 50 professions, rubbing shoulders with journalists (there might be the issue!) car salespeople and sex workers. When might this ever change? 

The reality is it will never change as long as the industry continues to believe that they must coat every piece of data in a very sickly dose of sugar coating. Don’t they realise that the public are more and more able to access insight and knowledge themselves and make objective assessments that leaves the industry looking somewhat like a fraud. As for the media and their complicit support. I have expressed concerns as to the potential for influence by the real estate companies who let’s not forget plough million of dollars into the coffers of media companies (the newspaper companies) every month and who directly or indirectly could believe that they therefore have some right to have their opinions and sugar coated perspective promoted.

Property, rightly or wrongly as we all know is our largest asset class in NZ - a vast number of people judge their wealth and financial stability upon their family house and the small investment portfolio of rental properties they own and manage. Largely as a function of this people still continue to be attracted to this investment strategy to “support retirement” and will unfortunately continue to be influenced by these type of media articles and property reports. Let’s recognise this and see if we cannot seek out some more balance in these articles, that’s all I ask.

Property musings on Facebook - 12 September

Here are the articles posted on Facebook over the past week - short, spontaneous insights and observations which I felt needed immediate discussion and didn't warrant long-form articles written.

Even in UK real estate agents disagree on property listings!


Realestate.co.nz invests in new commercials when they should be investing in the user

Realestate.co.nz this week unveiled its new TV commercial. It’s another execution is what has seen a barrage of advertising undertaken by the second places property portal in the past 12 months, as it has stepped up to compete more aggressively with Trade Me Property as it has weathered the wrath of backlash from it pricing model changes last October.

The new advert is funny which is a great attribute for TV advertising and reading some of the comments posted on Facebook, their followers seem to like it as well. Judge for yourself.

From a marketing perspective rather than a purely consumer perspective I have some concerns. I make these in an objective manner without bias to provide a perspective to the commentary I regularly make as to the competitive tension that exists between these two leading property portals in NZ. I have similarly made the same critical review of Trade Me Property TV advertising in the past.

This creative execution is built around the proposition of comprehensive content “The most homes in NZ”. This is the rational takeaway message that the campaign tries to convey. This message forms a part of the print media campaign and is in the voice-over of the TV commercial. However turn off the sound (which is always regarded as the acid test of TV commercials) and you are seeing the message “Realestate.co.nz Where property finds people” - a very different message and brand promise.

I have a problem with this campaign. We have a clever execution in print with the Monopoly theme - bit of humour and good instant contextual referencing. Then we have a different execution around hats - sure there is the great lyricwherever I lay my hat - that’s my home” but it feels somewhat of a stretch. Then there is the DIY execution which I do get (just) but when sharing it with friends at the weekend most didn’t. Some thought it was to do with The Block or was Mitre 10 now part of Realestate.co.nz?

I also find a disconnect between the campaign idea of most homes for sale - being about the greatest choice, best solution when looking for property and the tag line “Where property finds people”. I know it is play on “Where people find property” - but why not say that or better still use a line which failed the complaint raised by Trade Me Property to the ASA back in 2006The only place with everyplace” - although that would still fail today as Trade Me Property is the only pace to find private sales.

That brings me to the major problem. This campaign is vulnerable!  It could well be the case that given the revised pricing model announced by Trade Me Property in early August, the point of difference of “The most homes in NZ” will become null and void and once again Trade Me Property will claim ascendancy to the mantle of “The most homes in NZ” and these ads - the whole campaign in fact will have to be trashed.

Whilst “The most homes in NZ” has become a point of difference in the context of the competitive powerplay between Realestate.co.nz and Trade Me Property I also have to wonder if it actually has more relevance to real estate agents than to the average property searching buyer jn NZ. When they go to either portal they have no interest in the fact that Realestate.co.nz has 37,892 and Trade Me Property 31,369 nor that when searching in Tauranga there are 1,241 listings on Realestate.co.nz and 1,834 on Trade Me Property (oops looks like Trade Me has regained ascendancy there) - what people are really interested in, is what properties are on the market and for this they rely on email alerts - a process that provides no context to relative inventory as if inventory is relevant.

Let's be clear, in my mind Realestate.co.nz are smart to be investing in brand building and the results prove it - their traffic has grown faster than Trade Me Property and they have narrowed the gap from a factor of 4 to close to 2.5.

However brands are not about messages and facts, they are more around heart and minds. Brand loyalty and advocacy comes from memorable experiences and this is where some of the investment money should be being spent. Developing the user experience of the platform on both desktop and mobile. Adding killer features that are standard on property portals around the world that still allude both of these portals in NZ. These investments would be sustainable and drive brand switching which TV adverts can never do. TV adverts at best only stimulate trial. 

Reviewing agent performance - the transparency challenge in real estate

We live in a world fast becoming fixated by feedback mechanisms. I was reading a very amusing article over the weekend from the New York Times entitled “Ouch, My Personality, Reviewed” in which the author obsesses about how her ratings score on Uber is now 4.5 out of 5 and the nightmarish possibility that if it slips to 4.0 then she may not get any more Uber rides!

We seem to be moving from a world where we as consumers, sat on one side of the fence and endlessly filled out reviews about manufacturers and service providers on the other side of the fence, immune to the possibility that those service providers might rate us as consumers. It might just come to the possibility that instead of being told by the call centre recorded message that “this call may be monitored for training purposes” we hear “this call may be monitored to provide feedback as to your response to customer services” - such data being shared with other customer service centres thereby impacting your call-waiting time!

This expansion of customer reviews and ratings has become somewhat of a web 2.1 (whatever happened to web 2.0 and web 3.0??) phenomena - a feedback mechanism that is, we are told pivotable in influencing over 85% of purchases nowadays. It seems (and I know from my own experience) that we check reviews before we buy anything - we check the ratings of cafes and restaurants, hotels and even airline seats. We certainly would not watch a film or listen to music without the collective opinion of as wide an audience as possible. 

So where and how is this phenomena touching the real estate industry? Ask an agent and they will point you to their testimonials - those 14 perfectly manicured and edited references on their website - “from Mr & Mrs A of Blah Blah Street who could not speak more highly of Agent B for their commitment and professional service, how delighted they were to see their house sold so smoothly and efficiently and how delighted they were with the results”. 

Now there is every possibility that Mr & Mrs A were real clients and that they genuinely did rate Agent B highly. The problem is that we as prospective clients looking to appoint Agent B have no context. We do not know when this experience took place - last month or 5 years ago? What and where was the house that the agent sold and what were the circumstances? What was the registered valuation of the property and what was the sale price? How was the marketing plan implemented and what scale of marketing was undertaken? How long was the property on the market and how did that compare with the market at the time? Where there issues and obstacles that resulted in challenges which the agent overcame?

Now certainly I am sure that Agent B would be prepared to provide a contact for Mr & Mrs A for you to call them and chat through, but again playing devils advocate how can you be sure that this client is a fair representation and not carefully curated. Add to which generally most of us, unless you happen to be a HR practitioner, like making unsolicited calls to strangers to get a reference. I wonder actually how many people actually do reference checking of agents?

The fact is real estate is not a business that actually lends itself to social reviews. The activity of service is far too infrequent which leads to too few experiences upon which to provide a rating. The client feedback is always solicited after the completed sale at which time the majority of people are in an elated state as they have got through what has been a nerve racking experience and want to celebrate - so why not show their appreciation for their agent?

It is therefore almost inevitable that all agent reviews will be positive and not just because of the aforementioned celebratory state but because most people transact real estate on such an infrequent basis that it is hard to objectively benchmark.

In someways the better agent assessment should be as I shared in my recent series of articles about selling my home - an assessment of the agents as they pitched for my business. At least making the assessment at this stage would multiply the base of reviews three fold. Ask yourself, would you be interested to meet and evaluate either of the two other agents I reviewed but did not appoint for the service I was looking for given the feedback I provided as to why I did not appoint them?

I know agents might not like this proposal just as they seem to dislike the idea of objective metrics of performance. However there is nothing to fear from not winning a client, as most businesses are discovering in this hyper-networked world of reciprocal reviewing, a negative review is not the end of your business, as long as it is not the only review. People assess reviews on balance and negative reviews demonstrate that there is objectivity in the reviewing process and the person being reviewed is at least human. The other aspect is how you respond to a negative review. Ignore it or challenge it, and it will likely diminish your profile ranking. Respond in an open manner to seek to understand how to improve in the future turns a negative review into a favourable perspective.

I have no answer to the question of how the real estate industry should move to a more transparent interaction for review and rating. I certainly would like to see more objective data around agent performance ideally around the success focused metrics, in addition I think providing a open and trusted platform for clients’ reviews of agent pitches would be a great start. Of course we may at some stage even see agents rate and review their clients.. “Mr & Mrs A could not have been a more helpful and accommodating clients, Mrs A home baking was a delight but I really wish that they could have kept their dog Bruno under better control as every time I visited, it would leap on my lap as I sat down and I was just too polite to tell them .. I hate dogs!”

Property musings on Facebook - 5 September

Here are the articles posted on Facebook over the past week - short, spontaneous insights and observations which I felt needed immediate discussion and didn't warrant long-form articles written.


The Housing Crisis


Yet more innovation in the marketing of property for sale

I often vacillate between a fascination for the latest shiny bauble of technology and the fundamental mantra of KISS (keep it simple, stupid). So it is with real estate marketing. Great photos, contextual information that sells the real benefits of the property; forget the videos, augmented reality and virtual tours!

But every now and then a piece of technology appears that distracts you and I find myself resetting my perspective. So it was when the iPhone was launched. I could see the impact the locational capability would have upon the real estate industry and the experiences surrounding the process of buying a home.

Equally I have long held a dislike for virtual tours which thankfully have become less popular over the past 3 years as video seems to have surpassed this early multimedia presentation. I found one example online to remind me of how nauseating they are - that sense of vertigo they create as you seem rooted to the spot as the property spins uncontrollably around you. You can sense my dislike!

So when I first heard of 3-D virtual tours I recoiled in horror at the concept of these nauseating images - but with 3-D glasses!

How wrong I was, as it turned out, and what a surprise I got. I first came across 3-D virtual tours at the annual real estate tech start-up competition called FWD Innovation Summit organised by Realogy (The largest global franchise real estate company). Inaugurated last year this competition offers the winners US$25,000 in an attempt to stimulate innovation and ideas focused on real estate. This years winner at the event held in June was Matterport the makers of a new camera technology that creates a true walk-through experience for any space, but clearly of great value for home viewings.

The Matterport camera costs US$4,500 and is more a data analysing device than a traditional camera. You simply place the camera on a tripod in various points around the home and it ‘absorbs’ the images from all around and then ‘stitches’ them together to create a complete smooth immersive walk through of the property.

No 3-D glasses, no headsets and importantly no nauseating virtual tour this is a self managed drive through, so the term “3-D Virtual Tour” is actually incorrect, it is a self-guided remote viewing for a home (bit of a mouthful!).

As ever the proof is in the pudding or in this case the viewing, so to get a sense of the power of this technology have a look at this real example of a actual listing from the embedded player below. The size of the data file could take a few seconds to load and then just dive in to virtually walk around the property with your mouse of finger in exactly the same manner as if using Google Street View.

 

This technology is smart and has been quickly embraced by one of (if not the) most progressive real estate companies I have come across - Redfin. They are planning to utilise this technology on as many of their listings as they can as quickly as they can. This is just the type of game changing advancement that a smart real estate company should and will adopt - so who will be the first such company in NZ to adopt this and show leadership.

Property musings on Facebook - 29th August

Here are the articles posted on Facebook over the past week - short, spontaneous insights and observations which I felt needed immediate discussion and didn't warrant long-form articles written.

 

Australia vs NZ in house prices

Selling your home - a personal perspective: 4 - The Sale!

The critical day arrives. Probably second only to a wedding or other significant event, is the day your home finally sells. In the case of our home, that day was the day of the auction on that Wednesday afternoon. Nerves were evident, as were the usual questions:

  • Would the prospective bidders our agent had identified be there?
  • Would there be sufficient interest to generate a bidding war?
  • Would bidding exceed our reserve?
  • Would anyone turn up?

These are the common questions asked by anyone about to sell their house by auction or in fact almost any forms of sale.

But before detailing the outcome of the sale let me recap. As chronicled in prior articles I have over a series of 4 posts detailed the processes and decisions we had gone through in identifying the method of sale, choosing the agent and establishing the marketing plan for our house. Overall a carefully planned programme designed to ensure that our property was presented to potential buyers in the most appealing manner to generate interest and stimulate demand, and ultimately sell our home. 

One aspect of the whole process that most impressed me and strangely (given my experience in the industry) surprised and delighted me, was the very detailed and intimate understanding we gained through our agent as to the prospective buyers. I do not know if this degree of detail is common practice but as a seller it was vital to a sense of connection to the process.

At each meeting with Blair in de-briefing the weekly open homes as well as interim meetings and chats, he shared insights and feedback on each of the key prospects he had identified from enquiry and open home visits. He referred to these prospective buyers by name. He provided insight as to their personal situation, where they lived, what they were looking for, what their expectations of price were and what aspects of the house they most liked and disliked.

Over the 3 weeks of the campaign leading up to the auction we saw insight into a total of 5 couples. The insight was not intrusive nor in any way a breach of privacy or personal confidences,  but provided us with a great ability to manage our expectation and in so doing I believe added credibility and professionalism to the role Blair played. As I say, if this is common amongst agents then these smart agents in my view do themselves a disservice in not highlighting this value they bring to the process. In my opinion it is vital and truly valuable part of the real estate process.

Through the 3 weeks of the campaign we had what amounted to a virtual leaderboard ranking of prospective buyers with some surprising movements. Barely 7 days into the campaign we had what both Blair and ourselves though were the perfect couple as buyers. Cashed up from selling a property in the South Island and frustrated at living in rented accommodation, this couple ‘fell in love with our house’. They visited  a couple of times and Blair talked to them about making a pre-auction offer of which they were engaged around the idea. We even were able to verify their seriousness as we witnessed them bidding at an on-site auction at another very similar property in the neighbourhood. Then things went quiet with them for 5 days only to discover that in those intervening days they had not only found another very different style of property, but had actually attended and bought it at auction! It just goes to show how little you can tell of people’s real interest or intent.

We heading into the last 7 days leading up to the auction with what Blair believed were two strong potential buyers. The property ticked all the boxes for them and they had both seen the house a couple of times. They appeared to have done their due diligence. Based on this and the belief that you have to take the market for what it is, we sat down with Blair coming up to the final weekend of open homes. Our question was ‘why do we need to do these final weekend open home viewings?’ - it seemed to make no sense, who would suddenly appear out of left-field 3 days before the auction? Blair convinced us against our better judgement to go ahead, so dutifully we tidied up and prepped the house again for what we thought would be a quiet viewing.

How wrong could we have been. A new buyer appeared, or at least a relative of a prospective buyer. They loved the house and wanted their relatives to view the house when they came up to Auckland on the Tuesday (the day before the auction) - not a problem we thought, can’t do any harm. Little did we know that this prospective buyer would go on to buy the property!

A key step before the auction was the setting of the reserve with Blair. Naturally we had developed our own view of the expectation of price and what we would be prepared to accept. As a point of note I choose not to reveal the reserve or the selling price - this is not the essence of this article. This is a matter we as sellers choose to remain confidential. The reserve we agreed on was surprisingly aligned with Blair's recommendation, or maybe it is not surprising as through the 3 week campaign he had provided a clear view of the expectations of the prospective buyers, accepting as always that buyers never want to truly show their hand when it comes to price.

The reserve price was set at a level at which we would be satisfied. Like all sellers we would wish to be blown away by frenzied, manic bidding with a stunning resultant price, way above the reserve but you have to be realistic. At the end of the day the difference between our reserve and Blair’s recommendation was less than 5% - naturally we were higher!

An unusual set of circumstances arose in relation to the actual auction day and time which meant that my wife could not attend. This troubled us as to how we would cope if we could not both be there as joint owners of the house. Our immediate thought was how to facilitate the signing of the Sale and Purchase Agreement - would we have to get a power of attorney for me to sign for both of us?

Again this is where you can be surprised about how little you know of the process. In an auction you as the sellers completely sign over the sale to the auctioneer who through a right of representation acts legally on your behalf to transact the sale at a price at or above the reserve. This document was signed the day before the auction effectively leaving us both out of the process.

This is a very interesting situation and something I sought advice on from an independent and experienced agent. His advice (somewhat surprising) was that you as sellers should not attend the auction! The logic being that in this way you insulate yourself and thereby avoid the pressure coming from the auctioneer and agent trying to encourage you to compromise on the reserve if the bidding fails to reach reserve. This is a very interesting strategy and something I had never considered. If the role of the auctioneer is to sell the property at or above the reserve and this is your wish then not being present has its merits (and some degree of risk as I am sure many agents will tell you).

So the auction time duly arrived and I was alone at the auction rooms with my wife on standby via text message (she was actually doing a presentation!)

Blair had told me in a pre-meeting that he knew that there were definitely two serious buyers in the room.

I won't take you through the chapter and verse of the actual auction suffice to say that the auction lasted 5 minutes and 24 seconds - I know that because I recorded it on my iPhone - captured for posterity! There was as anticipated, two genuine bidders. Once of the bidders clearly had a threshold which he stuck to staunchly despite the best skills of the auctioneer. The property reached a final bid which was just below the reserve. So with a pause in proceedings, the auctioneer began a somewhat lengthy and protracted process of negotiation with the highest bidder with a clear instruction staunchly adhered to from me that the reserve was fixed and not up for negotiation. The end result was that the auction was recommenced and called and the property sold "under the hammer!"

In my opinion the outcomes was a satisfactory conclusion, whereby as I have often said the price expectations of us as sellers was met by the preparedness of the buyers to pay that price - I felt that the outcome was fair and open; and neither party should have any reason to feel aggrieved nor triumphant.


So after a number of weeks of tense anticipation and nervous expectation we sat back at a well deserve celebratory dinner (actually pizza and a beer at 4 in the afternoon!) and reflected over the process. We had in our hand a signed unconditional agreement for the sale of the our house, with the deposit already transferred from the buyer to the agency rust account; thereby allowing us to move on with our lives and to close a chapter on both the ownership of this house and the selling process.

When it came to reflecting on the cost / benefit analysis of the process we did not (as is universally accepted in the process) physically write a cheque for the commission fees paid to the agency company. We did not feel the ‘pain’ of that large amount of money leaving our bank account, it was seamlessly deducted from the balance of the deposit paid by the buyers. However, we have reflected often on our decisions and the process, and we do not in any way begrudge the fee we paid for the services provided by Blair. We felt that we were professionally guided through the process without undue stress. We discovered great insight from the process and were delighted with the outcome. That chapter of our lives is over and a new chapter begins.

Mobile platform - getting smarter and growing in importance

iPhone iStock_000017188325Small.jpg.png

There are more internet connected devices in people’s hands these days than the total installed base of computers and laptops. If you add on the 440 million tablet devices to the 1.6 billion smartphones it far exceeds the total of 1.53 billion desktop and laptop computers.

Data from Mary Meekers (Kleiner Perkins Caufield & Byers) presentation at the ReCode conference on Internet Trends May 2014

Data from Mary Meekers (Kleiner Perkins Caufield & Byers) presentation at the ReCode conference on Internet Trends May 2014

We have reached this tipping point of mobile vs desktop and from here the divergence will only accelerate , especially as currently only a quarter of internet usage is on a mobile device. A few years ago we heard the phrase “mobile-first’ when describing the mindset of new tech companies, that mantra has to be a continuing theme of all business models that rely on a technical platform. When it comes to real estate advertising, there is no argument it is a technical platform that dominates real estate advertising when seen from the consumer perspective.

An interesting deeper insight into this mobile usage for home searching was highlight in data last year from the US portal of Realtor.com published in the Wall Street Journal which highlighted the profile of mobile vs desktop searching by suburb in the US. The findings showed that the higher priced suburbs saw far higher usage of mobile and that within this usage which exceeded half of all views, the Apple iOS ecosystem dominated with combined iPhone and iPad accounting for 50% of views vs. 8% for Android in these high price suburbs. 

At home in NZ we have seen a number of developments to the mobile landscape over the past year with enhancements to the Realestate.co.nz app as well as the Trade Me Property app. In addition we have had the launch of the Kiwi Bank Home Hunter app and a iPad app from Open2View.

When analysing the relative level of audience to Realestate.co.nz and Trade Me Property earlier this year I analysed the performance in terms of downloads using the tracking analytics of AppAnnie which ranks apps on a top 1,000 list per country. At the time back in Aril there was no doubt that Realestate.co.nz continued to lead the field in terms of the higher ranking in new downloads, added to which its installed base built up over nearly 4 years had given it supremacy over Trade Me Property amassing over 200,000 downloads.

Revisiting the latest stats from AppAnnie though shows a very significant difference as the two charts highlight below:




Trade Me Property’s iOS app (for iPhone and iPad) has leapt in the rankings since the beginning of July from 350th placed downloaded app in NZ to an average of around the 70th most downloaded app. Meanwhile Realestate.co.nz download ranking appears to have slipped from a high of 175th place at peak in Feb / March to 250th overall place in the past 3 months.

What could have lead to this significant lift in the rankings of Trade Me Property?

I don’t actually have the answer - I will ask Trade Me Property to share their secret if I get the chance. However if I was in their shoes the advertising tactic I would have used is the new download app placement available now from Facebook and Twitter

The sheer simplicity and contextual logic of these ad services staggers me. Both Facebook and Twitter as news and social platforms are more and more about mobile - they are also used constantly and given the profile data they have about users they can target so perfectly so as to maximise conversion and in so doing minimise advertising spam and maximise revenue per ad unit.

Look at this simple example:

Option 1 : Web advert for mobile app

Consumer experience - if on a desktop / laptop click on advert, taken to company website and the click again to app store to then sync app with mobile device. If on mobile device often face difficulty of landing page design not optimised for mobile

Cost for campaign: $4 per 1,000 impressions - company buys 1,000,000 impressions. Typical click through rate of 0.05% = 500 clicks to landing page, 70% conversion to app store and 50% conversion to download.

Result - 1,000,000 ad units, spend of $4,000 for 175 extra downloads = $23 per acquisition

 

Option 2 : In app download

Consumer experience - only on mobile as specifically targeted. Only shown if profile matches profile of property buyer

Cost for campaign : pay for performance vs. pay for adverts. $15 per download is far less than cost of traditional advert. Conversion rate of 10% - to achieve 175 downloads requires only 1,750 ad impressions and costs just $2,625.

This model is a win win for each party - the consumer is saved the extreme bombardment of endless ads, the company only pays for successful downloads, the advertising platform (Facebook & Twitter) shows far less adverts and attracts new advertising revenue.

 

This is the future of advertising and saves us from the ages old ‘shotgun’ approach to marketing. That is how I would approach the promotion of a mobile app.

Property musings on Facebook - 22nd August

Here are the articles posted on Facebook over the past week - short, spontaneous insights and observations which I felt needed immediate discussion and didn't warrant long-form articles written.

Ultra Fast Broadband & House Values




Selling your home - a personal perspective: 3. The Marketing

Property marketing is one of my favourite topics and something I have shared my opinion on for many years both on the Unconditional blog which I started in 2007 and on this site. As regular readers will know I have in all this time been consistent about one thing. That is, that digital marketing has taken over from print media in the minds of the consumer and consigned this former stronghold of property marketing to the dark ages - never to return.

So it therefore should not come as any surprise that when it came to selling our home recently I was committed to a purely digital marketing campaign. 

So having gone through the process of choosing a real estate agent to handle the sale of our house as detailed in the second article of my four articles detailing the personal perspective of selling our home, we came to the decisions around the marketing of the property

In my view having spent the majority of my career in marketing focused roles, I judge that marketing covers a wide gamete of components and is not simply the reserve of advertising placement. It is far more about what, how, when and where. In the case of property marketing it focuses on the form of marketing as in the platform of sale, the positioning of the property, the presentation of the property, the promotion of the property and the performance of the marketing through the campaign. Let me review and share the approach of each of those 5 P’s.

 

Platform of Sale

This refers to the various options - By Negotiation/ Auction / Tender / Priced. An imperative for me in property marketing is the need to drive the process. I think it is ineffective and lacking in focus to simply announce to the world through an online listing and a sign board, that this property is for sale and then hope that someone makes an offer. Urgency is a tool that should be leveraged. The reality of selling a property is there may well be a buyer out there who will judge that your house is simply the best, and the house they have always wanted, and that they are willing to pay way over the odds for your house. The cold hard fact is that though this could well be quite likely and even possible, what is highly unlikely; is that this ideal buyer just happens to be in the position to buy your house now. So you have to be pragmatic and deal with market today - this month, and focus on the reason why you are selling - you want to move. If you don’t want to move then don’t put your house on the market, the real estate industry really doesn’t need another listing that sits on the books for a year or more.

For this reason I have a preference for Tenders. They appeal to me for the reason that they establish a deadline by which time buyers need to commit themselves. Are they in or out? Offers submitted as Tenders can be either conditional or unconditional. Tenders force buyers to put an offer price on a contract that is their ‘full and final offer’ - with no knowledge of what anyone else is offering. This compares to auctions which are public spectacles in which the winning bidder secures the property for a small (relative term) amount more than the unsuccessful bidder. Finally Tenders allow the vendor to calmly and in their own time examine and consider the submitted Tenders and accept, reject or negotiate with any of the submitters.

I have sold by Tender in the past and therefore had a preference. However I listened to my agent. Blair accepted all of these views as well as hearing (or knowing) my reluctance to the Auction method. He articulated very well the benefits of an Auction. It was a focused method which had a deadline. It ensured buyers were focused. He spoke of the recent sales experience with very similar properties in the area that he had sold by Auction. He also shared the experience that Tenders were less common and therefore could create wariness in the minds of prospective buyers. We were persuaded, not easily I should add, that an Auction would be the best method.

Another component of the platform of sale is the duration of the campaign. Given our pragmatic approach to recognising that you have to accept that the market will only deliver buyers who are ready to buy; it was our decision to go with a 3 week campaign. This would allow sufficient time for all interested parties to view and assess the property whilst keeping the whole process moving along at a good pace and keep marketing impact high.

 

Positioning of the Property

Positioning is all about identifying your buyer profile and creating the look and feel to attract them to view the property. In our area of Auckland there is a very common minimalist villa renovation-look which dominates - white surfaces, lap pools and large bi-fold sliders. Our house (as a reflection of our own taste) is what we judge to be a more sympathetic modernisation of a character villa appealing to people who want modern convenience without loosing the heart of the property. This recognised that our house may not appeal to city dwelling young families but more to older generations who crave the convenience of the city suburbs but like the character detail. Positioning is not so much about choices as to how you might position a property as few people will be re-designing or renovating prior to sale. It is more about recognising who the prospective buyers may be and how to best appeal to them.

 

Presentation of the Property

Presentation is all about creating impressions. Put it another way its about creating an experience which ideally limits criticism of the property. It may be hard to believe, but often people judge properties not on the attributes which are easy to see and tend to be presented in the listing details, but in the drawbacks and general criticism. Don’t like the curtains! the bathroom is too small! there was a strange smell! could see the neighbours messy back yard etc! 

Presentation is about literally ‘courting’ prospective buyers when they check out the property at an open home. Working hard to minimise criticism and capture the hearts of those prospective buyers.

 

Promotion of the Property

For me this was the easy part - online. That’s it!

A key part of promotion is quality materials. This starts with professional photography. Blair recommended Open2View which I have high regard for and was happy to agree on. As well as a comprehensive photo shoot I also insisted on floor plans. These in my view should be mandatory - I find them invaluable and feel that they provide a great reminder for prospective buyers are they reflective at home after a day of open home visits.

The online marketing was naturally Trade Me Property and Realestate.co.nz - again with the solus  focus online the judgement was that a plain listing was not enough so a Super Feature on Trade Me and Premium package on Realestate.co.nz were booked.

The traditional elements of a street sign and brochures were not in despite - they are a necessity.

With this comprehensive package of advertising and photo portfolio the question was still asked by Blair as to an advert in the NZ Herald. I did not criticise Blair for bringing this up. I can see the rationale for the belief that there could be a random opportunity of a buyer viewing a Weekend Herald; for them to see a house and fall in love with it. However I remained true to my principle. I would not pay for print, that did not stop Blair placing a quarter-page advert at his own cost!

Our investment in marketing totalled $1,850. This included costs for a premium featuring on Realestate.co.nz for $400, listing and premium featuring on Trade Me Property for $400, Photography and floor plan from Open2View for $650 and then signage and brochures for $400.

 

Performance of the Marketing

The ultimate performance of the marketing campaign is judged in the result of the final sale, as to how much interest was generated and how competitive was the interest from prospective buyers in wishing to bid for the property. That outcome I will share in the final article.

In assessing the performance of the marketing campaign I will let the numbers speak for themselves.

Online advertising and profiling consisted of four websites. In addition to the premium advertising on both Trade Me Property and Realestate.co.nz the property was featured on Open2View and the Bayleys website. Across the 3 weeks a total of 6,174 views were made of the property with Trade Me Property accounting for more than half of all views as detailed in the chart below showing cumulative views across the four sites for the 3 weeks of the campaign:

 

The chart reminds me so much of the typical performance curve of online listings which I analysed on Realestate.co.nz a number of years ago. The peak interest for a listing is in the first few days as the combined impact of email alerts and ‘top-of-search’ result pages drive huge awareness. That awareness and consequential views declines to a plateau very quickly. This firmly demonstrates the critical importance of ‘launching’ your home onto the market with a fanfare and grabbing the market opportunity quickly. There is an often-heard comment within the industry that the “the first offer is often the best offer” - this may have even more credibility than some may accept as early interest is high from real committed buyers who want to act.


Our agent was very effective at not only providing the stats of web views he also prepared and delivered a written weekly report (not an online dashboard - which I would have loved). This report provided the following key stats which I think are the KPI’s of the property marketing process.

A very interesting analysis of the marketing. So we 42 visits to our property over the 3 weeks. Without doubt the largest driver of visitors (19) identified their source of info as the web and the largest driver of that was Trade Me Property.  It was interesting to note that what is not detailed on this report was email enquiries. There was just 1 from Trade Me Property. To my mind this was a success! Let me explain. The listing provided all the necessary information and we held weekly open homes. The photos and floor plan gave all the necessary insight into the property - so why would you need to send an email. Email is not a key indicator of performance, if the marketing is well executed.

 

With the 3 week campaign completed, 42 visitors groups and 6,174 online views the key question was. Had we done enough to attract a buyer and was there a buyer out there who's appreciation of value in the property matched our expectation of the value of the property? That test would come on the day of sale.


Previous Chapters:

1. Method of Sale

2. Choosing an Agent

 

Future Chapters:

4. The Sale!

Selling your home - a personal perspective: 2. Choosing an Agent

We have recently moved house and with the heartache and stress behind us, I felt that now was the time to examine and report on the process in order to provide an opportunity to, from a personal perspective, share observations and opinions on the whole process.

I have broken down the process into what I see as 4 key steps from the starting point of judging the right method of sale (private sale or with an licensed agent), through choosing the agent, the marketing and then finally the negotiated sale.

In the first article I shared the decision making process in judging the right method of sale, whether to try and sell privately, use a traditional licensed agent or try an new emerging online solution.

This next section details the process of selecting a traditional agent.


Choosing a local agent

Our choice of an agent was extensive, as is common to sellers in major cities and towns throughout the country. The major real estate brands within the industry are all well represented with offices in the local suburb. However the local office presence was of little interest. Our interest was in the individuals rather than the companies.You don’t deal with a company, in the real estate process you deal with the individual agent.

We decided that we would select 3 local agents and invite all of them to visit the property and to get them back to present their proposal as to their recommendation for the best approach to marketing and selling our home. Naturally as part of the process we would be interested to learn their assessment as to the value of the property. I think too often people treat the decision making process of choosing an agent as a mock auction with the adjudication based on the appraisal value. The agent isn’t offering to buy your house at that price, so their assessment is nothing more than conjecture - based on professional skills, I accept.

 

So which 3 agents to choose?

This is the approach we took. Firstly we would invite the agent who sold the house to us. I am sure this is an often chosen route. They were successful in selling the house last time, they are active in the market, they know the house and they would appreciate better than anyone the changes and improvements we had made. The agents concerned were Marty Hall and Heather Lanting from Ray White - Ponsonby.

 

Our second choice was an local agent that we had met at numerous open homes we had visited. We liked his approach and were avid readers of his weekly market report email which provided a great weekly insight into the new listings and sales of property in the area. This agent was Kirk Vogel from Barfoot & Thompson - Grey Lynn.

 

Our third choice was again a local agent that we had met on occasions whilst viewing open homes. What most significantly drew us to him was the fact that he had in the past few weeks sold a very similar property in the area and this we judged was an excellent opportunity to leverage this specific knowledge as well as the contacts of prospective buyers who may have missed out on that property. This agent was Blair Haddow of Bayleys - Ponsonby.

 

We ensured that prior to inviting these agents to visit the house we had prepared it to the same presentational standard that we would judge, you would expect from an open-home visit. In my opinion the presentation standard is as important for impact for the agent to experience as it is for potential buyers. There is a sense of wanting to capture the attention and commitment of the agent to want to represent us and our house, as much as us selecting them. Each agent was invited to meet us at our house as a fact finding step, for us to assess them and for them to see the property. Each was then asked to go away and provide a proposal to us as to the approach to selling the property including the recommended method of sale, marketing programme and an assessment of the likely sale price of the property.

Allowing time for them to respond, we scheduled sequential meeting times for all 3 parties to present their proposal to us on the same afternoon, thereby allowing us the opportunity to be able to easily assess them, and for us to make a decision and get the property on the market.

I can say that the decision of which agent to choose was not an easy decision. I have decided to be very open in detailing not only who was our chosen agent but also to highlight which were the agents who we shortlisted but who did not represent us. In doing so I wish to remain objective.

In terms of local presence Ray White Ponsonby and particularly Marty and Heather have a very high profile in the area having sold many houses around our location. Comparing them to Kirk at Barfoot & Thompson and Blair at Bayleys they were the more ‘visible’ option. Having said that our decision not to choose them came down to the accuracy of their appraisal for our property. They neither over-pitched nor undersold the prospective value assessment of the property. However their assessment lacked the contextual relevance that the others did. They benchmarked our property against properties that were significantly different and their range of selling prices spanned too broad a spectrum. This left us with a degree of an unclear picture as to how they came to the conclusion of a property value range which was in its self in our view too wide.

Barfoot & Thompson are a strong player right across the Auckland market and across all types of property and prices. However the fact was in considering Kirk Vogel we were selecting him and not Barfoot & Thompson. In that regard we were concerned that the types of properties that he had sold over the recent year were not in the same price range as ours and whilst he had a strong command of the local market intelligence as to what had sold where and by whom when it came down to it he had not sold a “house like ours”. This factor above all others drove our decision not to appoint Kirk to represent us in the sale of our house.

Our chosen agent was Blair Haddow of Bayleys. This decision was not made as a result of the exclusion of the other two contenders, far from it, Blair was our clear choice once we had seen all three submit and present their proposals. Blair impressed us in his professional approach to the proposal to market the house, as well as his insight into the local market. However core to our decision was his recent experience with prospective buyers who are looking for a house like ours.

It is worth highlighting that the commission fees were discussed with all three selected agents. We wanted to be fair and objective and recognise that a market base fee was appropriate. This did require us to negotiate the fees where necessary with those who were charging higher fees so as to ensure that the fee commission was not a influencing factor in the final decision, in doing so we created a level playing field where price was not the deciding factor.

With the decision to appoint Blair came the decision as to the marketing strategy of the property which I will detail in the next article. 


Previous Chapters:

1. Method of Sale

 

Future Chapters:

3. The Marketing Process

4. The Sale!

Digitally enhanced photos could provide a new marketing service

When you mention to someone the concept of photoshopping property photos you I am sure, will conjure up the idea of tinted blue skies and lush green grass when in fact the lawn is actually bare earth and the sky a dull grey!

There is no doubt that to take actual images and start re-touching them is at best, misleading and at worst, deceptive and potentially in breach of the principles of advertising and representation, especially when trying to pass off the image of the property as the real thing.

However just for a moment consider a very different approach for the presentation of property marketing which could give a whole new take on photoshopping images.

Have a look at the two images below which are featured in an interesting article from the US headlined "Real estate brokers take digital trickery to new levels with virtual renovations"

Original image

Original image

Image after photoshopping

Image after photoshopping

A striking difference I am sure you would agree. The point being that real estate agents always ask buyers to "imagine" how the property might look with their furniture or with a little less clutter. Sure there are applications which can allow anyone to creative virtual images of property with any furnishings and colour scheme all through virtual reality glasses - but who wants to?

However a real estate agent / company could provide a great service where in addition to the actual photos of a property there are also a set of photos that have been professionally photoshopped to create an alternative layout or look-and-feel. The key here is "additional" - trickery as the article states is where images are replaced with re-touched photos. Enhancement of the presentation of a property could be created as an added-value service of creating "Concept Photos" for a listing - just imagine!