Some further thoughts on the industry reaction to Trade Me Property new pricing

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Today has been a flurry of calls and chats about this NZ Herald article citing an agent rebellion to the new pricing being implemented by Trade Me Property. I feel I presented a balanced and insightful article earlier and that has been ratified by the calls I have received. 

Those calls have also further reinforced my view and at the same time added some extra thoughts that I thought I would share here.

The article states that there is a belief that agents failing to promote Trade Me Property as part of the marketing campaign for a property will result in less listing on Trade Me Property which will see viewing numbers decline and thereby result in less private sellers. Lets examine this in more detail.

Real estate is a business carried out by c.10,000 self employed contractors who day to day pound the streets prospecting for listings, having secured an appointment to present a proposal competitively pitched against probably 2 other agents, you have to ask yourself which agent is going to dare say in the presentation when asked by the seller how they will market the property “well, you see, we as Company Y do not believe that it is best to advertise your property on Trade Me Property because we think that their decision to increase their fees to us from $1,000 a month for all our listings to $159 per listing is fair!

How do you think sellers are going to react to this statement, here are my view of the optional responses from vendors:

 

Option1 - Your petty squabble with Trade Me is of no interest to me - I just want to be on Trade Me 

 

Option 2 - OK so you don’t think there is value in Trade Me to justify a fee of $159 to advertise my house - yet you want to charge me $17,000 - next agent please!

 

Option3 - OK you can waste your time squabbling amongst yourself and Trade Me over which website to use in the meantime I will with my own credit card list my house tonight on Trade Me and I will simply deduct the $399 from your commission

 

Option 4 - Can I please speak to an intelligent agent who understands that with a daily audience of 120,000 buyers and viewers there is really no logic for not advertising on Trade Me Property - next agent please!

 

Option 5 - the smart agent adds “Now what I have just told you is the corporate line - but I am independent and I am concerned to ensure your property is marketed in the best way and therefore I will make sure your property is on Trade Me Property and I will pay this out of my own pocket” - vendor response - great, you’re the kind of agent I want to have sell my house, where do I sign!

 

The industry in this situation is not in control for as much as the corporate heads of Harcourts and Bayleys, Ray White and Barfoot & Thompson and others believe they can collectively boycott Trade Me. They cannot. The people who pay the fees to Trade Me are the franchisees of the corporates who actually run the offices in the high street and they pay the current subscription, but even they don’t hold the decision, as the real decision rests with those individual agents whose interests are best served when they do not have to overcome objections, especially ones that make no sense and come from “corporate”.

Now just taking this a bit further, the logic that a boycott if effective would diminish listings - could be possible. The problem is that buyers don't actually know what comprehensive listings look like - is it 14 in this suburb or 12 or 18 ?? Add to this the belief that viewers will somehow disappear. Not likely Trade Me remember is the only site with private listings which amount to around 18% of all listings - those listings are not on Realesatate.co.nz (and nor will they ever be!) so Trade Me still retains that relevance to comprehensive content.

My main fear is that this issue is a major distraction to the real estate industry. It does nothing to bolster professional credibility and worse it makes the industry look cheap - justifying commission rates that result in people paying $17,000 to sell a house and at the same time focusing on whether to pay $159!

Related articles:

Agents to boycott Trade Me - I don't think so

Trade Me Property solidifies status as property marketing powerhouse

Trade Me makes radical change to real estate agent fees