Innovation does exist in the real estate industry

by Alistair Helm in

Innovation shutterstock_132117815.jpg.png

When it comes to selling your house you may think there are only two options. Employ a licensed real estate agent or sell it yourself.

The comparison assessed purely on a financial basis for a typical NZ homes would leave you to spend upwards of $17,000 in commission payments with your local agent or to spend somewhere around $1,000 doing it yourself; to which you would have to undertake the facilitation and negotiation for the sale.

The reality though is there is another option. A licensed real estate company that does not charge based on a percentage commission but simply charges a fixed service fee for providing a full real estate service; a company that has innovated so that their full service is undertaken by fully qualified and experienced agents, all undertaken remotely.

Now you may say that you want to meet your licensed agent and shake them warmly by the hand, but pause a moment. After that initial meeting do you think the work of the agent in following up enquiries and keeping you updated will be done though numerous face-to-face meetings, or via phone and email?

The reality is that in today’s world so much of the work of real estate agents is done remotely; so why not have an agent undertake the whole process remotely in the first place and in so doing use their time so much more efficiently and charge a fixed fee of $4,500 (plus GST) regardless of whether your house is in Ashburton, Nelson or Auckland, whether it is worth $250,000 or $2.5m.

Sounds a good concept? – it is. The fact is this week that company offering this full-service professional real estate solution just sold their 100th house.

Welcome to 200Square

Over the past couple of years as they have been testing and refining their business they have saved sellers over $1m in commission fees. They have made 100 property owners very happy with a great result selling their homes, such  that those people have gone on to tell others of their experience and that referral engine is now driving considerable sales for 200Square. No need for them to stuff flyers into your letter box – they live and operate online and deliver their service remotely. Happy customers who rightly say, why do I need to pay these agents thousands of dollars when this new professional service can do it for $4,500.

As their service is online; as the seller you can see the up-to-date status of the selling process through a smart personalised dashboard which clearly shows you what the agent selling your house is doing, how many buyers are interested and what is the overall level of viewing of your property online. As the process progresses the documentation and facilitation is again all managed online - as they say in their service offering "We don't play Taxi Driver or Courier"

Adding to their innovative approach to marketing they recently worked with GrabOne to create a deal to help homeowners – a $49 deal gave home sellers a $1,000 reduction in the cost of the 200Square service and according to feedback from GrabOne the offer exceeded the expectation of both parties. The offer page on the GrabOne site says that 40 of these deals were bought which reflective of how many people are looking to sell during that period is a very strong result. The offer also provide a great opportunity for Grant Wakelin (CEO of 200Square) to answer some really interesting and relevant questions about the 200Square service. In my opinion the promotion speak more to the logical association of an innovative online real estate company and an innovative online group buying service, than the sheer savings alone.

It was one of those GrabOne voucher buyers that lead to the 100th seller for 200Square with a property sale in Karori, sold unconditionally 16 days after listing.

So whilst you may think there has been little in the way of innovation in the real estate industry over the past decade as the tidal wave of the digital revolution has transformed so many industries, there are pockets of innovation seeking to deliver great service at a fair price.

Open homes – questionable value for sellers so why are they so common?

by Alistair Helm in


In my recent analysis of the inefficiencies of the real estate industry I estimated that an average real estate agent spent 13% of their working week undertaking and organising open homes – that would amount to around five and a half hours. On reflection I would now like to add this segment of their working week to the 64% of their time spent by prospecting for new business. Why? Because open homes are largely a profiling and prospecting tool benefiting the agent more than the vendor.

Don’t take my word for it – ask a real estate agent. Steve Koerber, a respected and highly professional agent I know wrote in a post a couple of years ago that “The truth about open homes might set you free”. He stated that based on his calculation an open home had about a 5% chance of achieving a sale.

In rereading his post again the other day, I was reminded of a real estate training session I sat through a number of years ago run by a highly charismatic auctioneer and trainer.

He related a similar story although he was much more positive of open homes. His mental imagery for the attendees (largely rookie agents) was to reflect on the fact that that only 1 in 30 visitors to an open home were likely to be a buyer. So rather than get despondent, think of each visitor as coming in the door to give you money! He stated that based on your prospective commission of $12,000 that you as an agent were going to get for selling a house, each open home visitor was actually worth $400 – his imagery was to whisper a mental “Ka-ching” to yourself each time another visitor walked in “Ka-ching $400” - one step closer to 30 people in total!

Despite this inefficiency of hosting open homes, properties for sale still need to be viewed, as I am sure very few buyers would buy sight-unseen. Far more efficient is the process of scheduled private inspections arranged for serious buyers. This is by far and away the most common process for real estate across the globe. Sellers don’t need to waste time and effort for weekend viewings that are for the primary benefit of nosey neighbours and profile seeking agents.

An inspection professionally arranged between a serious buyer and the selling agent adds professionalism to the real estate process.

But hold on, ask yourself, does the agent need to be a part of the inspection process? Why not allow committed buyers to meet committed sellers. Not to usurp the process; but to allow a more relaxed and engaging interaction. Such a system is advocated by 200Square – the innovative real estate company whose approach to selling property is using a licensed real estate agent to facilitate the transaction whilst allowing technology and smart buyers and sellers to undertake the components of the process where the agent really adds little value – inspections and open homes. In that way they can offer a full service licensed real estate solution at a fraction of the cost of traditional agents.

Coincidentally 200Square tweeted today the feedback from one of their buyer clients, demonstrating that removing the agent in the process of the inspection removed pressure and created a relaxed opportunity to view the property guided by the sellers.

Time for a change? time to question the value of some components of the real estate industry process in order to increase efficiency and add value.

Watch My Street - Your property information (if you live in Wellington!)

by Alistair Helm in

If you are a Wellington resident or looking to buy property in Wellington then you are in luck – if however you live anywhere else in NZ then I’m sorry but the new property service of Watch My Street is not available to you (at this time).

This new property information service was launched a week or so ago and is apparently garnering a strong level of interest from residents of the capital. Helping people easily access what is basic property information in an open and accessible manner – the local authority rating valuation and other data related to the property.

The website has been built and is operated by the team at 200Square who operate a unique and innovative real estate business that is in their words is “reworking the way houses are sold in New Zealand, using clever technology, a better process and a fixed commission that puts more money in your pocket”

The team have smartly mashed together the data from Wellington City Council, Land Information NZ, combined with property listings from Trade Me Property, school zone details from the Ministry of Education and mapping services Koordinates.

This is exactly the example we need to see where public information collected by local authorities is made accessible by government agencies in a machine-readable format so that smart tech people who understand the needs of consumers can turn into a valuable service for the free – no point in wasting tax payer money getting government agencies trying to do the job, let the public decide how it should be used, after all this is our data collected for us by our government (national or local).

This is all well and good except that the following local governments do not provide such property data in a machine-readable format for free.

Far North District Council

Kaipara District Council

Northland Regional Council

Whangarei District Council

Auckland Council

Hamilton City Council

Hauraki District Council

Matamata-Piako District Council

Otorohanga District Council

Rotorua District Council

South Waikato District Council

Taupo District Council

Thames-Coromandel District Council

Waikato District Council

Waikato Regional Council

Waipa District Council

Waitomo District Council

Bay of Plenty Regional Council

Kawerau District Council

Opotiki District Council

Rotorua District Council

Taupo District Council

Tauranga City Council

Western Bay of Plenty District Council

Whakatane District Council

New Plymouth District Council

South Taranaki District Council

Stratford District Council

Taranaki Regional Council

Gisborne District Council

Central Hawke's Bay District Council

Hastings District Council

Hawke's Bay Regional Council

Napier City Council

Rangitikei District Council

Taupo District Council

Wairoa District Council

Horowhenua District Council

Manawatu District Council

Manawatu-Wanganui Regional Council

Palmerston North City Council

Rangitikei District Council

Ruapehu District Council

Stratford District Council

Tararua District Council

Taupo District Council

Waitomo District Council

Wanganui District Council

Carterton District Council

Hutt City Council

Kapiti Coast District Council

Masterton District Council

Porirua City Council

South Wairarapa District Council

Upper Hutt City Council

Tasman District Council

Nelson City Council

Marlborough District Council

Buller District Council

Grey District Council

West Coast Regional Council

Westland District Council

Ashburton District Council

Canterbury Regional Council

Christchurch City Council

Hurunui District Council

Kaikoura District Council

Mackenzie District Council

Selwyn District Council

Timaru District Council

Waimakariri District Council

Waimate District Council

Waitaki District Council

Chatham Islands Council

Central Otago District Council

Clutha District Council

Dunedin City Council

Otago Regional Council

Queenstown-Lakes District Council

Waitaki District Council

Gore District Council

Invercargill City Council

Southland District Council

Southland Regional Council

So thanks to Wellington City Council for showing NZ local authorities the way to approach this matter. If you feel that your local authority should participate in the same way then I suggest you follow the advice on the Watch My Street site and petition your local council.