The industry 'circles the wagons' around Realestate.co.nz

by Alistair Helm in


The real estate industry has been rallying around their industry owned website since the radical price change implemented by Trade Me Property a year ago, in a manner somewhat akin to circling the wagons. 

The resultant boycott, although somewhat patchy on a regional basis, has seen the relative strength of Trade Me Property slip from what must have been 100% of licensed agent’s listings to around 75% - a figure that does not seem to have changed much over recent months.

The real estate industry may judge the initiative a success. However the messaging within the industry around the role of the industry owned website may need some refining as a recent video by a loyal and passionate real estate licensee shows.

The video entitled “Support Realestate.co.nz !“ is a somewhat tongue-in-cheek news alert to fellow real estate agents which uses the analogy of “not putting all your eggs in one basket”.


Here is the script of the video:  

Hi, I’m Dave Umbers, I’m a real estate agent, salesperson, licensee, principle. Short message for you all today.

Our industry needs your support, our industry is Realestate.co.nz, these eggs here they represent our listings, if we give them away to someone else to look after we loose control of those eggs. So, keep our own eggs in our own basket by putting them all on Realestate.co.nz. Your business will flourish, our industry will have a future, and everybody will be much much happier.

I’m Dave Umbers, please, please I urge you, this is our website Realestate.co.nz. It’s the goose that lays the golden egg.

Whilst Dave Umbers begins the video with a statement that “This message is unsolicited” the intention is clearly to spread the word widely within the real estate community and seek unified support to bolster the standing of the industry site. 

I find his analogy of the egg basket very interesting. To suggest that placing listings on Trade Me Property is in someway akin to putting all your eggs in one basket is in my opinion naive at best. The real estate industry continues to try and convince their clients that the print media publications from the Christchurch Press, to the NZ Herald and from the Dominion Post to the Property Press are the best form of advertising flies in the face of this characterisation of Trade Me Property. Either the real estate industry genuinely believe online is the best form of advertising or they don’t - they should not speak with forked tongue!

I further find the reference to “loose control of those eggs” equally fascinating. These ‘eggs’ as Dave describes them are adverts for their clients listings, nothing more, nothing less. Adverts that are created under an agreement with those clients to act in their clients best interest to successfully sell their home. So how do they ever imagine that they are “loosing control” of these listings as adverts. The agent has a legal contract in the form of a listing agreement providing them surety to exclusively provide services to their client in the sale of their client's home which includes among other things advertising. So could they possibly think that Trade Me Property is taking control and endeavouring to null and void that agency agreement?

The video somehow portrays the website of Realestate.co.nz as some form of industry foundation using the phrase the “goose that lays the golden egg”. I am sure many in the real estate industry know full well that Realestate.co.nz is not a charitable foundation. It is a private company and its shares are held in part by individuals or companies who are not the subscribers or customers of the website and who one day may well decide to profit directly from the website in the form of profits or sale. So the phrase “the goose that lays the gold egg” may well be prophetic as it may turn out to be the nest egg for some of those shareholders one day to the exclusion of the likes of Dave Umbers and others of his colleagues across the country.

The final reference made to the benefit of placing those listings exclusively on Realestate.co.nz providing the industry with a “future” is fairly dramatic. Does the industry really fear their own viability as a result of an advertising platform changing its pricing model? Does the industry not believe that they deliver value to their clients beyond the choice of where to advertise a property for sale? I do. I believe that real estate agents deliver significant value, unique value in the aspects of market knowledge and intelligence, skills of facilitation, negotiation and that persistent ability to work tirelessly to deliver a positive outcome for their clients. Choosing where to place an advert and worrying about the cost of that advert at $149 pales into insignificance as compared to the overall service they collectively deliver 75,000 times a year.

Sure having an industry website is great. Many of their colleagues in other countries around the world wished they had an industry website, but those colleagues are not fearing their business future over a website platform and how much they charge. Advertising whether in the form of print media or online has always been a part of real estate. Whilst I was not involved in the industry 20 years ago but I am sure there were times that agents were up in arms about the annual increase in fees charged by the NZ Herald, The Christchurch Press, the Dom Post and Property Press. I am sure they felt blackmailed by the then media at the time. Equally I am sure in 20 years time the real estate industry will be up in arms about a media cost for reaching an audience. In that future it may not be Trade Me Property, it maybe Facebook or some future media platform, who knows?

The key thing to remember here is that buyers need to find out about property for sale. Agents need to represent their clients' properties to as wide an audience as possible. To reach that audience they have a professional duty of care to use all and any media that can deliver that audience. In today’s world that is online and for NZ online has to include Trade Me Property as well as Realestate.co.nz. My view would be never put all your eggs in one basket when it comes to advertising whatever the colour of the basket. Always provide clients with options of different advertising platforms.


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

by Alistair Helm in


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. 


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

by Alistair Helm in


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!


Properazzi musings on Facebook - 11 July

by Alistair Helm in


Here are 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.

A Compelling Headline



Trade Me Property - an insight into a new design?

by Alistair Helm in ,


It’s about this time each year that we start to get glimpses of the potential look and feel for a new iPhone - the rumour mill goes into overdrive ahead of the latest design and the people at Apple panic lest a test version is left behind at a bar!!

When it comes to design at Trade Me Property I am not sure there is quite the same amount of excitement, rumour or speculation. So let me take on the role of cheerleader of what I think may be a future direction of Trade Me Property in the mobile arena and possibly the web overall !

This potential new design style isn't the result of any leaked documents left idly behind in the rubbish bins of Wellington as Trade Me relocates across the road to some seriously smart new offices, no this design look and feel is as they say ‘In the Wild’ - as per the new design of a Windows 8.1 app.

Now I know Microsoft tablet installed base is not that huge. Estimates for last quarter of 2013 was 4 in every 100 table sales was for a Microsoft OS version - potentially rising to 1 in 10 by 2017, but it is clear that NZ has some very smart Windows 8 developers.

This I think is the key. For the development of this app, Trade Me has worked with an outsourced team from LazyWorm Apps. In doing so I think they have brought some fresh thinking to the Trade Me Property look and feel. Up until now mobile design has been somewhat constrained by what appears to be very hard baked-in principles of the core design principles of Trade Me design, which whilst ensuring super intuitive design user interface has ended up looking a little samey and dated. So I think this new look and feel is the result of a smart decision by Trade Me to let things run a little bit wild on what is likely to be their smallest installed base tablet app. However what we may see is this design creep across the web and other mobile platforms.

 

The Design

This is the screenshot that got me hooked from viewing the profile pages of the app ... sadly I don't have a Windows tablet to view it on so the comments are limited to the look rather than the user interface.

There is a simplicity and cleanness to this design. The function menu uses the colour cue of the brand whilst the logo is recessed. The images of properties are clean and engaging.

 

The map view of search uses neat shaded circles to cluster listings in a very clear way with density of colour reflecting density of lisitngs

The listing image viewer consumes the screen in an immersive manner with the overlay providing the necessary contextual information



Trade Me Property adds map based search

by Alistair Helm in ,


Call me cynical, but I struggle to feel that our online property searching experience here in NZ is taking bold new leaps forward with the announcement of 'map based search' from Trade Me Property.

It also appears that I am not alone in this regard as my ever insightful news-service of Twitter clearly shows.

Now the cynicism may be from a 'geek' perspective as both Layton and Dave are certainly respected in the realm of NZ Geek Society. However as Dave rightly asked me "how many years ago did we (realestate.co.nz) do that?" - the answer is 6 years ago,  January 2008 as this article I wrote on Unconditional testifies.

I certainly go along with Layton's view that the solution is well executed - something that Trade Me excels at - delivering a great user interface, great design and an intuitive feel.

However I keep coming back to this fact that this is not so much a step forward as a very long overdue catch up.

To be at least taking a step forward, Trade Me should have executed this service with the ability to "draw your own search area" as many real estate websites offer around the world. This example from Trulia in the US highlights this capability - allowing you to be very granular and definite in your search area for property, in this case, no more than 2 blocks from the beach offering just 7 properties that suit my specific requirements.

Another even better execution I found was by Homely - a new innovative start-up real estate website in Australia - far from being a multi-million dollar company, this small passionate design lead team have produced a lovely execution of "draw your own search area".



Trade Me vs. Real Estate Agents : 5 months on, could the boycott be growing?

by Alistair Helm in , ,


Back in November last year when the news of an agent boycott over proposed fee increase by Trade Me hit the mainstream media, I was pretty sure that sanity would prevail and more importantly vendors would not be used as 'Pawns' in this issue of internal costs of marketing.

It's now 5 months later and the issue is still not resolved and as each week passes I would judge that the balance of power is tipping significantly in favour of the agents.

Back in February I reported that the then two highlighted areas of the country where the initial boycott had begun - the Hawkes Bay and Hamilton still had a situation where Trade Me listings were significantly reduced and in some cases dominated by private sale listings. Revisiting the situation today shows a continuing gulf of listing stock stock between Realestate.co.nz and Trade Me Property in these areas.

Taking the Hawkes Bay region - as at this week Trade Me Property is displaying less than half of the property listings for sale than Realestate.co.nz (based on all house types as well as lifestyle property).

The data analysis of the Hawkes Bay I have undertaken this time has broken down the listings by real estate company.

Screenshot_28_04_14_9_13_pm 2.png

As reported at the time, the regional players of Property Brokers and Tremains who between them represent close to 40% of all listings in the region continue to boycott Trade Me Property; they currently feature less than 1 in 20 of their active listings on Trade Me Property (most of which are listings added by the vendor with the agent details). This means that from amongst the 1,594 active property listings on the market at this time in Hawkes Bay, Tremains and Property Brokers between them are not displaying 583 of them on Trade Me - that is significant over 500 properties for sale from the two big players in the market not being displayed on Trade Me Property!

Given the extent of this boycott it is clear that these companies are not facing any adverse reaction from sellers - properties are being listed and sold in the Hawkes Bay without the exposure on Trade Me Property.

Widening boycott?

What is also significant from the Hawkes Bay data is the extent to which Harcourts are boycotting Trade Me Property, with less than half of their listings in the region displayed on Trade Me, that amounts to another 181, adding to the 583 from Property Brokers and Tremains not featured on Trade Me.

The extent of this boycott by Harcourts is dramatically seen when doing a search on Trade Me Property for Harcourts listings by listed date - there have only been 3 new listings across the whole of the Hawkes Bay region in April from Harcourts whereas in fact from data on Realestate.co.nz shows the total number of new properties listed by Harcourts in the region in the month was 227.

The National Picture

Applying this analysis to the national picture, Trade Me Property is displaying 8% less listings of property than Realestate.co.nz (this total includes private sale listings).

The analysis below details the extent of the support or boycott by real estate company. Clearly Barfoot & Thompson and Ray White are at this time supporting the use of Trade Me (or as an alternative conclusion these companies agreements with Trade Me have yet to reflect the new charging rate).

Whereas Harcourts are only featuring 7 out of 10 of their active listings on Trade Me Property. Harcourts are the largest real estate company in the country with over 190 offices and currently 8,315 listings of properties for sale.

Equally as significant is the analysis of listings from Bayleys and LJ Hooker who also appear to be boycotting Trade Me Property which in the case of LJ Hooker with 2,664 active listings on the market results in only 1,755 of them displayed on Trade Me Property.

 

Boycotts in Other Regions

Further investigation of the listings data shows that in addition to the Hawkes Bay, the Manawatu / Wanganui region is also witnessing a boycott of some significance.

From amongst the 3,223 active listings of properties for sale across the Manawatu / Wanganui region (using the boundary definition of Trade Me) as showcased on Realestate.co.nz, just 2,567 of them are shown on Trade Me Property (actually somewhat less as this number includes private sale listings). The breakdown by company, shows that it is only Ray White that has almost full support for Trade Me Property whilst Harcourts display less than a third of their listings on Trade Me Property. Equally other key players in the market such as Professionals and LJ Hooker display less than 70%. 

The anomaly though is Property Brokers. This region is their heartland where they hold close to a 30% share of all listings on the market, yet they are displaying over 60% of their listings on Trade Me Property - a very different situation than that in the Hawkes Bay.

So in conclusion it looks like the boycott of Trade Me remains and if anything is growing, given the extent of the Harcourts representation (or rather lack of it!) on Trade Me Property. In my view as each week passes without some action or decision or negotiation (which clearly will be going on behind closed doors) the market position of Trade Me Property weakens and the muscle flexing by agents appears to be working.

 


New boundary view - a step forward down a narrow lane! (Updated)

by Alistair Helm in ,


Trade Me Property has announced the introduction of a new feature for property listings, the boundary details of properties. This service complements the existing map view and street view. It is not universal across all listings as it needs an accurate address detail. Scanning the site randomly checking listings from different parts of the country showed that it is somewhat 'pot luck' as to its availability.

A_Home_That_Welcomes_You___Trade_Me_Property-2.png

This new feature is sadly long overdue, firstly as it a core layer of content that has been available through both Terralink's 'Property Guru' service and Property IQ service for many years - these two competing services are only available to real estate agents and other property related companies as a subscription service, although it has been on the Zoodle and QV sites.

Secondly it is the first innovation we have seen from either Realestate.co.nz or Trade Me for a very long time - we have seen both of these companies prepared to spend millions of dollars recently on advertising campaigns trying to prove who is biggest! - yet sadly the consumer as a buyer of property has not seen any innovation. This is in marked contrast to overseas property portals where innovations flow on a weekly basis and provides the competitive tension between players in other countries - the consumer being the winner whereas here the TV companies are likely to to be the winners.

Speaking of competitive tension, it will be very interesting to see if and how Realestate.co.nz responds to this innovation. In the past there was a degree of a partnering of the two major property websites with the two property data companies - Trade Me with Property IQ and Realestate.co.nz with Terralink. However effective 1 January 2014, PropertyIQ NZ Limited and Terralink International limited officially came together as CoreLogic NZ Limited. This came after the Commerce Commission cleared the merger between the two businesses in November.

So now there is effectively only one player in town when it comes to detailed property mapping and if Trade Me has secured CoreLogic as a partner as this latest innovation suggests then it leave Realestate.co.nz out in the cold. Far from the principle of how the Commerce Commission saw this situation.

In the documents relating to the merger and in the findings in favour of the merger the Commerce Commission stated that:

“The Commission considered that PropertyIQ will continue to face competition from existing and emerging competitors in these markets. Furthermore, we consider that new competitors entering these markets are able to access the key datasets through negotiations with local Councils and other sources and will also constrain the merged entity,” said Commerce Commission Chairman Dr Mark Berry.

Certainly when it comes to general mapping there are numerous suppliers - Google being the main service used by both property websites, however when it comes to boundary details this is a very local mapping service here in NZ and 'drawing' this detail on maps will continue to be done by one company (as it was in the past) the main difference is that in the past 2 competing companies could sell this service - now there is only one player to offer this service, in my view lessening competition and denying the consumer a valuable service across their property website of choice. 

Updated - Friday 28th Feb 10am

I tweeted this post and received this reply from Trade Me Property

Now I think I understand the tweet - if I am right what they are saying is that the code integration to create these boundary link images takes about 4hrs and at tis time the system is busy doing open home data load.

If this is right then the question is why not do all this code loading on a beta site before releasing it publicly. The images being shown under boundary views are images (as a picture file) and therefore all it requires is a database look up on an address and then bring into the website the weblink from the CoreLogic image server - if no file then don't show.

If I have this wrong then I have asked Trade Me Property to comment below to clarify.


What is a listing?

by Alistair Helm in


Classifieds_jpg__900×600_.png

It struck me the other day when reading a comment from a reader to the various articles regarding the reaction by the real estate industry to Trade Me Property new pricing structure for property, that part of the problem is in someways the words we use and the connotation they infer, borne of age-old experience.

Think about it for a moment, the heart of the discussion is around the notion of the cost / value of a listing. But what is a listing?

So much of our approach to this issue is governed by our old-media thinking. Newspapers still instruct our frame of reference. A listing in a newspaper was governed by column inches. Simply a list of articles for sale (in this case a house). Page after page of the newspaper were full of 'listings' - probably given the 6 column structure of newspapers you would have close on 100 house listings on a page. Such layout in simple black newsprint text could do nothing to provide more than the bare facts - suburb, size, features (though limited) and contact details or open home details. 

As such this basic listing, charged on a per inch basis was never expected to be significant as a true 'advert' for the property, it was simply a inclusion in a stock list. To achieve impact and draw attention of buyers it was necessary to pay for advertising in the form of 1/4 page 1/2 page or full page adverts with photos. In rough terms of cost a listing might cost $30 and full page advert $1,000.

So the use of the word 'listing' in the context of the web is entirely misleading for the costs of a 'listing on Trade Me Property' today costs upwards of $399 but delivers more than the $1,000 full page advert of old. Full colour images, comprehensive details, maps and social insight, contact details and contextual data. Not to forget that the advert is targeted to all property buyers and is seen by an audience of over 100,000 a day - challenge to any newspapers audience at the height of their era. It is also significantly important to remember that the advertising for the property is active 24hrs a day to a global audience until sold - the listing in the newspaper was classically there on Saturday and in the trash by Sunday morning.

So whilst somewhat over simplifying the situation - if we thought of a 'listing' on a website as an advertising feature or a webpage advert we might redefine our frame of reference and squabble less over the price of a listing and think more of the value of the advertising.

Interestingly though, now with over a third of viewing of property on mobile devices we should stake a new term entirely. How about a properties "Digital Profile". In that way you can pay $399 for the digital profile on Trade Me Property and then choose to do an enhanced Feature advert or Super Feature advert upgrade, which is interestingly not 30 times the cost of the old newspaper listing - why? because the basic "Digital Profile" delivers so much more advertising value!.

 


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

by Alistair Helm in


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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

 


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

by Alistair Helm in


The news headline from the NZ Herald: "Agents shun Trade Me after listings fee surge" is as ever an engaging headline but largely incorrect and unlikely to come true. As yet real estate agents have not shunned Trade Me Property and as the article goes on to suggest, I suspect that by February when they propose to recharge for these fees, this story will be history.

The fact is this resentment by real estate agents to accept a new fee structure from Trade Me Property is totally out of context to the true value of the service that Trade Me deliver. The context is this. To sell a house in NZ using one of the many name brand franchise real estate companies costs for an average house $17,000. The advertising budget for that house has to include online and has to include Trade Me. Now an agent may tell you that you need to spend upwards of $5,000 for a comprehensive marketing budget and it should include this advert and that full page and this flyer and that insert. The fact is you don't. There is Trade Me and that's it (add in professional photos and a sign board as well). The cost of that advert which promotes that property to an audience in excess of 120,000 visitors a day to NZ'ers and a global audience is just $399. Just $399 to sell a $500,000 property for which an agent charges close to $20,000. Oh and by the way an agent can get this $399 advert for just $159 + GST.

Now agents are up in arms because they used to be charged up to $1,000 a month to list all their properties, which for an average office which had 10 listings of property for sale a month was $100 per listing, now they are being charged $159 + GST per listing. Now certainly for a larger office which say lists 50 properties a month the cost will rise more significantly but you could argue the larger offices were paying far too little for the value of the service.

Trade Me Property have been explicit in their communication of this increase which they fore-shadowed back in September to recommend that agents pass on the cost to the sellers as sellers are well aware of the value of Trade Me Property and also well aware of what it costs to advertise on Trade Me.

So agents are up in arms - revolting at what they see as "astronomical" increases, Harcourts New Zealand chief executive Hayden Duncan stated the increases at Trade Me "unreasonable" and "nothing short of price gouging". He said if Harcourts' 181 branches absorbed the new fees it would cost tens of millions of dollars each year. This statement is very interesting - Harcourts have around 21% share of the NZ property market and are the market leading company. Each year they would list around 28,000 properties for sale based on the Trade me fee of $159 that totals $4.4million, hardly "tens of millions of dollars" and set against around $235 million in commission fees the $4.4m pales into insignificance.

The Bayleys Waikato regional manager Stephen Shale quoted in the article, predicted Trade Me listings in Hamilton would be "decimated" by February.

"Trade Me will have virtually no stock in Hamilton," Mr Shale said. "And the viewings will diminish if the stock isn't there to look at. If there's nothing to compare your property to, the private seller is the one who'll pay because you're not going to have the eyeballs on the site and the industry site won't allow private sellers."

What he fails to appreciate is that even if his agents tell vendors that they personally, and his office do not support Trade Me the vendors will simply go onto Trade Me and list their property themselves. Added to which it is hardly professional for an agent to state that they are boycotting the leading marketing platform over $159!

Real estate agents seem to have short memories. Back in 2007 the industry believed it could hold out and stem the rise of Trade Me. At the time Barfoot & Thompson as well as Harcourts refused to allow their listings on Trade Me - they supported and believed their own industry owned website Realesate.co.nz was the best place for listings. However gradually one by one, office by office the industry crumbled, as vendors listed their property on Trade Me themselves or switched to an agent who would list on Trade Me. Six years later Trade Me has only strengthened its position as the de-facto marketing for all property in NZ and now the industry believe that they can boycott Trade Me Property - I don't think so!

As was posted on Twitter - maybe vendors should boycott agents that won't advertise on Trade Me Property

If the real estate industry believe that their future lies in an industry owned property portal rather than a well established specialist marketing service that attracts the lion's share of viewers then they should know they are in good company - their colleagues in the UK and Australia share their views and frustration over what they see as a gorilla like site they have helped establish now charging heavy fees. The problem is their aspiration to divert traffic and boycott the leading site is a pipe dream. Have a read of an article I wrote earlier this year on Property Portal Watch titled "Industry Owned Portals - the Aspiration"

Related articles:

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

Trade Me Property solidifies status as property marketing powerhouse

Trade Me makes radical change to real estate agent fees


It's all change at Trade Me Property

by Alistair Helm in


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Trade Me Property is the most important component of property marketing in NZ. As I have written before, without Trade Me Property, a house on the market for sale or rent is effectively not being marketed as the vast majority of buyers (and sellers) rely on Trade Me Property to provide the definitive picture of the property market. No other medium has as comprehensive a selection, nor an audience of its scale.

This pedestal though is being tested effective the 1st November by the implementation of a new pricing structure applicable to real estate offices detailed in an earlier article I wrote. The news has certainly been a wake-up call to real estate offices who have up until now absorbed the costs of subscription based listings on Trade Me.

In the article I wrote, I included a quick poll asking readers to let me know if these new charges should be passed on by real estate agents to vendors as an advertising cost of around $200 or if the cost should be absorbed by the real estate agents.

Over the past month I have been collating these responses. Now the survey is hardly statistically valid as in total I have had 53 responses but the results have been to my mind surprising. 

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An overriding majority of readers who have contributed with their vote (for which I appreciate the response) have proposed that the industry should recharge the costs of Trade Me advertising, just as with other advertising costs! 

I would interpret this response more as a demonstration of the value and criticality of Trade Me as the advertising platform of choice for all sellers than as a reflection of the principle of vendor-paid-marketing on top of the commission fees. This would somewhat seem to somewhat fly in the face of the comment made by the CEO of the Real Estate Institute who commenting on the Trade Me fee increase described the outcome as likely to result in Trade Me becoming "an 'added extra' for vendors, rather than automatic when signing up with an agent"

 

Change of leadership at Realestate.co.nz

The other big news from Trade Me Property last week was the very surprising announcement that Brendon Skipper, the Head of Trade Me Property since 2006 was leaving to become the General Manager of Realestate.co.nz. 

The board of Realestate.co.nz made the announcement ending a period of more than a year since I left the company as CEO in September of 2012. During this period the leadership of the company had been undertaken initially by the Chairman and then by Philip Dunn who assumed the role as acting CEO from his role of COO.

I must admit I am very surprised by this decision and have fielded a number of calls from within the industry also expressing surprise. Brendon is a very capable person who I have known over the years and he has overseen the significant growth in Trade Me's role and relevance within the real estate industry from being a little trusted challenger to the industry to being a much trusted and highly valued part of the marketing portfolio for the industry.

Why then with this success would he leave the No.1 online business in NZ - a company valued at over $1.7billion, with a property business which commands an audience 5 times that of its competitor, to take up the role running a much smaller business. A business which is not a listed company and in many ways not a true commercial entity given its shareholding securely locked between the Real Estate Institute and 5 of the large real estate companies. A company which from all reports is solidly focused on cost control and tighter integration with the Institute as a member benefit rather than an ambitious consumer focused property service business.

I wish Brendon well and hope we may see more innovation from Realestate.co.nz as a result of his new position. Realestate.co.nz is in my judgement a true specialist property portal rather than a horizontal retail marketing portal with a property section, however being defined as something does not make it that way or prove its value to its target audience, that has to be earned through the value judgment of its customers and consumers.

 

 

 

 


Trade Me makes a radical change to real estate agent fees

by Alistair Helm in


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Trade Me has made a bold and challenging move, telling the real estate industry that they need to charge clients for their property to be listed on the site, instead of absorbing the cost.

With effect from the 1st November the company will no longer offer bulk subscriptions to real estate companies that previously allowed them to pay a single monthly fee for unlimited listings.

This move comes shortly after the annual report for the last financial year highlighted that the property section of the business held significant revenue growth potential.

Let’s look at the situation for a typical real estate company. I chose at random Professionals Rotorua (McDowell Real Estate Ltd). In the last full month of August the company listed 19 properties for sale.

The current subscription fee is a base cost of $250 plus $124 per listing with a cap of no more than $999. So this office would in theory pay Trade Me $999 for those 19 listings in August.

With effect from the 1st November the base fee of $250 is removed as is the cap. Each listing will be charged at $159 – a total for August of $3,021 – a 200% increase.

The big question that each and every real estate agent and real estate company will be asking right now is how can we manage this?

Click to access the full proposal to agents

Click to access the full proposal to agents

Trade Me are very clear. As far as they are concerned this fee-per-listing should be passed on to the vendor as a cost to market a property on Trade Me. After all a private listing costs $349 / $399 (inc GST) so $159 + GST ($182.85) is almost half the cost of a private listing.

In the communication being sent to real estate agents Trade Me detail that the recommended price agents should charge vendors is $199+ GST ($228.85) – this allows a 20% commission margin for agents. The Real Estate Agents Act is very clear in detailing that in terms of advertising costs that the vendor pays for, the listing agent must stipulate if there is a commission earned for selling any advertising. At the time the Act came into force in 2009 the industry were very clear that they in the main passed on advertising costs without a commission. Now there is nothing wrong with agents earning a commission selling advertising, it is just interesting that Trade Me are so explicit with it in their communication.

This is certainly a bold and aggressive move by Trade. In terms of marketing a property for sale – advertising on Trade Me is the essential part of any campaign and when compared to c.$1,000 for a full page in a single property magazine or many thousands of dollars for a picture in a newspaper spending $200 for a listing on Trade Me is cheap.

Will the vendors accept this re-charge?

Since the start of Trade Me as a legitimate website for property for agents back in 2005 most agents have not charged their clients to have their property on Trade Me, just as they have not charged for Realestate.co.nz or their own website.  They started back then from the perspective of online advertising being a “nice addition” to the mainstream advertising of newspaper and magazines. Over the last 10 years that situation has reversed, nowadays newspapers and magazines are the “possible addition” to the mainstream online advertising. Accepting this change has been tough for agents and more especially real estate companies as print media is so effective in real estate brand advertising as compared to the web which is solely property focused.

Clearly though real estate agents and companies have no choice; as to swallow this cost for all listings would mean the industry would have to pay up the $21m of revenue that this move creates for Trade Me up from an estimated $7.5m earned in the past year from subscriptions.

Once established as a vendor cost recharged by agents then it will make it easier for Trade Me to apply annual increases of the order that they have applied over the past 8 years to private listings for property.

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Share your thoughts - Should real estate agents re-charge the new Trade Me fees for advertising a house or absorb the cost?

 


Choosing the right marketing plan to sell your home?

by Alistair Helm in


This may well be the shortest article I write. There is actually only one very simple, yet highly effective marketing plan to sell a home in NZ. It is two words.

 

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That’s it. Trade Me – let me say it again incase you missed it.

It doesn’t matter if you decide to list with Ray White or Barfoot & Thompson or Harcourts or LJ Hooker or Professionals or Bayleys or any other brand. The fact is that every real estate agent in this country will feature your house on Trade Me’s Property section in the same way. They all have a subscription to upload all their listings as part of a standard monthly subscription.

In addition to every property being marketed by a licensed agent, every property being sold by its owner privately will be on Trade Me. Futher more every property buyer, be they an investor, first-time buyer or traditional buyer will be using Trade Me, setting up favourites, receiving email alerts and using the mobile app. The old argument that there are property buyers who don't use the internet is just that an old and outdated argument!

Trade Me receives over 150,000 unique visitors a day to property listings – that’s far more than there are genuine buyers in NZ on a daily basis. You can be safe in the knowledge that within that total are the prospective buyers of the house you are looking to sell.

That’s it – done. The fact is at $399 it is the only marketing budget you need to spend.

There are in addition to Trade Me a host of other options for advertising property for sale; many of which real estate agents will try and convince you are critical to the sale of your property for this reason or that reason. The fact is you don’t need them. Let me be clear they are not irrelevant, however every one of them will be viewed by people who also use Trade Me and will see your property in all its glory on Trade Me.

My advice is to think of Trade Me as the main meal, everything else is simply fancy trimmings. This analogy does though highlight the other core part of marketing your home, for the main meal is not a main meal unless the ingredients are the most appetising - appetising ingredients like great photography is eye--catching and mouth-watering!

 

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So there you are just two / four words that are the core to the marketing plan to sell your home - Professional Photography + Trade Me!

 

Disclosure: Just in case you think this is in some way a piece of paid for advertorial by Trade Me, I can categorically say it is not. I spent 6 years competing with Trade Me when I ran Realestate.co.nz, which is a great site and hugely supported by the industry and loved by consumers, however in the online marketing world of property Trade Me is the King.  I should also point out that I have no financial interest in Trade Me as I do not own shares in the company.

 


Real estate agents fondness for auctions may be their downfall

by Alistair Helm in ,


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There was a time back in 2005 when the real estate industry despite buoyant sales at the time, monetarily feared that their future was in jeopardy as Trade Me started to offer private sellers the opportunity to marketing their homes for sale in a way that could reach as wide an audience as the mainstream print media could do for licensed agents.

Further, home owners found that Trade Me could facilitate online auctions which generated genuine bidders and completed sales. At that time the selection of properties for sale on the site was purely limited to private sellers; as real estate companies saw no interest in what they saw as a “bargain hunting style site” in their view, hardly a credible place to advertise a property for sale by a professional agent.

Trade Me over the next 12 months made a strategic decision that was to lead to their future success and has contributed to the hugely successful listed company that it is today with a market cap fast approaching $2 billion. That decision was to withdraw from its role of endeavouring to reinvent the real estate industry through facilitated private-sale online auctions and instead focus on attracting real estate companies to advertise their listings on the site. A decision that in today’s market generates around $20m a year representing a large part of the $100m or so of marketing spent by the real estate industry each year.

 

Archived page from Trade Me real estate section from January 2005 shows only private sales with bids active for one of them via web.archive.org

Archived page from Trade Me real estate section from January 2005 shows only private sales with bids active for one of them via web.archive.org

What is interesting is that the decision did not in any way hamper the site from becoming the most important marketing platform for all property whether for rent or to sell, for private sellers or licensed real estate agents. And whilst the cost of advertising a single property for sale may have risen from $0 for a private seller back then to close to $400 today there is no doubt that the value for private sellers in having this ‘level playing field’ is immeasurable.

To advertise a property whether it be a private listings or an agent listing achieves the same level of interest on Trade Me as the detail below shows.

 

The 'level playing field' for the marketing of property online has been established, especially as Trade Me dominates the viewing audience with somewhere around 1.8 million unique visitors a month to property online vs. around 450,000 for Realestate.co.nz.

However as I have often stated, to sell privately is not simply about marketing your property online. The sale only occurs when the buyers have been corralled to front up with an offer, and this is where the professional real estate agent trumps private sellers as their experience and skills matched to their ‘thick skinned’ tenacity drives them to bring buyers to the table to sign an agreement.

However that marginal, yet significant point of difference, in my view is being undermined by the very tool agents seem to be in love with these days – the auction.

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Auctions are the preferred method of sale by agents, they have really taken off in the past couple of years amounting to over 40% of Auckland sales and ever and ever shorter auction periods which in my view they are simply getting out of control. Ironically it could be this ‘lemming like’ magnetic attraction to auctions that could ‘level the playing field’ of the selling process to match the ‘levelled playing field' of marketing property created by Trade Me.

Examine for a moment the components of an auction process run by a licensed real estate agent and contrast it with that undertaken by a private seller – because private sellers are turning to auctioning their homes.

  1. The property is advertised on Trade Me Property

  2. The auction date is set and a licensed auctioneer is booked

  3. The open home times are displayed

  4. Open homes are held

  5. Interested prospective buyer details are collected

  6. Interested prospective buyers are contacted (email / phone) to answer questions and remind them of the auction date

  7. Follow up contact is made of prospective buyers close to auction date

  8. The auction day arrives and the auction is held undertaken by a qualified auctioneer

  9. The property sells at auction or is passed in for further negotiation

  10. The legal agreement (the Sale & Purchase Agreement) is signed and the deposit paid

The 10 steps of the process to sell a property at auction. Nowhere in that list of 10 steps is there any difference what-so-ever between what an agent would do and what a private seller would do. There is no extensive facilitation or skilled negotiation, there is no time spent chauffeuring people around open homes or acting as a courier of sale and purchase agreements.

Auctions have been proven by the real estate industry to be an efficient process to sell a house. Auctions though are not the exclusive domain of real estate professionals. Auctioneers are a separately regulated profession governed under the 1928 Auctioneer Act. They oversee many forms of auctions from car auctions to art auctions to industrial materials auctions – all are professionally licensed and could turn their hand to sell a house by auction in exactly the same method as a real estate professional.

In my view the real estate industry has driven itself blindly down an alley that destroys the very essence that is their unique point of difference that distances a professional operation from a private seller; that of facilitating and negotiating the sale of the property. Yes, I can almost hear the cries from within the real estate industry as to the value of market knowledge and market appraisals to guide the seller. However ask the question of an agent of a property going to auction – “so what will it sell for?” – guess the reply… “ah that is what the auction will do, let the market decide, the process will establish the true market value!


Here is a selection of current private sale listings to be auctioned from Trade Me Property

 


Digital marketing - the solution for selling or renting property

by Alistair Helm in ,


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Whether you are a property owner of an investor there is certain to be a time when you need to sell a property, or find a new tenant. 

You may well decide as part of your strategy that engaging a real estate agent or a property manager is the smart decision, after all they are professionals and they know best. They are self-employed and earn their living doing exactly that – finding buyers or finding tenants.

Whether you choose to use such a professional or you choose to do it yourself, in my mind there is no excuse for abdicating responsibility for the marketing of your property. For despite the well intentioned job title of many agents who profess to be “Marketing Consultants” very few actually are functionally trained or experienced in marketing and even fewer are up-to-speed on digital marketing.

I make this assertion; as over the years I have been astounded by the lack of appreciation by most agents as to the power, impact and cost effectiveness of digital marketing. Too many agents fall into a ‘cookie cutter’ approach to marketing a property, or to be more accurate advertising a property.

They are very likely to come out with a spiel such as “We’ll undertake an extensive 3 week advertising campaign starting with letter-box drop to local addresses, weekly full or half page advert in the local property magazine and newspaper and of course we will display an impactful 'For Sale' sign outside your house. I will then undertake an extensive telephone outreach to my database of buyers which will secure great attendance at the weekly open homes and should secure a strong buyer interest within the first couple of weeks”

It is highly likely that this proposed ‘personalised’ marketing campaign would have been recommended 20 years ago as much as it is the generic line for most agents today. The only addition that has crept in over the past decade is the additional line “of course we will also feature the property on our website and of course Trade Me and Realestate.co.nz” – sadly often thrown in as an after-thought.

Contrast this with the fact that over three quarters of all property shoppers, whether looking to rent or buy a property use the web as the first and main source of information and more commonly these days use mobile devices. This data sourced from the annual Nielsen Real Estate Report is unfortunately a couple of years old, but logic would say that the percentage has only risen. These savvy online property shoppers use multiple services such as daily email alerts for new properties, saved searches on their favourite website, as well as planning open home schedules on Google maps.

There has been some heated debates as to whether a property can be marketed entirely online or whether there continues to be value and unique appeal in print media. In my opinion we have pasted that point – you can successfully and confidently market your property entirely online. Simply put, the reason print media advertising of property still exists is entirely for the benefit of real estate companies and agents. They love the branding and exposure, the solid blocks of multiple consecutive pages where the property image fights for attention against the company branding, providing questionable value to home shoppers, as after all what they want to see is all the properties in an area at a price point, not what Agent X has to offer!

Having made this firm assertion, the next question is how should you advertise online and where?

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The where is easy. Whereas in the past multiple website profiles was seen as beneficial, the fact is today there is no incremental value in being on more than 2 websites – Trade Me and Realestate.co.nz. Why so?

Trade Me is the most viewed NZ website for people looking to buy / sell  / rent anything – if you are not on Trade Me you are not online. If this comes as a piece of news to anyone I would be surprised! Realestate.co.nz on the other hand is valuable for two reasons. Firstly it has reputation as a specialist site, and whilst people who use it to search property more than likely also use Trade Me, they do show a strong loyalty to the site as well as more importantly the mobile app. Secondly, there are a number (albeit few in number) of real estate agents that still hold out from using Trade Me. I know it seems unbelievable but some of the smaller independents do.

Do you need to use any other sites? No.

So the question then becomes how can you make sure your listing attracts more attention / visits than other competitive listings. You need to think about advertising your property for sale or rent as a competitive play. If you don’t attract the right buyers or tenants you will diminish the value of what you offer.

There are just two golden words to remember PRESENTATION & PROMOTION

PRESENTATION

Presentation is all about the photos. Recent research has shown that when it comes to real estate listings 95% of people, when viewing real estate websites view the first photo for around 20 seconds. It’s all about the photos; as the study went on to find that a staggering 4 out of 10 people completely ignored the agent spiel in listings. People trust their eyes and not (so it seems) agent hyperbole.

Get a professional photographer to do a broad portfolio of your property, this is as important for rental properties which suffers as all too often landlords forgot how important photos are to presentation online. Take the time to photograph the rental property between tenants when it is clean and tidy, with a minimum amount of furniture, just enough to show the feel. You can then reuse these images again and again.

I believe that the optimal number of photos for a property is around 20 and for most properties you can really show all aspects within this portfolio. It is unlikely that an investment property needs more. As important as a good number of quality photos is the critical aspect of choosing the first photo. This photo is the one that really has to work hard to grabs the attention of the shopper. It has to be of the most relevant aspect of the property, in the case of a standalone house it must be the exterior as seen from the road. In the case of a townhouse or apartment the living area is probably the right choice.

A final point in regard to the photos, if you organize the photography directly and I would; then ensure the agreement with the photographer means that you own the images and thereby you can use then when you like – too often photos are notionally owned by the listing agency despite the fact you paid for them.

PROMOTION

Promotion is all about creating standout. The base cost of listing on websites is often free. Generally the agent will include the cost of a listing on Realestate.co.nz, and possibly Trade Me as well. As a private seller Trade Me listing for sale, only costs $349; or $399 if the RV is over $450k. Given these minimal costs there is more than enough scope to invest in promotional features on these sites. This type of promotion does work to ensure your listing stands out from the crowd of other listings.

If you chose to use an agent to sell your property then your marketing costs should not need to be more than $1,000, this would comprise the photography of around $300, a Super Feature Combo on Trade Me for $299 and a Quality Package on Realestate.co.nz for $250. Compare that with a single page in a Property Magazine, which will cost you well over $1,000. That print advert lasts barely 3 days and is only seen by locals as compared to the online campaign which lasts 3 to 4 weeks and is potentially seen by a global and local audience.

If you chose to do it yourself you would need to add the listing costs for Trade Me, but then in that case you would not promoting the property on Realestate.co.nz as their listings are by real estate agents only so you could step up the promotion on Trade Me.

Digital marketing for property is easy, accessible and affordable – take control of the marketing of your property, get engaged and benefit from being a smart operator online, it’s that simple!

This article is also published in the June edition of NZ Property Investor Magazine

 


Property searching on the go - a review of mobile apps

by Alistair Helm in ,


Realestate.co.nz Trade Me Property smartphone apps.png

The evolution of the web has undoubtedly transformed property searching over the past decade; however the emergence of smartphones and the associated vast array of mobile computing devices just 5 years ago is set to transform property searching at a much faster rate. Already most property website operators report close to half of all engagements with their listings are from mobile devices and is rising everyday.

Mobile searching is intuitive. As we all know the only really effective way to assess property is to get out there in the car and walk around; sure the web is a great starting point but what you really want to do is capture your hit-list of property options and carry them with you, as you drive around, that is what the mobile device is designed for.

Checking out the Apple app store or Google Play Store for Android offers up a number of property apps for NZ and a vast array of others for overseas markets. For NZ there are a few small operators who have taken advantage of the open API (access to the raw database) from Trade Me and produced mapping solution. Sadly these under a variety of names are best steered clear of, as they lack the functionality of the only two which are worth considering – Trade Me and Realestate.co.nz.

However before reviewing these two I would like to mention an app from the ASB that is so close to being great, but sadly misses the mark. The Property Guide uses the data feed from Trade Me to create rich content of listings, to this is added the QV data of legal description and government valuation for every property on the market. This is the only app that offers this valuable data and is the only single source of this data freely available on the web. The app though fails on almost every other criteria. The listings are often out of date. There are no contact details of the agents listing the property and so on. Maybe the app will improve, time will tell.

Trade Me and Realestate.co.nz are the trusted apps as they are the trusted property websites; their respective apps have been downloaded over 100,000 times and really hold the greatest value interest to buyers and investors.

Realestate.co.nz was first to launch an app for the iPhone in late 2010, Trade Me followed mid last year with its dedicated property app for the iPhone and iPad. Those with Android devices really only have the option of the Realestate.co.nz app at this time.

So which is better and what are the most valuable features on these apps that can save you time or improve your buying process? I have evaluated the two apps on these 3 criteria of (i) content (ii) ease of use and (iii) storing & sharing data.

Content is critical and both apps present as close to the full complement of listings on the market. Trade Me has the edge when it comes to property for sale as it features private sales as well as agent listings. When it comes to rental property Trade Me dominates with more than twice as many listings. However the important thing to note is that listings presented on map view comprise only those properties for which the agent has supplied an accurate address – no address, no pin on the map! At this time around 1 in 5 properties on the market do not have an accurate address. Given this issue is common to both apps, no advantage can be gained by either company.

Free Realestate.co.nz iPhone App - Realestate.co.nz-1-1.png

Ease of Use is vital for mobile devices given the smaller screen and lack of a mouse. Getting to relevant data fast is so important with as few a number of taps or swipes the better. In this regard Realestate.co.nz app scores highly. From the home screen one tap takes you to property “Near Me” showcasing property for sale within a 1km radius. This focuses the app entirely around the GPS capability inherent in the device and presents content in a map view as the default.

Trade Me on the other hand opt to default to a list view as per the website, and sadly lacks a “Near Me” option thereby requiring 3 taps to get to a map based view of property around you.

Both apps showcase individual properties equally well with full screen swipe gallery view.

Realestate app with open homes and new listings.png

An advantage again for the Realestate.co.nz app is that on the map view open homes are displayed with a distinctive blue flag separate from the red pin for property location. Additionally all new listings for the week are shown by a distinctive red flag, which highlights the newest listings – a very useful way to assess properties. Trade Me simply relies on a red pin for all listings.

Trade me Property Watchlist.png

Storing & sharing property information is at the heart of smart property searching and this would be the most critical aspect I would judge for the smart investor. In this regard Trade Me wins hands down. The app offers synchronization between the website and the app – save to your wishlist on the website and it appears on the app. Sadly Realestate.co.nz app offers local storage of favourites on the app but there is no synchronization between the website and the app. Additionally it is a little frustrating that properties stored as favourites on the app remain that way until deleted even if the property comes off the market – this is annoying as you end up with a lot of surplus data on your mobile device.

Despite this shortcoming the Realestate.co.nz app does have a useful feature called “Inspection” which is a notepad capability linked to each property. It allows for notes and photos to be kept for each property so when visiting an open home you can collate further information and especially those critical photos not included by the agent on the listing so you can review later on aspects of the property. I would judge this to be a great feature, but somewhat weakened because there is no means of synching this data to your home computer as an integrated file for each property.

Trade Me Property iPad app | Trade Me.png

When it comes to a choice between these two apps I believe that for the serious investor looking to use the app as an effective tool for property searching the Trade Me app is the better choice. I make this judgment purely on the feature of synchronization. I believe this is the single weakness of the Realestate.co.nz app. When you are searching property you want to be carrying with you at all times your portfolio of prospective properties with full information. Your primary search is likely to be in an office environment and you want this process to seamlessly carry across to your mobile device. So for me Trade Me wins for this functionality alone – it is weak as compared to the Realestate.co.nz app in many other aspects and I hope that they address this or maybe Realestate.co.nz app could hurry up and release a modification with synchronization.

This article is also published in the March edition of NZ Property Investor Magazine



Trade Me now free from the Fairfax shackles has significant upside potential

by Alistair Helm in


Investor Relations – Trade Me Group Ltd.jpg

This blog is primarily about property; the property market and real estate, although at times I allow my mind to wonder and consider and analyse related areas. This post is just such an exercise.

I followed with interest over the weekend the decision by Fairfax to sell down their remaining stake in Trade Me – in my mind a decision akin to “selling the engine to pay off the car loan" as I tweeted !

I think the winner is Trade Me, unshackled from its rudderless parents now free to demonstrate the online powerhouse it can be – the question though is how big could it be. Some of the recent articles have commentators pouring cold water on upside potential and sensing (judging) that its “trading position may not be so great”.

Now I should be very clear here, I am not a financial analyst, I do not own shares in Trade Me and I would not recommend, nor take anything I say hear as investment advice.

I do think Trade Me has a significant upside – the current share price is $4.02 as of today gives it a market cap of $1,591 million – a very healthy premium to the $700m Fairfax paid for the company in 2006. Some of the recent articles have speculated that the recent high of $4.45 back in late October giving the company a valuation of $1,761 million was a sign of the share price "running ahead of itself". I think in time the market cap could well exceed $2 billion in today’s money.

On what basis can I make such an assertion? I have simply looked at some benchmark companies in an area I know a lot about – real estate.

Trade Me Property is a very successful part of the company – it dominates the viewing of online property with over 1.5 million unique visitors a month and an average on sit duration of over 20 minutes. It's not a monopoly as Realestate.co.nz is very successful and holds a credible #2 position, however it would be a brave property seller in NZ today who did not ensure that their listing was on Trade Me Property.

Benchmarking the online property market is fairly easy and my two examples would be Realestate.com.au in Australia (Part of , well about 90% of the REA Group) and Rightmove in the UK. Both are listed companies and therefore publicly accessible information.

The Australian real estate market is more advanced in online than NZ, there around 30+% of media spend is online as compared to about 15% here, in the UK it is around 20% although the real estate market is less advertising focused as commissions are lower and this results in a lower media spend. Both of these companies are more succesful at EBIDTA margin than Trade Me delivering in the case of Rightmove 70% levels.

Using a very simple calculation method based on comparable populations and local currency conversion; the current REA market cap of A$2,289m equates to a NZ$557m real estate online business in NZ terms. Rightmove with a market cap of £1,523m equates to NZ$206m real estate online business in NZ terms. This reinforces the point made earlier about the powerhouse that REA is in the Australian real estate market. For this reason I have applied a weighting factor to arrive at a final weighted price for Trade Me with an up weighting of REA by 26% and a down weighting of Rightmove by 52%.

The table below summarises this data:

Trade Me benchmarking Dec 2012 #1.jpg

Whilst benchmarking, I examined two other specialist category sites in Australia, the listed Australian car trading site of CarSales.com.au and the recruitment site of Seek. Both are dominant players in their respective categories and thereby provides a category benchmark for both Trade Me Motors and Trade Me Jobs. Trade Me dominates the NZ car sales market, and is fighting a strong battle with Seek in the jobs market. The current market cap of CarSales.com is A$1,754m which equates to a NZ$427m car sales online business in NZ terms. I see CarSales.com.au as very similar in its sector as a benchmark to REA Group and therefore have developed an up weighting of 12%.The current market cap of Seek is A$2,343m which equates to a NZ$570m jobs online business in NZ terms. In principle whilst Trade Me is not as dominant as Seek in jobs there is no reason to down weight it's representation in evaluating a weighted valuation for Trade Me so I have up weighted it by the same 12%.

Now to determine how each of these sector specific benchmark companies contributes to an overall estimation of the value of Trade Me I have examined what I see as the current split of business between the core sectors of Trade Me – Property, Jobs, Cars and Classified / Retail. At this time I see the split as 16% for Property, 10% for Jobs, 29% for cars and 45% for classified. In future I see this changing. The future representation is also shown in the table below.

Trade Me benchmarking Dec 2012 #2.jpg

To come up with a overall calculation for the value of Trade Me I have taken the future split of business and applied this to the sector benchmark valuations to then come up with an overall valuation of just over NZ$2.3 billion based on the weighting. It's not the most scientific analysis but I think it is interesting.


New visual search for property uses Trade Me API for intuitive experience

by Alistair Helm in ,


Trade Me has launched a new visual search solution called Rummage. The website has been built jointly by Trade Me and two California based entrepreneurs Matt Inouye and Eugene Otto.

The site uses the open access API (Application Programming Interface) to present the content from Trade Me, focused entirely on images - very intuitive user experience.

This development has a number of strong components that really benefit real estate marketing. I see it as a strengthening of Trade Me’s position as the primary marketing platform for all forms of real estate in NZ. Here is my take on why I think this initiative is so relevant for real estate.

Images

Real estate is all about images. Yes location is all-important; but reflect for a moment as to the vast majority of user experiences when searching for property for sale or rent. First they establish their chosen location and then they browse properties – image by image.

This website cleans always all the extraneous material that at this browsing stage is just not relevant – no address, no “eye-catching” headline, no factual property information. People want to browse, they want to allow a veritable wave of ideas and stimulating images pass before their eyes to allow them to start to build a shortlist.

This however highlights in my view a couple of minor shortcoming in this initial version – you need to have a “save to watchlist” button. Additionally rather than a fixed a fixed image size it would be better to allow options for larger sizes. The responsive web design adjust to smaller screens but at the same time the large view on a 1680 x 1050 just looks cluttered with 6 across.

Search criteria

An unexpected benefit of the Rummage user experience is that it seems easier in some way to refine searches by styles of property. Whilst this functionality is available on the Trade Me Property site it somehow just seems more intuitive in this form.

How I experienced this is best shown by some of the most searched for styles and categories in real estate:

Coastal property

Villas

New Home

Pool

Platform

Trade Me has opened up their API and thereby their content for others to create solutions such as this new site as well as other sites and mobile apps. In so doing they are adopting and embracing the strategy of being a platform, rather than just a destination website. This is the new ambition of the leaders in digital marketing – platforms such as Twitter, Facebook and Amazon. Platforms are the new version of portals – comprehensive content allowed to be accessible wherever and whenever and in whatever device as required by users. Platforms are the big winners online.

All such platforms rely on a read and write API in this way they can as a platform strengthen the relationship with their customers -  in this case their key content customers being real estate companies and agents who seek to provide their listings on behalf of vendors with the largest and most targeted audience possible.

Rather than Trade Me having to build multiple solutions they merely have to be the core hub upon which the real estate industry relies for optimal marketing. In this way the competitive arena becomes less of a fight between two competing real estate websites, and more about a single specialist real estate website matched up against an aggregation of consumer focused solutions all pointing their enquiries back to Trade Me and on thereby onto the appropriate agent.