Property musings on Facebook - 14 November

by Alistair Helm in


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

 

Agents should not reveal identity of prospective buyers




Reviewing agent performance - the transparency challenge in real estate

by Alistair Helm in


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

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

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

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

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

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

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

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

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

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

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


Selling your home - a personal perspective: 1. Method of sale

by Alistair Helm in , , ,


By the way - this is not our new house or our old house - just a nice pic of a house!

By the way - this is not our new house or our old house - just a nice pic of a house!

Recently we have completed a complex, emotionally charged, time consuming and potentially life-changing process - we have moved house!

Much like 80,000 other people this year, we have sold our existing house and bought a new house to call our home. However unlike the vast majority of these other buyers and sellers I have an insight and knowledge of the industry, and the property market that gives me somewhat of a unique perspective of the process. A process I am keen to share, providing some observations and insight, now that we have successfully completed the move.

I decided to wait until we had finally completed the process before writing what I intend to be 4 separate articles which break the process down into what I see as critical components (i) the decision around the method of sale - agent or private sale, then (ii) choosing an agent (iii) the marketing and finally (iv) the completed sale.

I will be completely up-front at the start and declare that the process was highly satisfactory. Not only that, but the experience has, I am pleased to report (and to the pleasure I am sure of 10,000+ real estate agents) significantly changed my views, presumptions and appreciation of real estate agents. 

In selling our house we followed a path trodden by over 90% of people selling their home. We appointed a licensed real estate agent, who marketed the home and undertook to facilitate the process with consummate professionalism and delivered for us a result which met our expectation. 

We paid a market rate commission which in the cold light of day is a large amount of money, however whichever way I look at it, the outcome is the most important thing - we sold our house without undue stress. We were therefore able to move on to our new home in a timely manner and naturally get on with our lives.

The starting point to this whole process was the decision around the Method of Sale - the 1st chapter:

 

Method of sale

Deciding to move house is not something that comes to you in the middle of the night as a bolt from the blue and drives you to call up a local agent the very next morning. Like most people we began thinking about moving around 8 months before we actually put the house on the market. I suspect that this time period, whilst a long time in absolute terms is neither uncommon, nor unrealistic. We wanted to ensure our house was in top condition before we started marketing it and we knew there was some work to be done, added to which we wanted time to check out the options for a new location and a new house.

With the house completed to our satisfaction earlier this year, we looked at the various options to the process of selling the house. In my mind, and with my experience, there were three valid options which I wanted to sit down and seriously consider with my partner.

1. We could undertake the whole process ourselves as a private sale or as the American’s love to call it a FSBO (For Sale By Owner). The attraction of FSBO is saving money. In NZ that saving of the fees of a licensed real estate agents run into the tens of thousands of dollars. This is a sum worthy of serious consideration.

2. We could experiment with a new model of real estate - using a licensed real estate for a fixed fee and a undertaking some of the work ourselves. This model lead by the innovative service of 200Square certainly appealed to me.

3. We could appoint a local licensed real estate agent. Make them accountable for the outcome of a successful sale and pay them a commission fee at a market rate.

Irrespective of which of these 3 options we chose, I knew for certain that there were two elements of the process that were not negotiable - we would use a professional photographer and we would market exclusively online.

A professional photographer would be engaged to undertake a complete photo portfolio of the property together with a set of floor plans - an absolute must in my opinion. When it comes to online marketing the listing on Trade Me Property was a must, together with premium featuring to ensure we stood out from amongst the other properties on the market. If we went with a licensed agent then coverage online would include Realestate.co.nz as a complementary platform.

So the first issue in preparing to put our house on the market was which of these three options we would choose.

Selling privately naturally has a significant attraction in financial terms, this coupled with its ability, through the use of Trade Me Property and a professional photographer to achieve exactly the same level of market impact, viewing and potential open home traffic as any licensed real estate agent, makes it a serious consideration for many. However the fact is that marketing your home and selling your home are as separate as buying the ingredients and serving a gourmet meal. There is so much more to the process required to bring people to the point of being able to make a decisions which eventuates in a sale and purchase contract  being signed is subtle, hidden and challenging for the average person. I have gained an insight into this extensive process over the years I have worked with real estate and I can see just how complex and under-appreciated is the process of hand-holding that is required to get people to make a serious move to buying a property. It takes a certain type of personality to be at the same time persistent, forceful, cajoling, pleasant, empathetic and ultimately results-driven to get a successful sale. We can all identify a real estate agent. They stand out from the crowd. It is that personality type that makes them effective at what they do and the rest of us, pretty poor at trying to do their job!

So having decided not to go for a private sale, the simple question then was, the traditional model of real estate agent or the new innovative model? Stacking up the similarities and differences only makes the decision that much harder.

Traditional agents and innovative real estate companies such as 200Square both operate under the laws of the Real Estate Agents Act. Both services would be handled end-to-end by professional agents with many years of experience and success behind them. Both would be able to market the property as well as each other. Both would work to succeed and earn a fee / commission on successful sale.

The only difference is really that 200Square does not physically meet you at your house, they do not have a high street office in your suburb (not that makes any difference), they do not manage the open homes; they judge that is something you can do just as well or better, and if you want someone to do it for you then can arrange it. What they do better than any traditional agency is an online dashboard putting you in the driving seat as to the progress with the sale of your house, not only the data of online viewings but an insight into the lead management and the negotiation process.

Most striking of all though is the fact that they do not charge a commission based on a percentage of the selling price which for most agents amounts to around 3% plus GST. 200Square charges $4,500 - a flat fee irrespective of the value of your property.

That comparison creates a tough challenge. 200Square has a good track record, they have been operating for over 3 years and have sold many more houses in that time than the local real estate agent, right across the country - can’t be bad.

However at the end of the day when we as a couple sat down and weighed up the decision it came down to one factor.

When my wife asked me - putting aside the costs, could I in all good consciousness tell her that there wasn't any risk in using 200Square? - I could not. Not that there is any risk at all, they are a licensed real estate agent. The issue comes down to trust and like it or not - local agents sell local houses and in our area; nobody has used 200Square in our area and therefore that presents a risk. A risk which when it comes to selling your home becomes far more amplified than for many other decision. 

The one thing which in my mind is bigger than anything else in the process of selling a property is reducing risk. That is it; and to be honest the cost of reducing that risk can be pretty high, but it is easy to justify it at the end of the day.

Future Chapters:

2. Choosing a local agent

3. The marketing process

4. The sale!


Can an agent achieve a higher price than a private sale?

by Alistair Helm in ,


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This is an age-old question and one that will generate opposing responses based on the perspective of the responder. A few moments spent on the Trade Me forum category of real estate would have you believing that private sales were a viable option and given the projected saving of many tens of thousands of dollars in commission thereby seeing the seller better off than by using an agent; although they would be hard pushed to say that they achieved a higher selling price than an agent.

Conversely a conversation with an agent would generate a response reflective of the competitive tension that an agent can generate between competing buyers such that the agent will secure the best price which would be the highest price attainable in the market. The latter caveat being very important.

For like it or not, the fact is that there is no evidential way to prove that an agent can secure a higher price than a private seller. The fact is that the price attained for a property is governed by a unique set of circumstances that can never be replicated. There is no such thing as a ‘Control’ in real estate.

What I mean by this is that in the scientific faculty everything is evinced by a Control by which any experiment is measured. Testing of drugs, improvements in battery technology, new microchip technology all of which are assessed by a Control that allows scientists to say that this version B is x% better than version A.

In real estate this is not possible. No two houses are identical; for whilst they may be two identical apartments or two town houses or even two 3 bedroom family homes in the same street, each will be different as a function of their orientation, conditions or layout. Mix into this the very unique circumstance of the buyer pool that is so small for any property and you begin to realise that every transaction is a very unique set of circumstances that occur at a point in time and can never be replicated.

Think for a moment about the sale of a particular property. Could it achieve the same sale price a week later? In theory yes, but the probability is that it would not as the price that was achieved was a function of the buyer pool at that moment in time, a day later, a week later and one or more of those buyers might have exited the market having bought another another house and equally a new buyer or set of buyers might have appeared as they suddenly became ready to make a purchase decision.

So unlike the ability to set up an experiment to test price sensitivity for a consumer product in two supermarkets in different areas of the country to test demand the property market does not afford such controls. It is therefore impossible for anyone to say that they could achieve a higher price than anyone else. The price achieved for the sale of a property is a function entirely of two aspects of the property selling process.

Maximum exposure

The ability to achieve maximum exposure of the property for sale within the buyer pool is critical to engage and motivate prospective buyers to review the property. Any lost opportunity in this area is potentially the most damaging to the sale process and impact the sale and the sale price. Exposure is not simply being on the web, it also goes to the presentation of content with particular focus on the images of the property and how they are laid out.

Competitive tension

The ability to motivate the prospective buyer pool to actively compete to challenge one another to buy the property is key to a successful sale price. This does not assume that the only method of creating competitive tension is an auction although this can be an effective public tool to create emotional tension. A standard well facilitated negotiation between active buyers is just as likely to achieve a favourable result as would a tender. The key to creating competitive tension is the facilitation process which is in someways the greatest skill and attribute of a professional real estate sales person - the ability to maintain buyer interest and bring buyers literally to the table to make an offer and to be motivated to stretch to challenge competing offers so that the final offer meets or exceeds the expectation of the seller.

There is no doubt that the component of the property selling process comprising creating maximum exposure has in many ways been taken out of the hands of the real estate agent as the online medium is the aggregation of this exposure through sites like Trade Me Property and Realesatate, however to fully optimise the potential to achieve the best result for the seller the role of the agent is hard to ignore or dismiss as it would take a unique set of skills for a private seller to replicate this capability.


More insights on the property market and property buying

by Alistair Helm in , ,


In addition to my articles here on Properazzi I am also working with John Bolton at Squirrel, the property and mortgage experts. I am contributing some regular articles on subjects of interest to property buyers and sellers.

I thought I would highlight my most recent articles which I think are of value especially to buyers at this time and state of the property market: 

 

What does a Real Estate Agent actually do?

Love them or hate them real estate agents are as much a part of the real estate market as lawyers, mortgage brokers and open homes!

Each year around 80,000 properties are transacted in this country by licensed real estate agents as compared to around 9,000 properties being sold by their owner without the assistance of an agent.

The word agent is the colloquial term used to describe a group of professionals, legally known as licensed salespeople (as defined under the 2008 Real Estate Agents Act that governs and regulates the industry). What you and I call an agent, are salespeople who are required to work under the control and administration of a qualified licensee.

Read more.... 

 

Accepting the need to compromise is one of the lessons of property buying

As a prospective home buyer you are probably aware that there are three basic criteria that govern your choice of a house. No it is not the time-honoured and often quoted, Location, Location, Location. It is Price, Location and Size. These three criteria are equally as important in driving your buying decision; yet sadly it is often not possible to optimize for all three at the same time. So dealing with this dilemma is one of the keys to smart property buying.

The driver of location; where to live is often the most important decision for buying a property. This often results from the need to live close to work, or more commonly these days as a function of school zoning. We all naturally want to live in a great suburb or town; a safe environment with great amenities and friendly neighbours. Going on at this rate will make you believe that Wisteria Lane might actually exist and those Desperate Housewives may turn out to be your neighbour!

Read more.... 

 

Making sense of property data to help you know when to buy or sell

Lies, damned lies, and statistics" is a phrase describing the persuasive power of numbers, particularly the use of statistics to bolster weak arguments. That is how Wikipedia speaks to statistics and I sense that it is also a perspective that many people take when it comes to property data.

We seem to be constantly being bombarded with the latest set of data for what we are told is the true picture of the property market in New Zealand, however given the multitude of sources and names attributed to these statistics it is often difficult to know what statistics matter and what measures you should use to tell you when it is a good time to buy or sell.

Read more.... 

 


Should a real estate agent be paid $1.5m a year in earnings?

by Alistair Helm in ,


iStock_000004004971XSmall.jpg

This week Barfoot & Thompson in celebrating the achievements of their Top 25 salespeople detailed that their top 3 agents collectively sold a total of more than 300 homes in the past year. At an average sale price of $721,000 these sales generated a total transaction value of over $200 million from just the top 3 agents at the largest real estate company in Auckland.

Now to my mind it is not important to know who these people are. They are undoubtedly successful and certainly valuable to Barfoot & Thompson as they accounted for 3% of the total transaction value of the company last year. Three people from a total of over 2,000 who are self employed contractors operating under the licence of Barfoot & Thompson.

Doing a simple calculation based on the commission rates of the company and knowing a little of the commission split between the individual agent and the company leads me to believe that each of the 3 top agents earned around $1,500,000 each last year.

Three of the top agents working for the largest Auckland real estate firm earned an estimated $1,500,000 each last year from selling real estate.

Now I will accept that these agents do employ assistants to help with the work load; after all 100 property sales a year equates to two sales a week and that is far above the average for the industry at large, at just 8 sales in a year. So let’s allow $150,000 of costs for assistants – that still means that these agents are earning around $1,350,000 a year.

That earning power puts them well inside the top 20 pay of CEO’s in NZ as referenced from the 2011 NZ Herald CEO Pay Survey.

 

CEO Pay Survey_ Salaries stall for NZ_s top bosses - Business - NZ Herald News.png
  • Earnings of $1,350,000 a year is the same as that earned by Simon MacKenzie  the CEO of Vector, a leading infrastructure company managing electricity, gas and fibre optic networks with over 500,000 domestic and commercial customers, it manages over $5.5bn of assets delivering an operating cashflow of $390m.
  • Earnings of $1,350,000 a year is over $100,000 more than Don Braid the MD of Mainfreight a NZ based global logistics company with sales of over $1.8bn employing 5,000 people. In that financial year the company made $26m in profits.
  • Earnings of $1,350,000 a year is over $350,000 more than Russel Creedy the CEO of Restaurant Brands operating 177 stores with 3,700 employees across NZ with sales of over $300m. In that financial year the company made $26m in profits.

Running a complex multi-million / multi-billion dollar business across NZ and the globe is a challenging and demanding role with the responsibility for thousands of employees, customers and suppliers not to say the accountability to a board and shareholders. Top CEO’s are paid for performance and the demands of the job. They are in demand and have global value.

Selling houses is not, let us be honest that demanding. You have a handful of customers at any one time, you have virtually no suppliers or employees. You don’t have shareholders or a board of directors to report to. Bizarrely the people who monitor your performance share in your success and yet they do not directly contribute to that success, save only for the real estate license that a salesperson at Barfoot & Thompson operates under.

I do not blame these top agents for earning $1,500,000 a year, that is just the fact of the industry. Further I do not lay blame at the feet of Barfoot & Thompson, the same situation exists for a handful of top agents at Harcourts, Ray White, Bayleys and others, each earning well in excess of $1m a year. It is just the way the industry is structured, as self-employed individual agents are incentivised through commissions. The structure of the real estate industry creates this situation.

I think the real estate industry is inefficient, I think it is in need of change. Selling a house is not a unique skill, nor a highly demanding skill. I am convinced that all of the 100 odd houses sold individually by these agents in the past year could just as well have been sold by any other agent. It is just that these agents have created a "marketplace" that they control, not though any illegal means, simply the structure of the industry allows them to be so effective and dominant.

The core fact is that these top 3 agents do not have unique skills that allow them to earn in 7 days what the average agent earns in a year! There is something wrong with this industry when these disparities exist and the consumers of the services of this industry are being stung with this cost structure.

 


What value do real estate agents add?

by Alistair Helm in


Agent with cash in pocket iStock_000016530240XSmall.jpg

There is a great line in the excellent book "What Would Google Do?" by insightful author and Professor of Entrepreneurial Journalism at City University of New York - Jeff Jarvis; in reference to how Google might reinvent real estate. He states his "enmity for agents and their oligopolistic fee structure .. it's not personal its financial!", he then goes on to say "I just don't understand the value they bring, but if you must explain your value, its not as great as you think!"

This line has resonated with me for many years. Value in any business needs to be highly visible, not something that needs explaining. Sadly real estate seems to need to justify its value-add rather than having open public advocacy of it. 

So it was with little surprise that I heard this story recounted by a friend last weekend regarding their recent personal experience of real estate service which only added to this questionable view of the value provided by real estate agents.

I do not propose to identify the agent or the company they work for. They know who they are and sadly I fear there may be other agents who may quake a little in their respective boots thinking it is them given the commonality of just such a situation.

My friend owns two properties, both within a small geographical area. They are not a seasoned property investor, merely an ordinary person who for personal circumstances recently down-sized and invested in a rental unit about 6 months ago. With the recent sale and subsequent purchase they had had contact with a few local agents in the area.

Units for Sale - Realestate.co.nz.jpg

Due to a change in circumstances in the past month they thought about selling the unit which they bought for around $500,000. As one might well do, they decided to contact the agent who facilitated the purchase of the unit for them to see what the market might be for such a unit and whether they would be able to sell quickly. A reasonable request and a useful opportunity for an agent to build a prospective business opportunity.

The agent gave a verbal response and then asked if my friend wanted a full appraisal on the property so as to be ready to market the property, my friend declined as they were unsure if they wanted to sell, it was at this stage just information.

A couple of days later the agent contacted them and said they had a buyer who had written up a conditional offer to buy the unit with the only condition being the desire to physically inspect the property. The price was good and the offer had no other conditions - seems great. However the stinger was the agent fee!

The agent wanted my friend to sign a listing agreement for the full fee of c. $20,000 before they would present the offer.

Now there is nothing wrong in the process undertaken by this agent, they have a willing buyer who they want to introduce to a vendor for which they wish to be compensated, that is fair - but the fee! The commission of c. $20,000 is the full fee - the fee typical of a full service listing with all attendant services of listing, marketing, facilitation, negotiation and completion. A process of upwards of 6 weeks worth of work.

My friend questioned quite rightly how an agent could conceive of charging c. $20,000 for providing so little of value - the response was somewhat as expected "I have to charge what our company stipulates as a fee for successfully selling a property"!

I find this situation (which I know is not uncommon) to be unbelievable on a number of levels.

1. Real estate agents regard themselves as professionals providing a service - the fee should be commensurate with the service - c. $20,000 for even a full days work is not commensurate.

2. My friend had a prior relationship with the agent and the agent knew my friend owned another property surely prospective future business opportunity would have been recognised and reflected in a realistic fee.

3. Does the agent not think that my friend would not share this experience with their friends, acquaintances and colleagues? - as they say you tend to tell one person of a good experience and 10 people of a bad experience.

4. Would not the agent have raised their professional standing and reputation if rather than going back with this one offer, instead gone to my friend with a proposal saying that they had this strong offer and recommending two options. Firstly consider this offer seriously as timing may be of priority, but also secondly why not consider marketing the property given this level of interest. The agent could have presented a full service marketing campaign together with a full appraisal of the property - very easy considering they only sold the self same property barely 6 months ago.

Real estate agents business is based on relationship and reputation and largely relies on referrals. How could anyone consider that proposing such a fee for such little work be conducive to building future relationship and business?

Needless to say my friend chose to decline the offer - their comment to me was that the experience had actually dissuaded them from even selling the property, it had left a bitter taste in their mouth - sadly "tarring all agents with the same brush".


Choosing the best real estate agent

by Alistair Helm in


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Buying and selling a home as is so often stated, is one of the most significant financial transactions anyone is every likely to undertake. It is also one of the most infrequent transactions. Most people only every buy half a dozen homes in a lifetime.

For this reason the process of choosing a real estate agent should be viewed as just such a significant decision. However it is likely that most people choose their agent with little more than a cursory evaluation, with minimal research and investigation.

Considering the fees, the seller will likely end up paying the agent in terms of commission alone upwards of $15,000 to $20,000, you would think more effort and critical performance review of individual agents would be undertaken.

Research, primarily by surveys over the years has found that people tend to rely on prior experience to select their agent. Second most common choice is based on referral from a friend. However despite this feedback from surveys; the most likely process undertaken is the subjective assessment of “who has the most presence in my area” – the agent with the high profile demonstrated by For Sale signs and profile adverts in the paper. However as the saying goes “Never judge a book by its cover” – just because you see adverts for an agent all over the neighbourhood may not mean they are the best agent, or the best agent for you. It just means they are likely to be spending the most money on advertising - themselves.

As stated in a prior article, agents are recognising the importance and value of profile advertising on property portals as they appreciate that this is where buyers are spending so much time searching property. The fact is the majority of buyers are also looking to sell their property. So it would make sense for sellers to use the web to undertake more extensive research as to the right agent to act on their behalf to sell their house.

When it comes to choosing an agent, I would recommend you approach the process in the same way you would if recruiting someone to work with you. Do your background research and then interview the chosen shortlist of suitable candidates.

Here would be my advice to choosing the right agent

1. Look online to see what houses are on the market that best match your house (price, location, type) – which agents are selling these? Recent experience of selling a similar property for a similar price in the same area is likely to direct you to an agent that knows that sector of the current market well – look for that match

2. Review the adverts for property online that attract your attention. Follow a logic – if the advert for a property appeals to you, it is likely it appeals to others by the way it has been put together. Agents that focus on online presentation of their clients listings are more likely to be progressive agents that understands the marketing process to maximize impact and visibility to prospective buyers

From these first 2 steps draw up a long list of agents, probably 6 -10 agents

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3. Check out the current listings of these agents from agent pages on Realestate.co.nz – take note of the number of listings each agent has, and how long these properties been on the market, each property shows the listing date. Be aware though that agents with a large number of listings may very well be productive, but on the other hand you may end up being a small fish in a large pond. Equally an agent with fewer listings may be a newbie, or could be may well be highly effective as they sell property quickly, equally they may not be that productive, so try and use the data to establish some performance criteria

4. At this stage you should be starting to narrow the list down to say 4 – 6 agents. You should then do more extensive research on each agent, check out their online profile. See if they have a profile on Realestate.co.nz or on their company website. Review their personal website (if they have one). Read testimonials, but as importantly look to see how they market themselves. If they are good at marketing themselves then they probably have a progressive view of marketing property

5. Don’t forget to do a name search for each of the the shortlist of agent candidates on Google to make sure there are no skeletons in their respective closet

By now you show have a shortlist of two or three, these are the ones who you should invite for an interview to present their proposal on how they would handle the sale of your house

6. Plan to invite them to come round on the same day (it is worth the time). Now I want to propose a somewhat different strategy for meeting agents, the traditional method is getting a group of agents to evaluate the property, my view is evaluate the agent first. Check out my article on evaluating your agent before getting a property appraisal. Trust me the evaluation of the property is best left until you have a chosen agent.

7. Look for the agent to give you a chance to better understand the personal chemistry between the two of you. Look for them to profile some recent marketing campaigns rather than looking for a marketing proposal for your house (that can come later). Ask about process they follow and also their reporting process. The greatest dissatisfaction from vendors after using an agent is very often the lack of reporting and being kept up to date on the process.

8. After this meeting follow up a couple of the testamonials that the favourite agent has provided – these are critical to give you a comfort to support your gut feel.

Then and only then let them carry out an evaluation and provide an current Comparative Marketing Assessment as is required under the REAA requirements. When you are completely satisfied, you have an accurate CMA, you have a detailed marketing plan and you have negotiated the commission or service fee; then and only then sign a listing agreement.

Best of luck in the selling process.