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

by Alistair Helm in , ,


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

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

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

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


Choosing a local agent

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

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

 

So which 3 agents to choose?

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

 

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

 

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

 

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

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

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

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

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

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

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

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


Previous Chapters:

1. Method of Sale

 

Future Chapters:

3. The Marketing Process

4. The Sale!


Just how competitive is real estate in NZ?

by Alistair Helm in , ,


On the face of it the NZ real estate industry is incredibly competitive. There are over 10,000 licensed agents  all fighting for just 76,000 property sales a year. That’s barely one sale per agent every 6 weeks of work, one income bearing sale - lean pickings indeed!

Some might argue that there are too many agents fighting for a slice of the real estate cake. That might well be true, but on the face of it, it certainly looks to be a highly competitive industry. Further to support this belief is the extent of marketing undertaken by individual agents eager to secure your business, all showcasing their skills and experience.

The differentiation of one real estate agent to another, or one real estate company to another in NZ is paper thin - they all have a list of glowing referrals as long as your arm and offer "Free Appraisals" as if this was a compelling point of difference.

However when was the last time you saw a NZ real estate company undertake this type of advertising?

I am grateful to Robert Brown who snapped this photo from a train in Kent, England.

For clarity let me share the text of the advert:


You wouldn't take a slow train, so why us a slow agent?

"Strutt & Parker sells houses faster than any other agent in Sevenoaks. And Whether in town or country, we achieve on average, 99% of the guide price".


Now that kind of messaging in advertising certainly gets me interested. 

To have this type of insight and performance metrics to guide my decision as to which agent to use would be far more powerful from endless testimonials that all praise the agents to the skies. 

The problem with testimonials is that they are curated. When was the last time a testimonial expresses anything but glowing endorsement? In today’s world negative reviews as part of an open dialogue of customer feedback is far from being viewed as the death-knell of a business, far from it as the honest balanced feedback is judged positively. Having rich comparative data on agent performance would be a great competitive advantage for any real estate company or individual agent.

A NZ real estate company that could deliver this performance as demonstrated by Strutt & Parker would not only be able to gain new customers, it could also attract the best agents. Such competition would certainly force other real estate companies to seek to better understand why their performance lagged behind the leader. This would engender competition in the industry. Drive efficiency and enhanced customer satisfaction.

Whilst I am sure there will be detractors to this article and this fundamental question, there is no denying the fact that real estate has metrics. Be it the days-on-market, the asking price to sales price ratio, the marketing investment vs return, or the market share of a real estate company (there is one company for which such data exists - Barfoot & Thompson). The key question is, do real estate companies hold themselves accountable to these metrics, do they want to from a public accountability perspective?

The Real Estate Institute as the industry association with the majority of licensed agents and offices as members has within its Code of Agency Practice the following clause:


Clause 9.
Ensure that all advertising and marketing materials and conduct of the Agency Member and their employees is a fair representation of all relevant facts, and therefore not in breach of any relevant statutory requirement (such as the Fair Trading Act 1986 and the Commerce Act 1986). 
Ensure advertising and marketing content does not denigrate other competitors or the wider real estate profession or practitioners. 

The second paragraph is the key as the industry interprets this (or has agreed to interpret this -based on conversations I have had within the industry) as companies and agents should not use data from the Real Estate Institute published sales data to undertake comparative advertising which would "denigrate other competitors".

We live in a digital world, one in which we can evaluate our tradespeople, our local cafe and every product we want to buy. We can use the collected wisdom of the global community to guide our decisions, so why is it that the decision to seek to find a professional to facilitate the largest transaction of our lives cannot be better informed through access to performance data?

This is not to say that the decision of the choice or agent or real estate company should be a purely objective decision, the feel and fit of the right agent is also key as are referrals but a third leg to the decision stool adds stability and surety to the decision.



Find My Real Estate Agent - a new service that falls short of expectation

by Alistair Helm in


I have recently shared a couple of posts regarding the process of choosing a real estate agent and also the recommendation to appraise your agent before you get your property appraised.

The common theme has been the recommendation to do your research and uncover who are the right agents in your area to suit your needs. Given this is so important, I therefore would have thought that a new website service with the brand name of Find My Real Estate Agent would have focused on helping people through this difficult process, sadly the website is a big let down.

The site is a purely a directory, no more valuable to be honest than the local yellow pages. The analogy is very appropriate as the site really only has one objective which is to sell agents on buying a profile for $99 a year. There are currently around 10,000 agents in NZ, sadly many have very little grasp of online, but what they lack in knowledge they more than make up for in fear of not being profiled online and this fear is what the site focusses on targeting agents rather than the sellers.

The site has spent money advertising internally within the industry to real estate agents to highlight their service and their ‘low fee’ to be profiled in the selected area where buyers are searching, however the site has yet to advertise its services to the public in general and sellers in particular. The most logical place to raise its profile would be on Trade Me Property or Realestate.co.nz given that is where buyers are, and most buyers are also sellers, however as yet no such advertising has been undertaken.

So having been so scathing, let me be more constructive in my review of the site - here are my personal view of the positives for the site and also the weaknesses.

The site does host a fairly robust portfolio of names and contact numbers of agents – currently 7,800. There are actually 8,800 active agents as detailed on Realestate.co.nz which is the most easily accessible database of agents. Agents are only profiled on Realestate.co.nz when they have an active listing, thereby making the Realestate.co.nz search function a more dynamic and relevant portfolio.

The site makes great play of the random process by which it displays the sequence of agents in an area. Yes this is honest, open and impartial. However as I will go on to highlight the lack of information to evaluate agents means this attribute is a feature, not a benefit.

The site has a simple brand name and a very clear design, although it does seem to be designed for the poorly sighted audience as it seems to like to space out the text and focus on massive amounts of blank space which means information is spread out too widely

So why do I think the site is a big let down?

The only value in the site would be if all the agents had a detailed performance history, this would, to quote the site itself, provide you with a detail of “A local specialist (who) will know the sort of buyers your home will appeal to, give an accurate price indication, and put together a smart local marketing plan”.

However this business faces the same challenge of any two-sided marketplace. What the site needs and distinctly lacks is a comprehensive and deep detail on as many agents as possible coupled with a large audience of sellers. However sellers will not use the site if there is not rich content of relevance and agents will (in theory) not be interested in spending time and money profiling themselves is there is no large audience of sellers as prospective clients.

What the site needs is more information on agents than just contact numbers. Even referrals as testimonials from past clients are not in today's more open online sufficiently credible when they are just plain text. Hard facts and data are, and should be the benchmark for assessing agents - how many listings?, what type of listings?, how many days on the market?, selling price to listing price ratio? I know that the real estate industry is very cautious about such data, but to be truly trusted and justify the commission fees charged agents need to be open to be benchmarked.


Choosing the best real estate agent

by Alistair Helm in


Confused woman iStock_000017672931Small.jpg.jpg

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

Mark Hamilton - Realestate.co.nz.jpg

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.