by Alistair Helm in Facebook
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.
I often vacillate between a fascination for the latest shiny bauble of technology and the fundamental mantra of KISS (keep it simple, stupid). So it is with real estate marketing. Great photos, contextual information that sells the real benefits of the property; forget the videos, augmented reality and virtual tours!
But every now and then a piece of technology appears that distracts you and I find myself resetting my perspective. So it was when the iPhone was launched. I could see the impact the locational capability would have upon the real estate industry and the experiences surrounding the process of buying a home.
Equally I have long held a dislike for virtual tours which thankfully have become less popular over the past 3 years as video seems to have surpassed this early multimedia presentation. I found one example online to remind me of how nauseating they are - that sense of vertigo they create as you seem rooted to the spot as the property spins uncontrollably around you. You can sense my dislike!
So when I first heard of 3-D virtual tours I recoiled in horror at the concept of these nauseating images - but with 3-D glasses!
How wrong I was, as it turned out, and what a surprise I got. I first came across 3-D virtual tours at the annual real estate tech start-up competition called FWD Innovation Summit organised by Realogy (The largest global franchise real estate company). Inaugurated last year this competition offers the winners US$25,000 in an attempt to stimulate innovation and ideas focused on real estate. This years winner at the event held in June was Matterport the makers of a new camera technology that creates a true walk-through experience for any space, but clearly of great value for home viewings.
The Matterport camera costs US$4,500 and is more a data analysing device than a traditional camera. You simply place the camera on a tripod in various points around the home and it ‘absorbs’ the images from all around and then ‘stitches’ them together to create a complete smooth immersive walk through of the property.
No 3-D glasses, no headsets and importantly no nauseating virtual tour this is a self managed drive through, so the term “3-D Virtual Tour” is actually incorrect, it is a self-guided remote viewing for a home (bit of a mouthful!).
As ever the proof is in the pudding or in this case the viewing, so to get a sense of the power of this technology have a look at this real example of a actual listing from the embedded player below. The size of the data file could take a few seconds to load and then just dive in to virtually walk around the property with your mouse of finger in exactly the same manner as if using Google Street View.
This technology is smart and has been quickly embraced by one of (if not the) most progressive real estate companies I have come across - Redfin. They are planning to utilise this technology on as many of their listings as they can as quickly as they can. This is just the type of game changing advancement that a smart real estate company should and will adopt - so who will be the first such company in NZ to adopt this and show leadership.
by Alistair Helm in Facebook
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.
by Alistair Helm in Real Estate Agents, Real Estate Companies, Property Marketing
The critical day arrives. Probably second only to a wedding or other significant event, is the day your home finally sells. In the case of our home, that day was the day of the auction on that Wednesday afternoon. Nerves were evident, as were the usual questions:
These are the common questions asked by anyone about to sell their house by auction or in fact almost any forms of sale.
But before detailing the outcome of the sale let me recap. As chronicled in prior articles I have over a series of 4 posts detailed the processes and decisions we had gone through in identifying the method of sale, choosing the agent and establishing the marketing plan for our house. Overall a carefully planned programme designed to ensure that our property was presented to potential buyers in the most appealing manner to generate interest and stimulate demand, and ultimately sell our home.
One aspect of the whole process that most impressed me and strangely (given my experience in the industry) surprised and delighted me, was the very detailed and intimate understanding we gained through our agent as to the prospective buyers. I do not know if this degree of detail is common practice but as a seller it was vital to a sense of connection to the process.
At each meeting with Blair in de-briefing the weekly open homes as well as interim meetings and chats, he shared insights and feedback on each of the key prospects he had identified from enquiry and open home visits. He referred to these prospective buyers by name. He provided insight as to their personal situation, where they lived, what they were looking for, what their expectations of price were and what aspects of the house they most liked and disliked.
Over the 3 weeks of the campaign leading up to the auction we saw insight into a total of 5 couples. The insight was not intrusive nor in any way a breach of privacy or personal confidences, but provided us with a great ability to manage our expectation and in so doing I believe added credibility and professionalism to the role Blair played. As I say, if this is common amongst agents then these smart agents in my view do themselves a disservice in not highlighting this value they bring to the process. In my opinion it is vital and truly valuable part of the real estate process.
Through the 3 weeks of the campaign we had what amounted to a virtual leaderboard ranking of prospective buyers with some surprising movements. Barely 7 days into the campaign we had what both Blair and ourselves though were the perfect couple as buyers. Cashed up from selling a property in the South Island and frustrated at living in rented accommodation, this couple ‘fell in love with our house’. They visited a couple of times and Blair talked to them about making a pre-auction offer of which they were engaged around the idea. We even were able to verify their seriousness as we witnessed them bidding at an on-site auction at another very similar property in the neighbourhood. Then things went quiet with them for 5 days only to discover that in those intervening days they had not only found another very different style of property, but had actually attended and bought it at auction! It just goes to show how little you can tell of people’s real interest or intent.
We heading into the last 7 days leading up to the auction with what Blair believed were two strong potential buyers. The property ticked all the boxes for them and they had both seen the house a couple of times. They appeared to have done their due diligence. Based on this and the belief that you have to take the market for what it is, we sat down with Blair coming up to the final weekend of open homes. Our question was ‘why do we need to do these final weekend open home viewings?’ - it seemed to make no sense, who would suddenly appear out of left-field 3 days before the auction? Blair convinced us against our better judgement to go ahead, so dutifully we tidied up and prepped the house again for what we thought would be a quiet viewing.
How wrong could we have been. A new buyer appeared, or at least a relative of a prospective buyer. They loved the house and wanted their relatives to view the house when they came up to Auckland on the Tuesday (the day before the auction) - not a problem we thought, can’t do any harm. Little did we know that this prospective buyer would go on to buy the property!
A key step before the auction was the setting of the reserve with Blair. Naturally we had developed our own view of the expectation of price and what we would be prepared to accept. As a point of note I choose not to reveal the reserve or the selling price - this is not the essence of this article. This is a matter we as sellers choose to remain confidential. The reserve we agreed on was surprisingly aligned with Blair's recommendation, or maybe it is not surprising as through the 3 week campaign he had provided a clear view of the expectations of the prospective buyers, accepting as always that buyers never want to truly show their hand when it comes to price.
The reserve price was set at a level at which we would be satisfied. Like all sellers we would wish to be blown away by frenzied, manic bidding with a stunning resultant price, way above the reserve but you have to be realistic. At the end of the day the difference between our reserve and Blair’s recommendation was less than 5% - naturally we were higher!
An unusual set of circumstances arose in relation to the actual auction day and time which meant that my wife could not attend. This troubled us as to how we would cope if we could not both be there as joint owners of the house. Our immediate thought was how to facilitate the signing of the Sale and Purchase Agreement - would we have to get a power of attorney for me to sign for both of us?
Again this is where you can be surprised about how little you know of the process. In an auction you as the sellers completely sign over the sale to the auctioneer who through a right of representation acts legally on your behalf to transact the sale at a price at or above the reserve. This document was signed the day before the auction effectively leaving us both out of the process.
This is a very interesting situation and something I sought advice on from an independent and experienced agent. His advice (somewhat surprising) was that you as sellers should not attend the auction! The logic being that in this way you insulate yourself and thereby avoid the pressure coming from the auctioneer and agent trying to encourage you to compromise on the reserve if the bidding fails to reach reserve. This is a very interesting strategy and something I had never considered. If the role of the auctioneer is to sell the property at or above the reserve and this is your wish then not being present has its merits (and some degree of risk as I am sure many agents will tell you).
So the auction time duly arrived and I was alone at the auction rooms with my wife on standby via text message (she was actually doing a presentation!)
Blair had told me in a pre-meeting that he knew that there were definitely two serious buyers in the room.
I won't take you through the chapter and verse of the actual auction suffice to say that the auction lasted 5 minutes and 24 seconds - I know that because I recorded it on my iPhone - captured for posterity! There was as anticipated, two genuine bidders. Once of the bidders clearly had a threshold which he stuck to staunchly despite the best skills of the auctioneer. The property reached a final bid which was just below the reserve. So with a pause in proceedings, the auctioneer began a somewhat lengthy and protracted process of negotiation with the highest bidder with a clear instruction staunchly adhered to from me that the reserve was fixed and not up for negotiation. The end result was that the auction was recommenced and called and the property sold "under the hammer!"
In my opinion the outcomes was a satisfactory conclusion, whereby as I have often said the price expectations of us as sellers was met by the preparedness of the buyers to pay that price - I felt that the outcome was fair and open; and neither party should have any reason to feel aggrieved nor triumphant.
So after a number of weeks of tense anticipation and nervous expectation we sat back at a well deserve celebratory dinner (actually pizza and a beer at 4 in the afternoon!) and reflected over the process. We had in our hand a signed unconditional agreement for the sale of the our house, with the deposit already transferred from the buyer to the agency rust account; thereby allowing us to move on with our lives and to close a chapter on both the ownership of this house and the selling process.
When it came to reflecting on the cost / benefit analysis of the process we did not (as is universally accepted in the process) physically write a cheque for the commission fees paid to the agency company. We did not feel the ‘pain’ of that large amount of money leaving our bank account, it was seamlessly deducted from the balance of the deposit paid by the buyers. However, we have reflected often on our decisions and the process, and we do not in any way begrudge the fee we paid for the services provided by Blair. We felt that we were professionally guided through the process without undue stress. We discovered great insight from the process and were delighted with the outcome. That chapter of our lives is over and a new chapter begins.
There are more internet connected devices in people’s hands these days than the total installed base of computers and laptops. If you add on the 440 million tablet devices to the 1.6 billion smartphones it far exceeds the total of 1.53 billion desktop and laptop computers.
Data from Mary Meekers (Kleiner Perkins Caufield & Byers) presentation at the ReCode conference on Internet Trends May 2014
We have reached this tipping point of mobile vs desktop and from here the divergence will only accelerate , especially as currently only a quarter of internet usage is on a mobile device. A few years ago we heard the phrase “mobile-first’ when describing the mindset of new tech companies, that mantra has to be a continuing theme of all business models that rely on a technical platform. When it comes to real estate advertising, there is no argument it is a technical platform that dominates real estate advertising when seen from the consumer perspective.
An interesting deeper insight into this mobile usage for home searching was highlight in data last year from the US portal of Realtor.com published in the Wall Street Journal which highlighted the profile of mobile vs desktop searching by suburb in the US. The findings showed that the higher priced suburbs saw far higher usage of mobile and that within this usage which exceeded half of all views, the Apple iOS ecosystem dominated with combined iPhone and iPad accounting for 50% of views vs. 8% for Android in these high price suburbs.
At home in NZ we have seen a number of developments to the mobile landscape over the past year with enhancements to the Realestate.co.nz app as well as the Trade Me Property app. In addition we have had the launch of the Kiwi Bank Home Hunter app and a iPad app from Open2View.
When analysing the relative level of audience to Realestate.co.nz and Trade Me Property earlier this year I analysed the performance in terms of downloads using the tracking analytics of AppAnnie which ranks apps on a top 1,000 list per country. At the time back in Aril there was no doubt that Realestate.co.nz continued to lead the field in terms of the higher ranking in new downloads, added to which its installed base built up over nearly 4 years had given it supremacy over Trade Me Property amassing over 200,000 downloads.
Revisiting the latest stats from AppAnnie though shows a very significant difference as the two charts highlight below:
Trade Me Property’s iOS app (for iPhone and iPad) has leapt in the rankings since the beginning of July from 350th placed downloaded app in NZ to an average of around the 70th most downloaded app. Meanwhile Realestate.co.nz download ranking appears to have slipped from a high of 175th place at peak in Feb / March to 250th overall place in the past 3 months.
What could have lead to this significant lift in the rankings of Trade Me Property?
I don’t actually have the answer - I will ask Trade Me Property to share their secret if I get the chance. However if I was in their shoes the advertising tactic I would have used is the new download app placement available now from Facebook and Twitter.
The sheer simplicity and contextual logic of these ad services staggers me. Both Facebook and Twitter as news and social platforms are more and more about mobile - they are also used constantly and given the profile data they have about users they can target so perfectly so as to maximise conversion and in so doing minimise advertising spam and maximise revenue per ad unit.
Look at this simple example:
Option 1 : Web advert for mobile app
Consumer experience - if on a desktop / laptop click on advert, taken to company website and the click again to app store to then sync app with mobile device. If on mobile device often face difficulty of landing page design not optimised for mobile
Cost for campaign: $4 per 1,000 impressions - company buys 1,000,000 impressions. Typical click through rate of 0.05% = 500 clicks to landing page, 70% conversion to app store and 50% conversion to download.
Result - 1,000,000 ad units, spend of $4,000 for 175 extra downloads = $23 per acquisition
Option 2 : In app download
Consumer experience - only on mobile as specifically targeted. Only shown if profile matches profile of property buyer
Cost for campaign : pay for performance vs. pay for adverts. $15 per download is far less than cost of traditional advert. Conversion rate of 10% - to achieve 175 downloads requires only 1,750 ad impressions and costs just $2,625.
This model is a win win for each party - the consumer is saved the extreme bombardment of endless ads, the company only pays for successful downloads, the advertising platform (Facebook & Twitter) shows far less adverts and attracts new advertising revenue.
This is the future of advertising and saves us from the ages old ‘shotgun’ approach to marketing. That is how I would approach the promotion of a mobile app.
by Alistair Helm in Facebook
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.
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.
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 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 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.
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.
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.
by Alistair Helm in Real Estate Agents, Real Estate Companies, Property Marketing
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.
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.
When you mention to someone the concept of photoshopping property photos you I am sure, will conjure up the idea of tinted blue skies and lush green grass when in fact the lawn is actually bare earth and the sky a dull grey!
There is no doubt that to take actual images and start re-touching them is at best, misleading and at worst, deceptive and potentially in breach of the principles of advertising and representation, especially when trying to pass off the image of the property as the real thing.
However just for a moment consider a very different approach for the presentation of property marketing which could give a whole new take on photoshopping images.
Have a look at the two images below which are featured in an interesting article from the US headlined "Real estate brokers take digital trickery to new levels with virtual renovations"
Original image
Image after photoshopping
A striking difference I am sure you would agree. The point being that real estate agents always ask buyers to "imagine" how the property might look with their furniture or with a little less clutter. Sure there are applications which can allow anyone to creative virtual images of property with any furnishings and colour scheme all through virtual reality glasses - but who wants to?
However a real estate agent / company could provide a great service where in addition to the actual photos of a property there are also a set of photos that have been professionally photoshopped to create an alternative layout or look-and-feel. The key here is "additional" - trickery as the article states is where images are replaced with re-touched photos. Enhancement of the presentation of a property could be created as an added-value service of creating "Concept Photos" for a listing - just imagine!
by Alistair Helm in Facebook
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.
by Alistair Helm in Technology, Real Estate Industry, Real Estate Agents, Property Marketing
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:
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:
4. The sale!
Image courtesy of JillySpoon Flickr
I seem to be getting more incensed by the number of articles that I read professing to foretell the trends of the property market which are loosely stitched together from a patchwork quilt of statistics. Another one this morning from the NZ Herald’s Property Editor – Anne Gibson headlines “Shortage of listings adds fuel to market”
The bye line then states “A shortage of winter house listings is putting more pressure on already rocketing prices”
From my experience and knowledge of the industry I could tell from the timing of this article it was not going to be based on the trusted sources of property data – REINZ / QV / Realestate.co.nz.
Let me walk you through the article and highlight what I think are the issues.
The primary data is from Harcourts. They report that listings across their offices in Auckland and Northland are down 38% in July compared to a year ago. Now Harcourts have more offices and agents than any other group in NZ (c.190 offices compared to c.140 for #2 Ray White) in Auckland and Northland they have 59 offices which is less than Barfoot & Thompson with 64 offices, not by much; but Barfoot & Thompson sales per offices are higher and regularly account for around 40% of Auckland sales. Therefore I would challenge the statistical robustness of the data as it is not appropriate to draw conclusions from one set of data for the whole of Auckland
What I find interesting and almost bizarre in this detail of listings being down 38% is the assumption that this is a function of the market. What happens if it turns out that across Auckland and Northland in July when the comprehensive data is published by Realestate.co.nz in their NZ Property Report that total listings are down 15% and Harcourts has therefore lost share and actually had a terrible month – without context of the total market they are leaving themselves exposed to competitive share attack!
The only really credible view of available stock and listings comes from the data of Realestate.co.nz. The website has the most comprehensive aggregation of all licensed agents and has data by month going back to 2007. This is the data of relevance. Out of interest I just checked the end of month inventory of residential property for sale in Auckland on Realestate.co.nz at the end of July was 7,263, at the end of June it was 7,461 - down 3%; compared to July last year it is actually up 7% - now these are inventory numbers not number of listings, but a theoretical 38% decline in listings would if across all real estate offices likely see a larger variance than this in inventory; unless sales volumes are up massively!!
The article then goes on to quote a single Barfoot & Thompson agent who states “(the) shortage was having an effect, particularly in suburbs close to the CBD. We are experiencing a tight market with a shortage of quality listings to accommodate our well-qualified buyers” – I am sorry but every agent says this and has a vested interest to say this. Their business model is to get listings, it is in their interest to support the view that there is a shortage and they have well-qualified buyers. Quoting a single agent and their recent sales is simply data – not insight or valuable information. Further I challenge the view that there is a shortage of listings.
The patchwork quilt of the data is then supported by Barfoot & Thompson data – not form July but from June, data that has already been published a month ago. Within a day or so we will have the latest data from Barfoot & Thompson for July, why not wait for this data?
The article ends with a comment regarding the statistics of the viewing audience of Realestate.co.nz which has seen “traffic to the site rose 56 per cent in the past 12 months, and now sees over 45,000 unique property hunters visiting every day". The fact is the traffic growth over the past year to the website is a combination of an advertising campaign coupled with significant issues within the industry between Trade Me Property & Realestate.co.nz which has significantly benefited the latter as an industry owned site being heavily promoted by agents which has raised its brand profile – not because we are seeing more demand from buyers. The data of 45,000 unique property buyers every day is at best puffery – yes certainly 45,000 unique visitors to the site of which are portion are active buyers, another portion are sellers and prospective sellers, leaving the large large majority as casual escapists – that is the nature of property websites the world over.
As to the view expressed in the bye line that we are experiencing “rocketing prices” – let the facts of this final chart destroy this myth showing as it does the trend of Auckland property prices increases / decreases over the past 6 years – the rate of increase is trending down – not skyrocketing!
At the end of the day what we see in these articles are blatant PR wars between real estate companies trying to be first to publish data which sadly gets regurgitated by copy-and-paste journalists which from one publication becomes an all-out race for all publications to ensure they also cover the story.
by Alistair Helm in Facebook
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.
