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

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

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

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

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

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

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

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

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

Updated - Friday 28th Feb 10am

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

@alistairnz Hi Alistair. There's about a 4 hour call to receive the info which includes when a listing has been updated which is why 1/2

— Trade Me Property (@TradeMeProperty) February 27, 2014

@alistairnz it seems 'pot luck' and some don't show boundary view. So today some might not show for a while while open homes are loaded 2/2

— Trade Me Property (@TradeMeProperty) February 27, 2014

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

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

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

Why has real estate side-stepped the technical transformation of the digital age?

We have long heard stories of the power of the internet and its ability to disrupt almost every business. How everyday we search online for everything we need and choose from multiple sources based on price and not on location supported by social recommendations and user reviews. How we no longer use travel agents or visit CD stores and how TV has been transformed from a linear experience to an ‘Al a carte’ experience.

Yet despite these radical changes we still experience real estate services in the same way we did 20 years ago. Sure we use smart mobile apps and the web to do the searching but this is merely  swapping one advertising medium for another. The fact is self-employed contractors with a real estate license still spend two thirds of their time hawking their service in the desire to list a property and thereby secure the opportunity (with no guarantee) to sell that property for a commission.

It is still a process based on almost the same systems and processes of 20 or 40 years ago. Still paper based agreements facilitated between vendors and buyers accompanied by hurried phone calls.

The most significant change of the past 20 years though is the cost. The average fee for the service then based on average house prices was $4,500 (in today's money $7,200). Today you will pay $17,000 for the same service.

So why have we not got an online solution that allows to evaluate different modes of selling and evaluate the capability of individual agents? Why do we not have the ability to create our own custom solution for the services we need from agents? Why does the negotiation process not happen in a secure confidential online environment with support parties like lawyers and buyers agents assisting the parties without undue pressure; thereby reaching an agreement that is digital signed and transacted? Why can we not schedule property viewings using synchronised calendars open to all parties to optimise the schedule of the sellers, the agent and the buyers?

The fact is that real estate has not changed for a number of key reasons:

• First and foremost it has not changed because the industry does not want to change and the industry is dominated by 5 major companies that account for close on 80% of all transactions. I would go further by saying that the industry has avoided change and in many ways stifled innovation.
   
• Property transactions are in the main a highly infrequent event for the majority of the people. For most property owners each such events leaves them with a sense of “having to start all over again” as all the people involve last time have moved on and the location has changed - real estate is a local business and does not represent itself the same in any two offices as agents play to the ‘personal brand’ service rather than a company brand model.
   
• Property selling and buying is highly emotive and has a high perceived risk. For this reason there is a low tolerance to ‘try something new’ - the safest bet is to do what everyone else does and sell the same way everyone else sells.
   
• Commission fees regardless of how big they are, never appear on your bank statement or have to be paid for in the form of a cheque or cash. They appear as a line item on a lawyers statement of transaction. A statement that often these days has 7 figure amounts on the debit and credit side (including a 5 figure agents commission) but at the bottom only requires you to pay a cheque for c.$1,500.
   
• Irrespective of the market conditions the commission fee can be easily rationalised away. When the property market is on fire and property is selling like the proverbial ‘hot cakes’, the logical side of your brain says “I should try selling privately, an ad on Trade Me and I’ll have people queuing up at my door to buy”, but yet you fall back on the logic of  saying “I’m so excited that my house has risen by $100,00 $300,000 or $500,000 since I bought it I don’t mind paying $20,000 to sell it”.
  Conversely when the market is dead and property takes ages to sell the logical and emotional side of the brain conspire to say “This market is way too scary for me to take a risk of selling other than through a traditional agent - I need to sell and to get the place sold will be well worth the commission”.

New Zealand real estate is in many ways not that different to many other countries in the way the industry is structured and operates. There is some degree of innovation overseas along the lines identified earlier, however we have yet to see a radical restructuring of the industry and a reinventing of the processes and charging. 

In my view there has to be a better way. There has to be a means by which greater efficiency can be brought to the process and with it greater transparency and naturally a lower cost. We cannot though sacrifice the service component nor the security of legal and principle disclosures and sureties so as to safeguard buyers and sellers in this most critical transaction. 

QR Codes in real estate - a missed opportunity?

QR codes have been around a long time, infact they were invented over 20 years ago as a means of monitoring production lines in the automobile industry. Over the years I have heard it said that "this year is going to be the year of the QR code in real estate". How it will revolutionise the industry and empower the consumer. 

In my mind and in the context of real estate it is best seen as a technology looking for a solution.

I find it interesting that it is being used in very much a piece-meal fashion by some companies in the industry - a recent copy of the NZ Herald Home supplement showed QR codes on listings from Premium and Harcourts.

The QR code on a printed ad makes sense - it can be a great "call-to-action" for access to more details of a property and that is what it does. What I find interesting, and if I may say a bit dumb is that the URL (the web address) behind the QR is not a unique link that tracks the people using the QR code but takes users straight to the listing on the company website. Try it for yourself below:

The missed opportunity by these real estate companies is the ability to analyse metrics of the users of this QR code. To be able to track how many people actually used the QR code - when they used it and from which publication, what actions they carried out on the site once they landed there, what device they used to access the information. All of this, is vital information for the real estate company to assist the vendor and buyer.

All of this capability is free and readily accessible. I created the red QR code at the top of this article at QR Stuff and I also used the Google URL shortener which provides tracking metrics, so if anyone decides to try the QR code above then I can see the details, as you can here.

Given that in principle the QR code is the bridge between the printed media and the digital media in the context of real estate and the real estate industry is so fond of telling clients how important print advertising is, I am somewhat surprised that more of the print media does not undertake to create QR codes for all listings as a free service for agents and use the data to reinforce the true value of the print advert!

The other utilisation of QR codes has been on street signs for property for sale, there has not been extensive application of this in this country but my recent commentary about the UK real estate market showed a sign with a QR code. Again it makes sense as it can provide instant digital content without having to try to punch in a lengthy URL code for the listing.

However the process of accessing a QR code on a printed sign is lengthy - 6 steps in all

• Switch on smartphone
• Tap QR scanner app
•  Tap scan
• Hold phone to sign
• Confirm link
• Access to content

Compare that to using a smartphone app like Realestate.co.nz

• Switch on smartphone
• Tap Realestate.co.nz app
• Tap 'Near Me'
• Tap the listing flag
• Access to content

5 steps so a little shorter. However the benefit of the app is the ease of use and the contextual information - once in the app you have all the other listings around you and the content is in a form best used to a smartphone as opposed to being on a webpage on a mobile device. You also in the case of the QR code need to get out of the car in the pouring rain and stand close up to the sign and focus the camera on the phone whilst passer-bys wonder if they should question your suspicious activity!

QR codes are a smart technology - I do suspect that they are not a perfect solution for real estate and I sense that there is better solution just around the corner.

Double shot interview with Interest.co.nz

I am always pleased to sit down and share my thoughts and opinions with other commentators and journalists. Today I visited the team at Interest.co.nz and sat down with David Hargreaves to what he calls his "Double shot" interview.

We covered the expected likely trends in property sales and prices based on the available data from QV and Barfoot & Thompson. We also strayed into the important topic around the real estate industry's reaction to the new pricing model from Trade Me Property - a subject I have a deep interest in.

Enjoy the interview on YouTube or read the fuller transcript has been published on Interest.co.nz

Could the agent boycott of Trade Me end up driving more people to private sales?

The old adage that ‘perception is reality’ could potentially be occurring in the minds of property buyers and particularly sellers in the Hawkes Bay and Hamilton areas of the country. For if you were a normal everyday property buyer or seller using your usual means to keep in-touch with the property market through email alerts and web browsing, what you would notice in these two regions is that there seems to be far more ‘Private Sale’ properties being advertised on Trade Me.

This increase in private sellers is the perception. The reality is that there are less agent listings. 

What the real estate agents undertaking this boycott need to appreciate is that their next client is not that likely to be reading this article (I actually hope they are) nor the other media outlets that are discussing this issue - their prospective clients are browsing the news headlines and then reading the weekly women’s magazines!

These clients pay no attention to the number of listings on any page - all they want are new listings. They continue to turn to Trade Me everyday in huge numbers to view new listings. There may be less new listings, but how are they to judge the reason for this?

They certainly are not likely to stop using Trade Me Property to browse property for sale - why should they? They have been doing it for years and in their minds eye nothing has changed. The site looks identical and new properties come on the market everyday. They are not conscious that there are less (in fact no) new properties from the likes of Property Brokers, Tremains, Lugtons, Lodge and Harcourts. What they do see is far more properties coming onto the market from private sellers.

Just compare the first page of new listings in the Hawkes Bay with a comparable region - say New Plymouth in the Taranaki. In New Plymouth the first page with 50 listings consists of 6 private sale listings - 12%. On average Trade Me property comprises around 16% private sale listings on average. Now examine the first page of 50 latest listings for the Hawkes Bay - 40 of the 50 are private listings - 80%!

To the average property buyer searching the site today the one thing they notice is less agent listings. Do they instantly think - "ah yes of course my local agent is boycotting Trade Me so I must switch across to Realestate.co.nz" or could it be they think - "ah more people seem to be trying to sell privately, this must mean something, maybe when we come to sell we should try a private sales, after all everybody is doing it and it only costs around $400 which compares to 4% commission which based on the median price in the Hawkes Bay at $279,000 means a cost to me of $12,834 inc GST".

This is the second time in the past 12 months where I perceive that the real estate industry is maybe shooting itself in the foot - earlier it was their fondness of auctions that may be their downfall now it is their challenge to fees from Trade Me - chinks in their armour they may be; but sometimes death by a thousand cuts can be fatal!

Further ideas on being a smarter buyer

In addition to the articles I write analysing and observing the property market and the real estate industry on this site I also provide observations and opinions working with John Bolton at Squirrel, the property and mortgage experts.

Here a a couple of recent articles I have written on the subject of advice in choosing the right type of house to buy and also what not to say to a real estate agent - enjoy and share!

The buying choice - Buy new or a refurb?

The allure of a new home or a recent renovation has significant appeal, however as the saying goes "all that glitters is not gold" and a wise cautionary approach might be recommended when assessing these buying options. Here's some advice tracing the pros and cons of these purchase options

The buying choice - A do-up or an existing family home

Whilst never the "shiny new thing" a good traditional family home or a property in dire need of serious work are good buying options as long as you have your eyes open and appreciate what you are getting and what you (or someone working for you) is going to have to do. Here's some advice tracing the pros and cons of these purchase options

Things you should never say to a real estate agent!

As a buyer you need to have your wits about you - you need to remember that the smiling-faced agent showing round your desired home is a wolf in sheep's clothing ready to pounce on any morsel of insight they can use for their clients advantage - here are some cautionary advice of what not to say!

TV campaigns by Trade Me Property & Realestate.co.nz

The new year has kicked off with the two competing property portals slugging it out in a marketing war to capture the greatest attention and thereby assert their respective role as the platform of choice for advertising property in NZ - or is that really the story?

Trade Me was the first to kick off with their campaign. As a company they historically have not been a significant advertiser across what is generally described as traditional media - TV, radio and print media. The exception to this has been where they have faced significant competition (as in the case of Trade Me Jobs vs. Seek) or where they have a new proposition to convey (as in the buy new retail strategy). 

The reality is that Trade Me enjoys unprecedented spontaneous awareness and engagement such that they really have no need to tell people that they exist or how to use the site or the benefits of the service.

When it comes to real estate these facts are indisputable. Trade Me is used by all real estate agents and private sellers, it is the most effective means of advertising property for sale or rent. Buyers and renters go to Trade Me first and most often to check out the properties on the market as well as being driven there by email alerts. So why is it that Trade Me is running TV adverts as well as other media?

The simple fact is this campaign is not targeted at property buyers in an effort to secure greater usage of the site, nor is it really targeted at property sellers trying to encourage them to list on Trade Me Property as the creative would suggest. They have undertaken this campaign to put pressure on the real estate industry to secure continued listing support under the new pricing model implemented late last year and ensure the threatened boycott does not eventuate. The ads are very much a trade marketing campaign using consumer messages.

There are three 15 second commercials in the campaign each supported by other media using the same animated stylised imagery somewhat reminiscent of clipart characters. This is a new creative execution very different from the new products campaign run last year and the Trade Me Jobs campaigns.

The commercial are very focused on features, rather than benefits as befits the trade marketing strategy, example being “4 times more potential buyers than any other property site or No. 1 source of property buyers”, in this regard the commercials feel a trifle wooden. Trade Me over the years has built a close affinity with the population of NZ. A warm and engaging sense of the underdog championing the individual to allow them to buy and sell anything and be in control. To do things easily, cheaply and for themselves and in so doing become a trusted place “run by good people like us”. I get none of this sense from these adverts, they seem disconnected from the brand values of Trade Me and in someways have a smugness that suggests that they are overly sure of their position and merely need to state the fact that they are the No1.

Realestate.co.nz on the other hand are launching a TV campaign clearly with the intention of building brand awareness and through that to drive traffic.

The commercial plays heavily to the mobile platform and the iPhone app as the access point to the content. Unlike Trade Me the advert does not use unique features or facts to sell the message it simply takes the generic requirement of the market and state - “browse through thousands of properties throughout NZ - anytime anywhere”.

The short time frame of the commercial does not allow the opportunity to establish a classic call to action - such as to download the app or check out specific aspects of the site. The reality is that 15 second adverts as this is, are best when used as recall ads supporting a longer form 30 second or 45 second that establish the premise of the campaign. To rely solely on the 15 second version as this campaign seems to be doing leaves a risk of insufficient impact.

Realestate.co.nz has not used TV advertising since the launch campaign for the website back in 2006 and therefore they are effectively starting out as a new brand - pitching into the wide ocean of TV viewers. This is likely to see massive dilution of the message. Given the likely budget, the money would have been better invested into media where their core audience are more likely engaged.

Not knowing the scale of the expenditure behind these campaigns it is difficult to assess the relative impact. Clearly Trade Me has a considerably larger war chest of marketing dollars and could outspend Realestate.co.nz many time over, however I doubt they will. Their campaign as stated is really targeted at the industry as a trade marketing push, in this regard merely to be doing the campaign and telling the industry about it supported by the outdoor advertising will achieve the objective of exerting pressure for industry support without a massive expenditure.

Realestate.co.nz on the other hand in my judgement are caught as the expenditure of the campaign I suspect will not be sufficient to really influence consumer behaviour or drive action. Certainly they will benefit from trade support in that they will be seen to be advertising which has long been a call by the industry. 

Overall I am left with the distinct view that the total campaign of these two competitors is a complete waste of money. The beneficiary of this campaign are as ever the TV companies. The losers the real estate industry. The expenditure in the case of Realestate.co.nz takes money away from smart investment in the site and the apps and in the case of Trade Me the expenditure is a small investment which will ensure continued usage of the site and thereby further their financial ambitions to take more of the marketing dollar from the real estate industry.

If these campaign were really about seeking to market to property buyers and sellers the respective marketing teams would have bypassed old media and looked to established deeper consumer engagement within the respective groups through online campaigns and social media marketing.