Do we really need open-home direction signs?

It is funny how you get use to things when you see them all the time and then for some reason they become highly conspicuous. That is what happened to me the other week when I noticed and thought how absurd direction signs are for open homes.

Think about it for a moment. A property for sale is largely discovered through email alerts and web searches. The street sign for a property is a valuable component of the process of real estate marketing effectively bringing to attention to the property for people in the local streets and to provide a beacon for the open home. But why do we need for direction signs to guide people to an open home?

More and more people use GPS to direct them to everything they need to find when out in the car – they enter the address in the car system or on their smartphone and get directions. It is now the case that there is no excuse for not being able to find an address especially as StreetView from Google provides that verification.

Direction signs fixed to lampposts and sandwich boards are not needed. They are another attempt by real estate companies to create brand presence for their company and the agent, not the home for sale. It is time to ban direction signs for open homes, they amount to visual pollution of our street at the weekends.

I know many local authorities are clamping down on their use. Here is the situation in Auckland as defined by the 2007 bylaws updated 28 Sep 2010 (clause 27.3.1).

1. Property for sale signs – only one allowed (even if a property is multiple listed). Size must not exceed 1.5m2 and must not be above 2 metres from the ground. The sign must be removed within 7 days of sale and total elapsed time must not exceed 3 months.

2. As far as open home signs are concerned agents are only allowed to place such signs on the day of the open home or auction; one outside the property and one at the nearest street corner. Each sign must note exceed 0.28m2, which is a bit bigger than A2 sized paper (4 x A4) and must not be above 1 metre from the ground.

3. The clause that I found interesting was “The display of a real estate banner flag on any vehicle parked on a public road during open home period or at an auction is illegal under this bylaw” – I have seem many of these banner type flags over the years and did not know they were illegal.

In reviewing these bylaws I intuitively feel that the majority of signs exceed these bylaws.

• There are a lot of flags outside properties on Saturday's and Sunday's
  
  
• There are often more than 2 directions signs and often signs are larger and placed high up on lampposts
  
  
• These signs often stay in place after the open homes
  
  
• I also feel that a sign with an real estate company logo and an agent name is not actually a directional sign for an open home, its a piece of advertising as there is no arrow or even the word open home!

Just as print media is being usurped by online marketing; so smartphone property apps and GPS mapping makes open home direction signs redundant so lets clean up our neighbourhoods and make our country beautiful. 

Trade Me makes a radical change to real estate agent fees

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

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

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

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

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

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

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

Click to access the full proposal to agents

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

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

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

Will the vendors accept this re-charge?

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

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

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

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

Agents should swallow the cost - they earn a good commission so why should I pay

Agents should recharge, its up to me to decide how much and where advertising should be spent to sell a house

Thank you!

So what’s the feedback?

Have you like me, been on the receiving end of a telephone call from an agent in the days following an open home?

Too often in my experience I find I’m asked to provide what the agent describes as ‘feedback’. This is often couched in terms of "it would be very helpful for the vendor to get some feedback as to your thoughts on the selling price".

If at the time of these calls I feel confident, I have occasionally used a drop-dead response which was shared with me some months ago - give it a try sometime!  “what value is my indication of selling price, surely the vendor trusts that with your skills and experience you will already have provided a guidance of the selling price – do they really want to know that you have got it wrong?”

Whilst somewhat flippant in its tone, there is a serious side to this interchange between agent and prospective buyer. In my judgment feedback is valuable, but only in a subjective sense. It should be of great value for an agent to hear that I judged that the property was ‘bigger / smaller’ than I thought. That it was in a ‘great / dreadful’ location,. That the condition and presentation ‘met / did not meet’ expectation. These and many other similar pieces of feedback would to my mind be valuable pointers for the agent to be able to make suggestions as to other properties that might be of appeal, as well as providing vendor feedback as to how people felt about their property.

Why then is there this fixation with agents with trying to get an assessment of the likely selling price from prospective buyers? If, as is the case with most property for sale these days being marketed without a price, does the agent genuinely want you to take a stab in the dark as to a selling price? If the agent has assessed the property at say $590,000 and I say to the agent that I think it is likely to sell for $500,000 at one extreme or $750,000 at the other extreme – the question is, what exactly is the agent going to do with this information?

I don’t think they are going to go back to the vendor and say “we had a response from someone at the open home who thinks it will sell for $750,000” nor for the price point of $500,000. After all, the vendor has judged that the agent they appointed to sell their house has the requisite skills to be able to judge the current market price for their property.

Let's remember that under the Real Estate Agents Authority code of conduct an agent when taking on a listings agreement with a seller must provide a written Comparative Market Assessment (CMA) for the property. This is detailed in the NZ Residential Property Agents Agreements Guide (download copy).

This assessment must use available statistics and market knowledge to come up with a price at which the property should sell in today’s market. This CMA is not a contractual guarantee. Clearly factors outside the control of the agent, may result in the property  selling at a level above or below the CMA. Although one would hope that the variance would be small – say within 5 to 10%.

I have expressed frustration in the past in regard to the lack of pricing in the advertising of property for sale in NZ, especially the case in Auckland. Every property being marketed by an agent in NZ has a CMA assessment. It is not a registered valuation, but with the skills and requisite data available to all agents it should be the case that a CMA and a registered valuation are pretty close. Given that, and given the fact that valuations are often undertaken by buyers for finance reasons there almost seems a logic in making the CMA a price indicator for property being marketed.

Before I get a thousand emails from agents telling me that it is wrong to provide a price indication to buyer, let's be clear here – I am talking of a ‘price indication’, not a ‘retail price’. I am sure it is clear and well understood that a price indication on a property is just that - an indication. The vendor can decide to accept any offer they choose at any price they choose and having a price advertised on a property does not mean that the property can be bought at that price regardless. If there is competitive demand for a property then it could well sell for more than the indicative price if the competing buyers judge that to them, the property represents added value beyond the indicative price. Equally should the obverse occur in such as a situation where there is less demand and thereby the property sells below indicative price.

I feel this whole opacity in regard to price indications of property and the desire for feedback does nothing for the industry’s credibility for openness and transparency. I believe it is something that needs more discussion.

1st Birthday for Properazzi

Over the weekend this site passed its first milestone - it's 1st birthday. 

On Friday the 14th September last year I launched this website upon the world. At the time in that opening post I stated that I wanted to "fulfil my desire to provide a commentary on the market, some on-going analysis of the market and what I hope will be insightful and challenging opinion on the market".

In the past year I have certainly fulfilled that desire and passion. I have enjoyed the opportunity to write and share what in my opinion have been valuable and insightful articles on the property market and the real estate industry. I have enjoyed being free to state my view and shine a light on what I see as areas that need greater transparency.  

Being someone who loves data and analysis I thought I would share some of the stats of the past year.  

• 163 articles have been published
  
  
• 35,204 visitors have stopped by to read over 100,000 pages
  
  
• On average they stay for just over 2 minutes and read 2.9 pages per visit
  
  
• 83% of all traffic is from New Zealand with just under 5% from Australia
  
  
• 38% of the traffic comes from Google as organic search traffic, just over 25% come direct; with Twitter accounting for 1 in 10 of all visitors
  
  
• The split between people reading opinion pieces and insights is pretty even. The Property Dashboard is the most viewed single page
  
  
• The most viewed article is the one I wrote on commissions it has been viewed over 2,500 times
  
  
• The most valued referral site outside of Google and Twitter is the NZ Herald which has shared 2,200 visitors with me - a big thanks to them
  
  
• I have not spend any money advertising the site over the past year - thanks to SquareSpace the site has cost me exactly $317 to set up and run over the past year

Here is the Top 10 articles viewed over the year:

1. NZ real estate commissions

2.  How much does a real estate agent earn?

3. Auckland  house prices - making sense of the data

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

5.  Affordable housing solution from the UK - for under $20k!

6.  Wellington property market - latest insights and analysis

7.  Auctions - the most favoured method of sale or the favourite method of sale by agents?

8.  Let's get rid of Property CV's!

9.  Real estate is massively inefficient

10. When is an auction not an auctions? 

Thanks for your comments, your time in reading what I have written and your support - here's to the next 12 months and the year's ahead! 

When does prospecting become stalking?

I have highlighted in the past what I see as the glaring inefficiency of the real estate process. How fully two thirds of agents time is spent prospecting for business. How this entails the time-honoured but seemingly out-of-date processes such as door-to-door selling, mailbox flyers and newspaper adverts.

So imagine my reaction when for the fourth time I get a flyer in my mailbox from the same local agent. A mailbox I should add that has a clear “No Junk Mail” sticker.

It has driven me to ask the question, is this agent stalking me?

It all started a month ago when the door bell rang one day and an agent greeted me on my doorstep to tell me who she was and the fact that she was new in the area. She naturally asked me if we were planning on selling. On being told no; she then went on to ask if I could recommend her to people I knew in the area!

I was taken aback by this approach. I thought door-to-door selling went out with the advent of supermarkets, but to ask me if I could recommend her to other people!

I thought afterwards how un-productive and potentially damaging this process is. With no track record of success in the area, knocking on doors to introduce yourself to my mind smacks of desperation.

Anyway 2 days later I get a follow-up note again in my letter box – not personally addressed I should add; basically reiterating what she had told me and enclosing a fridge magnet - how original!

A week or so ago – another flyer from this agent appeared, full of statements of the 'success of the company' she worked for – 'top company' here, 'award winning' there etc – it also featured a property she had sold – not a property remotely similar to mine nor even in the same suburb – another flyer destined for the bin.

Yesterday I get a newsletter from the agent. Full of quotes from media article and economist quotes, the usual story of ‘great time to sell’, ‘loads of demand in the market’ and then a selection of property ‘on the market’ – not properties she is selling, just properties for sale.

So as I said at the beginning I feel like this is tantamount to stalking. I have a clear message of ‘No Junk Mail’ on the letter box yet she (or someone on her behalf) keeps dumping these flyers in my box. Nothing in the content of them is in any way relevant and instead of endearing her to me, I am getting frustrated and will be going to go out of my way to avoid her.

Now at this stage, I should stop and be constructive. Stop.........Pause and be constructive... OK!

So here is my advice to her. If I was in her shoes this is what I would do?

I would take a catchment area of say 100 homes across 4 streets within the area I would want to build my business. I would through access to the data of sales information from the likes of Terralink, Property IQ or REINZ which all agents have, collate all the data on these 100 properties. I would remove from this prospect list all properties that have sold in the past 12 months. I would also remove all properties that have not sold in the past 25 years. I would also remove all current rental properties.

I recon this would give me around 35 homes. To these 35 homes I would develop a personalised letter addressed to the homeowner by name with their address. Far too many agents do un-personalised communication, which in today’s digital world makes a distinct and memorable impression.

The letter would introduce myself and provide useful insight into the hyper-local market highlighting the immediate area around these 100 homes. I would present data showing the number of sales and how that has changed over the past 2 years. It would also show the range of prices and some of the properties – a quick walk around the area with a camera phone would be sufficient and give a consistency to the look of the photos.

The letter would close out with a call-to-action of my availability for a no obligation chat to discuss the best approach to marketing your property if you would be interested in selling.

For me as a recipient of such a communication I would feel engaged for the following reasons:

1. Personally addressed shows care and attention
   
   
2. Written communication rather than a door knock is respectful to not intruding and respect for people’s time
   
   
3. Insightful information shows a willingness to offer value
   
   
4. Insightful information demonstrates someone who knows their business
   
   
5. Local relevance makes it more valuable and interesting
   
   
6. Focused targeting means more efficiency and less of a scatter-gun approach
   
   
7. Offering advice rather than saying the more blunt and somewhat desperate ‘list with me’ engenders more empathy

In my mind doing the research to send such a letter to 35 homes might take 3 days work – but if I can gain 1 listing from that, it would be a good starting strike-rate, especially if the following week you target another 4 streets and another 100 homes.

I am not advocating this approach as I feel the whole process of real estate needs reinventing but given the fact that the industry is slow to change, if I were to be a new agent this is what I would do and thereby avoid being judged to be a stalking agent!

Now here is the thing!! 

Having written this article I was stunned by the coincidence for through my letter box today I received a glossy 4 page brochure from another local agent – one I am happy to identify Brent Clarke at Custom Residential. Whilst not a personally address communication the content of the brochure is spot on and whilst I have no other assessment criteria beyond this brochure I would confidently state that I am at least 10 times more likely to call Brent than the other “stalker” agent, as well as way more likely to share Brent’s brochure with other people, whilst I unfortunately will not share anything but negative experiences for the other agent.

Brent’s brochure engages me with what he describes as a ‘Local Property Report’ – something that lives up to the name as it provides a simple but compelling two pages of 9 properties per page for houses sold in the two streets that border our house – perfect hyper-local information. The brochure goes on to provide insight into what is happening in the local market with pertinent thoughts around population growth, transportation, interest rates as well as building consents.

This is smart marketing – providing valuable insight, a demonstration of professional knowledge. Such a contrast to the desperation of door-knocking and endless flyers and of course, lets not forget that fridge magnet!

Property Market interview with NZ Herald - September

The beginning of each month spawns a whole new set of property data. The NZ Herald has invited me into their studios to chat through the key factors affecting the property market at this time. Here are the key topics discussed with Chris Daniels, the online editor.

1.         Latest property price data from Barfoot &Thompson the largest regional real estate company showed average prices easing over the past couple of months – indication of a continuing trend of easing or a restbite before a resurgence?

2.         The Reserve Bank LVR policy, what impact this will have on first time buyers, will its effect be on Auckland where the concern is or could the effect be felt greater outside of Auckland?

3.         The seasonal effect, coming into the Spring period when people traditionally think about moving – what impact will this have this year given the strength of the property market through the winter period?

4.         Auctions – the speculation around the continuing focus on Auctions as the preferred method of sale and the facts around some real estate companies offering incentives to agents when they succeed in securing a listing as an auction sale

The video can be viewed below or on the NZ Herald website

Industry Authority issues warning over 'Quick flick' auctions

It all started earlier this year as the active Auckland property market came alive and auctions became the guaranteed process to sell every property or so it seemed. At the same time as buyers became more desperate agents decided to shorten marketing period from the usual 3 to 4 weeks to a matter of 2 to 3 weeks.

Then of course we had that much publicised  'Quick flick' auction with a marketing campaign of 33 hours roundly defended by the real estate industry.

Whilst the industry locked arms and stated that they were merely responding to the demands of the market and serving the needs of their clients - the sellers of properties, the Real Estate Agents Authority (REAA) in their role as overseers and licensors of the industry reflected on this behaviour and when questioned in the NZ Herald article stated:

That the situation raised "significant concerns".

"The practice is not one that the authority encourages and one that we would strongly urge any vendor or purchaser to take legal advice about prior to entering into," she said.

"From a vendor's perspective, an issue is raised as to whether (they) could receive the best possible result from such a limited marketing campaign.

"For any short marketing or sales programme, the vendor should have been given adequate time to ensure they are well informed about the decisions that are being made and the potential consequence of those."

Over the past month the REAA has reflected further and just this week they have sent out  guidance to all licensees on this issue. In an email sent to the industry last week they stated:

“There has been some media attention recently about property’s having very short advertising periods and being sold within days of being listed. While this may be a sign of the times in some markets around the country it does raise some concerns for us. We are concerned that the marketing period may not be long enough to achieve the best results for the vendor and that prospective buyers may not have enough time to do their due diligence and get legal and technical advice. As licensees you must point out these risks to both the seller and the potential buyers, and of course you must continue to meet all of your obligations under the Act and the Code of Conduct.”

— Real Estate Agents Authority - Sep 2013 Update

I am pleased to see this communicate from the governing body of the industry. They have not made changes the code of conduct but I see this as a valuable communication especially as they make the point that licensees must consider the needs of buyers to ensure they have the appropriate time to undertake due diligence. Too often we only hear the needs of sellers being expressed by agents.

Auctions now judged to include pre and post under-the-hammer-sales

Some months ago I wrote an article entitled “When is an auction not an auction?” highlighting what I thought was a misleading practice of the reporting of completed auction sales which were not sold under the hammer.

At the time I highlighted the advert published by Barfoot & Thompson which proudly proclaimed “593 Successful Auctions. All in April, all in Auckland, all by one company” That style of advert has continued to be published each month since then confidently stating the number of ‘successful’ auctions as the sum of those sold under the hammer, together with those properties sold pre-auction and those sold post-auction.

That article attracted a couple of encouraging comments supporting my view that the advertising was misleading. Encouraged by these comments and my own sense of principle I decided to file a formal complaint to the Advertising Standards Authority (ASA)  regarding the advert and subsequent adverts.

I filed a complaint stating that under the Rules and Code of Ethics these adverts were misleading and likely to deceive consumers into believing that the number of 'successful' auctions were more than the facts show.

The Complaints Board of the ASA judged that there was a case to answer and the board deliberated over the claim at a session held in August. The outcome of that hearing is now public record and accessible on the ASA website.

The outcome was that the complaint was not upheld

I was disappointed in the findings of the board. I respect the process and the organization. i do not intend to appeal the decision. The complaint is public record and the full decision can be read via a download file of the full written decision, if you are so inclined.

The summary of the decision of the board in not upholding the complaint was that "the advert should be read as a whole and on an objective basis, not only taken on part". That is to say they judged that the full analysis of the sales conducted pre-auction, under the hammer and post-auction were satisfactory to provide explanation to the headline and therefore the headline was not misleading.

Choosing the right marketing plan to sell your home?

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

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

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

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

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

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

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

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

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

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

Incentivising agents to list properties for Auction

The real estate industry keeps telling us that auctions are the best way to sell a property in today’s market. They reiterate that Nationally 20% of properties are sold by auction and in Auckland that number is 40%.

Leaving aside whether those numbers are truly reflective of a successful sale at the fall of a hammer at an auction, there is another side to this Pied-Piper-like behaviour by agents to encourage sellers to choose auctions. It is simple and yet not as well reported as the “success rate”.

Real Estate agents are being financially incentivised to persuade vendors to go for an auction.

I have been provided with information that shows that a real estate agent listing a median priced house in Auckland today could earn an extra $2,000 by gaining the listing as an Auction than as a standard Sale by Negotiation. The extra $2,000 would be in addition to a standard earning of $5,300. That is, in effect a 40% bonus incentive to list a property as an Auction.

Here are the facts.

The sales commission payable by the vendors for a median priced Auckland property today would be $20,528 inc GST based on a $600,000 sale price.

It is likely that on average the real estate company will pocket 40% of this commission ($7,140) and then distribute the balance ($10,710) to the agent or agents involved in the successful sale.

If the agent who lists the property, also successfully sells the property with no other agents acting for or introducing a buyer then the sole agent will pocket the full $10,710.

However, if as does occur especially in larger companies and as a function of the heated property market, buyers are introduced to properties by eager agents, then these agents described as  "selling agents" are entitled to a split of the commission with the listing agent. 

This is where the real estate company leverages that incentive. If you list a property as as a standard 'for sale by negotiation' or as simply a priced property and the subsequent sale involves a separate 'selling agent', then you as the listing agent pick up just 50% of the commission – you take home $5,355, and the selling agent picks up $5,355.

If however you persuade the vendor when you list a property to take it to an Auction sale (or a Tender) then you as the listing agent will receive not 50% of the commission but 70% - allowing you to take home $7,497 with the selling agent getting just $3,213. Therefore as an agent listing a property as an Auction in a way secures you a higher guaranteed income than as a standard listing.

Now there is nothing wrong, illegal or unprofessional with companies providing sales people with incentives to encourage performance or direct outcomes that suit the company – that is human nature and how commerce works and has done for centuries. However when it comes to selling a home there is a deeper principle of conduct that should be paramount above and beyond the personal financial motivation of agents and their bosses. After all their clients as vendors of houses look to agents to advise them on how to sell as vendors are not that aware of the best approach.

That is why the Real Estate Agents Authority, the governing body that oversees, regulates and administers the industry in their latest update to their Code of Conduct specifically included the requirement for agents to disclose to their clients any financial benefit they may receive as a result of a choice in how to sell their house.

Clause 10.5 of the Real Estate Agents Act (Professional Conduct and Client Care) Rules 2012 states:

Before a prospective client signs an agency agreement, the licensee must explain to the prospective client how choices that the prospective client may make about how to sell or otherwise dispose of his or her land or business could impact on the individual benefits that the licensee may receive.

Are agents actively informing vendors when they recommend an Auction that they may be receiving a benefit in recommending this approach to selling? – who knows, it is a legal requirement of all agents to make sure they do.