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.
Auction success is a hot topic again - however it depends how you calculate them
There is an expression I always find amusing - "you wait for what seems like an eternity for a bus and guess what two turn up together"!
Well it seems for no particular reason we are experiencing this with real estate websites. For years it was just Realestate.co.nz and Trade Me Property. Not since AllRealestate exited the market in 2008 have we seen a credible competitor to the two incumbents of this digital marketing space.
Not one but two new residential property websites and one specialist commercial property websites have appeared in the past month and I thought it would be of value to examine these new entrants and evaluate the likelihood of any of them toppling the incumbents.
The new residential websites are Property.co.nz and Rentorsell.co.nz and for commercial property and businesses for sale True Commercial.
In my mind there are a few critical components required for a property website to be a viable competitor to challenge the incumbents. These are (1) Content (2) User Experience and (3) Brand presence, so let’s see how these 3 sites stack up.
This website seems to be dominated by listings from LJ Hooker and First National - collectively it hosts just under 5,000 listings of property for sale and 270 listings of rental property. This is a very small component of the 38,000 properties for sale and 10,000 for rent across the country. Without comprehensive content then there is little to recommend the site.
The site offers nothing in the way of functionally save for what might be thought of as the very basic search. The site looks like a vanilla “out of the box” website that displays listing and nothing more. Clean it may be, but functionality wise it is a pale imitation of the leading sites.
In terms of brand presence, certainly the domain name is impressive - this would have to be one of the first and most sought-after real estate domain names. It was originally registered in 1997. However domain names and websites that are generic to the category I think are a double-edged sword as I can attest to with Realestate.co.nz - you are instantly relevant in the context of the domain name but when marketing the brand is a mouthful as you have to add the ‘dot co dot nz’ to explain what it its - compare that with Trade Me!
Overall I would judge this site to have done a good job of selling the idea to LJ Hooker and First National to get their listings, but a poor job in executing a website. I would also have to question seriously what they claim to be significant engagement through social media. Their site states that they have over 7,000 Likes on Facebook, over 400 on Google+ and over 800 shares on Twitter! The facts are that their Facebook page has 20 Likes!
This website has a long way to go in regard to the content, as of today they have 10 listings of which 1 is rental. Now to be fair they only launched today so maybe we should hold off to see how they go in the coming weeks.
When it comes to user experience I have to commend this team which is based in Queenstown. They have built a very appealing site in terms of design, very clean, focused on images and with clear details about properties. The image sizes are huge and allow full-screen presentation which can make a very basic house look great. Not only is the design to be applauded they have implemented unique functionality in their compare feature which allows for the side-by-side comparison of your saved properties.
When it comes to brand name I have to hold my head in my hands! - Rent or Sell. It has to be the most unmemorable name - it is devoid of personality and whilst it is contextual I can see why it was easy to acquire - the domain name was only registered in July this year. It would have been better to call it zwango.co.nz at least that is memorable (and you can buy it for $20 today!).
Overall I think they have the right approach to design but their future relies on hard work to get content. My advice would be go and see LJ Hooker and First National as they seem keen to support new sites with content. I would also caution them to be honest when it comes to content. On their home page they have what they title "Client Testimonials" I think these may have been ideas that they threw on a test site - they have nothing to do with their business and I would have to suggest are works of fiction.
I am grateful to an eagle-eyed reader who spotted this website from the US (WPResidence) which is identical to RentorSell - clearly showing that this is a templated 'out of the box' website designed for property. I must say that in my view it is a good design and when stacked up against the leading incumbents in the NZ market clearly shows how far this category has developed and how little we have seen in innovation and user design in the NZ market - it is long overdue!
This new site is very different from the other two in that it is not an entrepreneurial start-up built with investor money and life savings. This is a site built with the muscle of APN (soon to be renamed NZME) - publisher of The New Zealand Herald. In terms of content the site is well developed having close to half the full complement of listings on the market. This is not surprising for the Weekend Herald print supplement has for years been the primary marketing medium for commercial real estate and thereby provided the necessary existing relationship with the real estate companies.
In terms of user experience the site could not be more of a disappointment - it is clean in terms of design which is something that cannot be said for Realestate.co.nz’s Prime Commercial or Trade Me Property, but largely the cleanness is the result of limited functionality and sparse content. There is nothing new, and in someway the site has the feel just as Property.co.nz’s has of being an ‘out of the box’ solution. The site does have far a good selection of commentary and articles around the commercial property industry but that should only to be expected from a publisher of this scale. A pet hate I have of the site is the need to click a button to reveal a telephone number for an agent - why? - just so they can say to agents, we had 2 people click to find your number!
As for brand awareness, well here we have the compete antithesis to the aspiring residential sites because APN has leveraged their print and digital muscle to promote this site. They have renamed their weekly property supplement and advertise the site extensively on the NZ Herald website - that is a lot of advertising impact. As for brand name - a good domain name combining contextual relevance and a memorable name.
Overall I am disappointed in this site. The Herald should have been developing this solution in 2005 when the digital market place really took off. They might have possibly waited for the collapse of Sella in 2012 to make way for a dedicated site. All of which demonstrates a missed opportunity of massive proportion not just because the industry has been spending millions to support Trade Me Property and Realestate.co.nz over the years but in having a leading site they could have managed the natural migration of print to digital and in bundling a package of print and online advertising solutions they could have achieved leadership. I just don’t see this site being a real challenger or real threat to the incumbents despite the muscle APN could leverage and the pot of gold they could secure. They would really need to better understand their customers and the unique needs of the market to deliver this result and build a compelling site.
So in summary all of these 3 new sites are in my view doomed. Good intentions, good ambition and some small pieces of innovation. However the real reason why none of these will ever succeed is not for what I have written so far in this article, but from the single fact that none of them have a mobile app.
If I was to start a new digital property platform today in NZ I might well forego the web and launch purely as a mobile app! Real estate is a mobile experience and to not have an app is to miss the point and to show a complete lack of appreciation of the needs of the market.
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.
Valuable advice for anyone thinking about buying off the plans
I have to declare a bias here and be upfront. I am not a fan of property schemes; training courses that perpetuate the idea that property is the answer to a financially secure future, a way to make a million or any other scheme that whilst trying to sell a money making venture that is really just trying to ‘sell’ a property. Let’s face it property developers are not interested in your retirement or mine for that matter, nor are the agents who act for them. I say that not to demean them. It is just that the marketing tactics that they employ, to my way of thinking are not much better than those of a snake oil salesperson.
Sadly we all became far too aware of such schemes in the last decade as we saw the collapse of the high profile finance companies and I would have hoped that we could have learnt from that period and tried to approach these property developments in a more transparent and professional manner this time around as our major city seeks to expand upwards and create apartment living in every corner.
So with this inherent bias I was flabbergasted by an advert in the Weekend Herald last week. Leaping out from the small advert was a picture of Albert Einstein - one of the luminaries of modern times - what could he be doing involved in selling real estate I thought to myself?
The details as I was about to lean were buried in the advert - when you got to read it.
And here is where we come to the complaints I have for this advert. There are 3 major complaints and they are in some ways serious enough for a formal complaint to be made to the Real Estate Agents Authority and/or the Advertising Standards Authority.
Albert Einstein is somewhat of an iconic individual of the 20th Century receiving as he did the Nobel Prize for Physics in 1921. He is best known for his mass-energy equivalence E=mc2. What then is his likeness doing on a real estate advert?
The advert purports that Einstein had a Rule of 72 - this is not factual and irrespective of that the Rule of 72 speaks to a shorthand way of assessing the time period required to double the value of a capital sum based on a simple interest rate. If you divide 72 by the interest rate (say 10%) then in this example you get a figure of 7.2 - which is the number of years required for a capital sum to double in value if the interest rate payable is 10% based on compound interest. The reality is that the statement in the advert that “in future years the property should be worth more, much more” is neither attributable to Einstein nor to the Rule of 72.
Lastly GreenLight, is the duly appointed exclusive licensing agent for the Hebrew University of Jerusalem, who hold the rights to all likenesses in any form of Albert Einstein and it is also authorized to vigorously pursue all unauthorised uses of Albert Einstein's creations, appellations, copyrights, right of publicity, photographs, trademarks and characterisations, and to prosecute and maintain trademark and copyright registrations on behalf of The Hebrew University of Jerusalem. So I would be very cautious about using any unauthorised images of anyone on any advert.
The advert is full of speculative assertions "A city residence can now be purchased with only $1,000 down and nothing to pay for 14 months" and similarly "After finance charges, you can have other people paying it off for you". Nowhere does it say which property and where and for how much and what type of property you might get. Nor as to the risks of buying an apartment and the potential issue of arranging finance or the problems of tenancy.
No it sells the snake oil of "make a few hundred dollars a week coming in as extra income in retirement" and of course the presumption of a "long term appreciating asset"
The advert needs to be seen in context - it measures just 150mm by 90mm
And as for small print the advert manages to compress 230 words of legally required disclaimers into a space smaller than the headline - maginfying it as I have done below shows how bad this is:
In case you are interested this is what it says:
Disclaimer: Only available when purchasing an off the plan Urba or Queens Residences apartment and only apply where the Vendor accepts a Purchaser’s request for payment of the balance of the deposit (usually 10% of the purchase price) to be deferred until settlement, and the Purchaser enters into a Deferred Deposit Deed with the Vendor (if acceptance with clause 23 of the Agreement for Sale and Purchase) within 15 working days of signing the Agreement. At settlement the balance of the deposit together with the full purchase price must be paid. If the Vendor does not accept the Purchaser’s request for payment of the balance of the deposit to be deferred until settlement or, if the Purchaser elects to pay the balance of the despot by cash, the full deposit must be paid in cash in accordance with the terms of the Agreement. Capital and (not legible) values rise and fall according to market conditions, investing in property is a long term investment, not a get rich quick scheme for spectators. The information contained herein is not financial advice and should not be relied upon as such. Prior to signing any legal documents, such as contracts, you should seek independent advice. Every Precaution has been taken to establish the accuracy of the material herein at the time of printing, however no responsibility will be taken for any errors or omissions.
In my view this advert does nothing for the professionalism of the real estate industry nor does it add any value to the properties that are endeavouring to be marketed or the agent acting as a sellers agent. It's shoddy and if I had the time I would like to take a complaint against the advertiser for the latter of the 3 issues at least - time will tell if they receive a complaint and financial penalty against the first issue!
The parallels of online and offline advertising of property are clear. If you want to achieve impact then you need bigger adverts and bigger adverts cost more - this applies to a print magazine as it does to a website.
With print magazines you go from the basic 1/4 page to a 1/2 page to a full page to a double page spread to a cover page - each step more than doubling the cost until you in some cases blast through $5,000 for a single insertion.
Online you go from a standard listing to a feature listing to a super feature and in the future as likely as not a platinum super feature. Costs increase accordingly, although not to top even $1,000.
However my focus of thought and reflection at this time is not on cost but on design and user experience. I think the team at Trade Me Property need to ask themselves some serious questions. For whereas the property magazines design very consumable and appealing publications with inspiring double page spreads and cover adverts that draw you in to support these premium advertising solutions, the online world of Trade Me Property is becoming a jumble which is less likely to draw anyone in as it strives for more and more premium advertising.
I make these comments as I today I have discovered a new header advertising unit on the site.
"Best on the block" takes up the header section of the site and is appearing under all types of searches despite the property in question when you click through to the "Find out more" is actually in Christchurch.
Why would I be interested in a Christchurch property when I am searching in New Plymouth? As you can see the advert provides no location context so you have to link through to see the location only to discover as over 4,000 people have already done that it holds no relevance - adding up to what in my mind is a dumb piece of advertising.
Additionally this new block of advertising pushes down the former super feature to now place the real listings so far down the page that it takes a good action of the scroll wheel of a person's mouse to find a normal listing as the screen shot below shows.
If you then open up the map search in the header things get ridiculous - it is so far down the page that you have to scroll that you might well be forgiven for thinking that Trade Me Property was not interested in basic listings at all.
In my opinion Trade Me needs a major rethink as to design layout.
It needs to decide fundamentally if it is a general classified website where property listings and their attendant premium adverts are to be squeezed in where there is some space just as car adverts and listings and job adverts are pigeoned into the same structured architecture or if it is serious about the property space and create a new design and user experience as a serious real estate website portal. It needs to look at the best run site in the region that of Realestate.com.au in Australia to see how to lay out a website for maximum user experience matched to optimal premium advertising.
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.
Too often over the past few months I have taken to Twitter or Facebook to express my frustration at the flippant manner in which newspapers (and as this is Auckland, NZ I can really only reference The New Zealand Herald) have created inflammatory stories related to property with no other intention that to create a eye-catching headline through which to succour eye-balls and through this to satisfy advertisers or to sell newspapers to again satisfy advertisers.
Just today the article reads "Frantic Auckland buyers rushing in to snap up homes"
Here is the conversation I started on Facebook on this topic promoted by the Herald article.
To often the response I generate from the online comments are typified by this one today “Never let the fact get in the way of a good story”.
@AlistairNZ @nzherald why would they let the facts get in the way of a good story?
— Sam Vernon (@topomuel) September 7, 2014
Well I am not going to apologise for stating that I think, that when it comes to the property market and people’s largest investment and financial liability we should expect to see a more balanced and well researched insight into articles on the state of the property market from what the media likes to refer to as professional journalism, especially at a time when they seek to differentiate themselves from what they like to refer to when it suits them as bloggers.
We don't see eye-catching headlines which “never let the data get in the way of a good headline” when it comes to the NZX analysis of listed companies, yet the total value of NZ property ($725 billion) eclipses the NZX by a factor of 8 times so why should we accept it from articles on the property market?
At the core of the problem in my opinion is the fact that the real estate industry at all levels and all structures can’t seem to help itself in talking-up the market as if the industry itself was the oxygen of the market or that in someway they had to justify the performance of the market.
When was the last time you read an media article either from a real estate company, quoting a real estate company or even from the organisation representing the industry where they accepted that the market was down in sales volumes or price and was likely to stay that way for sometime to come? Too often these articles are full of justification - its because of the election...., there were more holiday this month......, the weather caused..... , a shortage of stock caused…., at this time of year sales always fall.
It is well known that real estate agents fair poorly in any rating of credibility or trust - the most recent poll had agents at 44th place out of 50 professions, rubbing shoulders with journalists (there might be the issue!) car salespeople and sex workers. When might this ever change?
The reality is it will never change as long as the industry continues to believe that they must coat every piece of data in a very sickly dose of sugar coating. Don’t they realise that the public are more and more able to access insight and knowledge themselves and make objective assessments that leaves the industry looking somewhat like a fraud. As for the media and their complicit support. I have expressed concerns as to the potential for influence by the real estate companies who let’s not forget plough million of dollars into the coffers of media companies (the newspaper companies) every month and who directly or indirectly could believe that they therefore have some right to have their opinions and sugar coated perspective promoted.
Property, rightly or wrongly as we all know is our largest asset class in NZ - a vast number of people judge their wealth and financial stability upon their family house and the small investment portfolio of rental properties they own and manage. Largely as a function of this people still continue to be attracted to this investment strategy to “support retirement” and will unfortunately continue to be influenced by these type of media articles and property reports. Let’s recognise this and see if we cannot seek out some more balance in these articles, that’s all I ask.
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.
Even in UK real estate agents disagree on property listings!
Realestate.co.nz this week unveiled its new TV commercial. It’s another execution is what has seen a barrage of advertising undertaken by the second places property portal in the past 12 months, as it has stepped up to compete more aggressively with Trade Me Property as it has weathered the wrath of backlash from it pricing model changes last October.
The new advert is funny which is a great attribute for TV advertising and reading some of the comments posted on Facebook, their followers seem to like it as well. Judge for yourself.
From a marketing perspective rather than a purely consumer perspective I have some concerns. I make these in an objective manner without bias to provide a perspective to the commentary I regularly make as to the competitive tension that exists between these two leading property portals in NZ. I have similarly made the same critical review of Trade Me Property TV advertising in the past.
This creative execution is built around the proposition of comprehensive content “The most homes in NZ”. This is the rational takeaway message that the campaign tries to convey. This message forms a part of the print media campaign and is in the voice-over of the TV commercial. However turn off the sound (which is always regarded as the acid test of TV commercials) and you are seeing the message “Realestate.co.nz Where property finds people” - a very different message and brand promise.
I have a problem with this campaign. We have a clever execution in print with the Monopoly theme - bit of humour and good instant contextual referencing. Then we have a different execution around hats - sure there is the great lyric “wherever I lay my hat - that’s my home” but it feels somewhat of a stretch. Then there is the DIY execution which I do get (just) but when sharing it with friends at the weekend most didn’t. Some thought it was to do with The Block or was Mitre 10 now part of Realestate.co.nz?
I also find a disconnect between the campaign idea of most homes for sale - being about the greatest choice, best solution when looking for property and the tag line “Where property finds people”. I know it is play on “Where people find property” - but why not say that or better still use a line which failed the complaint raised by Trade Me Property to the ASA back in 2006 “The only place with everyplace” - although that would still fail today as Trade Me Property is the only pace to find private sales.
That brings me to the major problem. This campaign is vulnerable! It could well be the case that given the revised pricing model announced by Trade Me Property in early August, the point of difference of “The most homes in NZ” will become null and void and once again Trade Me Property will claim ascendancy to the mantle of “The most homes in NZ” and these ads - the whole campaign in fact will have to be trashed.
Whilst “The most homes in NZ” has become a point of difference in the context of the competitive powerplay between Realestate.co.nz and Trade Me Property I also have to wonder if it actually has more relevance to real estate agents than to the average property searching buyer jn NZ. When they go to either portal they have no interest in the fact that Realestate.co.nz has 37,892 and Trade Me Property 31,369 nor that when searching in Tauranga there are 1,241 listings on Realestate.co.nz and 1,834 on Trade Me Property (oops looks like Trade Me has regained ascendancy there) - what people are really interested in, is what properties are on the market and for this they rely on email alerts - a process that provides no context to relative inventory as if inventory is relevant.
Let's be clear, in my mind Realestate.co.nz are smart to be investing in brand building and the results prove it - their traffic has grown faster than Trade Me Property and they have narrowed the gap from a factor of 4 to close to 2.5.
However brands are not about messages and facts, they are more around heart and minds. Brand loyalty and advocacy comes from memorable experiences and this is where some of the investment money should be being spent. Developing the user experience of the platform on both desktop and mobile. Adding killer features that are standard on property portals around the world that still allude both of these portals in NZ. These investments would be sustainable and drive brand switching which TV adverts can never do. TV adverts at best only stimulate trial.
We live in a world fast becoming fixated by feedback mechanisms. I was reading a very amusing article over the weekend from the New York Times entitled “Ouch, My Personality, Reviewed” in which the author obsesses about how her ratings score on Uber is now 4.5 out of 5 and the nightmarish possibility that if it slips to 4.0 then she may not get any more Uber rides!
We seem to be moving from a world where we as consumers, sat on one side of the fence and endlessly filled out reviews about manufacturers and service providers on the other side of the fence, immune to the possibility that those service providers might rate us as consumers. It might just come to the possibility that instead of being told by the call centre recorded message that “this call may be monitored for training purposes” we hear “this call may be monitored to provide feedback as to your response to customer services” - such data being shared with other customer service centres thereby impacting your call-waiting time!
This expansion of customer reviews and ratings has become somewhat of a web 2.1 (whatever happened to web 2.0 and web 3.0??) phenomena - a feedback mechanism that is, we are told pivotable in influencing over 85% of purchases nowadays. It seems (and I know from my own experience) that we check reviews before we buy anything - we check the ratings of cafes and restaurants, hotels and even airline seats. We certainly would not watch a film or listen to music without the collective opinion of as wide an audience as possible.
So where and how is this phenomena touching the real estate industry? Ask an agent and they will point you to their testimonials - those 14 perfectly manicured and edited references on their website - “from Mr & Mrs A of Blah Blah Street who could not speak more highly of Agent B for their commitment and professional service, how delighted they were to see their house sold so smoothly and efficiently and how delighted they were with the results”.
Now there is every possibility that Mr & Mrs A were real clients and that they genuinely did rate Agent B highly. The problem is that we as prospective clients looking to appoint Agent B have no context. We do not know when this experience took place - last month or 5 years ago? What and where was the house that the agent sold and what were the circumstances? What was the registered valuation of the property and what was the sale price? How was the marketing plan implemented and what scale of marketing was undertaken? How long was the property on the market and how did that compare with the market at the time? Where there issues and obstacles that resulted in challenges which the agent overcame?
Now certainly I am sure that Agent B would be prepared to provide a contact for Mr & Mrs A for you to call them and chat through, but again playing devils advocate how can you be sure that this client is a fair representation and not carefully curated. Add to which generally most of us, unless you happen to be a HR practitioner, like making unsolicited calls to strangers to get a reference. I wonder actually how many people actually do reference checking of agents?
The fact is real estate is not a business that actually lends itself to social reviews. The activity of service is far too infrequent which leads to too few experiences upon which to provide a rating. The client feedback is always solicited after the completed sale at which time the majority of people are in an elated state as they have got through what has been a nerve racking experience and want to celebrate - so why not show their appreciation for their agent?
It is therefore almost inevitable that all agent reviews will be positive and not just because of the aforementioned celebratory state but because most people transact real estate on such an infrequent basis that it is hard to objectively benchmark.
In someways the better agent assessment should be as I shared in my recent series of articles about selling my home - an assessment of the agents as they pitched for my business. At least making the assessment at this stage would multiply the base of reviews three fold. Ask yourself, would you be interested to meet and evaluate either of the two other agents I reviewed but did not appoint for the service I was looking for given the feedback I provided as to why I did not appoint them?
I know agents might not like this proposal just as they seem to dislike the idea of objective metrics of performance. However there is nothing to fear from not winning a client, as most businesses are discovering in this hyper-networked world of reciprocal reviewing, a negative review is not the end of your business, as long as it is not the only review. People assess reviews on balance and negative reviews demonstrate that there is objectivity in the reviewing process and the person being reviewed is at least human. The other aspect is how you respond to a negative review. Ignore it or challenge it, and it will likely diminish your profile ranking. Respond in an open manner to seek to understand how to improve in the future turns a negative review into a favourable perspective.
I have no answer to the question of how the real estate industry should move to a more transparent interaction for review and rating. I certainly would like to see more objective data around agent performance ideally around the success focused metrics, in addition I think providing a open and trusted platform for clients’ reviews of agent pitches would be a great start. Of course we may at some stage even see agents rate and review their clients.. “Mr & Mrs A could not have been a more helpful and accommodating clients, Mrs A home baking was a delight but I really wish that they could have kept their dog Bruno under better control as every time I visited, it would leap on my lap as I sat down and I was just too polite to tell them .. I hate dogs!”
