Do you need an agent to sell your property?
Today most real estate agents only meet the minimum educational requirement of approximately six weeks basic training to get their salespersons certificate here in NZ. There is a requirement for them do an additional 20 hours training per annum however this is very simple and at secondary school level.
In most cases the real estate agents main job once they have secured the vendors listing is to just close the gap between the vendor’s expectations and what the buyers in the market are prepared to pay for their property. Apart from being the go between with the sales and purchase agreement and manning the open homes they don’t do a lot to earn that hefty commission fee.
It is generally accepted that agents spend more time with the smoke and mirrors of self-promotion trying to get listings than they do selling properties. The reality is there is nothing they can legally say or do when dealing with a potential buyer to make them pay more than the buyer is willing to pay for the vendor’s property.
What an agent could do to help a vendor achieve a better sale price for their property is to show them how to make it more appealing to a broader section of the market. Not many agents will have this ability and it is not something they are trained to do. An astute vendor could already be aware of what is required to make their property more appealing.
The truth to being successful in real estate sales is about being charming, good at selling one self and not being phased by rejection. Successful agents are usually very good at getting vendors to list their property with them and their agency. They will often have a large network of contacts via organisations like church or sports groups and these contacts will generally like and trust them. Once they have made a few sales they can then embark on some serious self-promotion within the geographical area they want to concentrate on.
This self-promotion can range from building brand awareness by having signage in and around a location the agent and agency wants to concentrate on, to flushing out potential vendors with offers of free appraisals. It’s not just the sign on the property that helps build agent and agency brand awareness. Those directional arrows you see out over the weekend are also about building agent and agency brand awareness. Buyers don’t need those to find an open home these days with google maps etc.
Some New Zealand agents are following their overseas counter parts and starting to invest their own money into self-promotion putting their names and faces on the back of buses and bus shelters etc.
The print advertising you see in the print media in the weekends is as much about brand awareness for the agent and agencies as it is about promoting the vendor’s property to potential buyers.
Some agencies reward agents with awards for getting more vendor paid marketing (VPM) than their colleagues and large portions of this ends up in print advertising.
It’s all about being good at listing real estate to sell and having what they call in the real estate business “a motivated vendor”. Motivated vendors are gold for real estate agents. They are people who for one reason or another must sell. They are not just people who will sell if the price is right.
Often in real estate training they will talk about the three Ds. Death, Divorce and De-bank. If the vendor has been through a divorce, is under pressure from the bank or there has been the death of the owner or part owner of a property, they can be almost certain of a sale and a commission from a 90-day sole agency.
People who are thinking about selling their property will often peruse the real estate section of the paper and become more aware of the various real estate agents and agencies operating in the location of their property. This print adverting adds to the brand awareness putting those agents and agencies on potential vendors shopping list when they finally decide to call in some agents for that all important appraisal.
Being called in for an appraisal is the same as making the short list for a job interview. It then comes down to who builds a relationship and wows the vendor during the meeting at the vendor’s home where they present the vendor with the appraisal and often a marketing package.
The appraisal figure will also make a difference to the vendor’s decision so agents may make this a bit on the high side which is known in the business as “buying the listing”. It’s unlikely to be deliberately low as agents know this will see them cut from the short list immediately. Vendors perceive a low appraisal figure as an attempt by an agent to get an easy sale at a low sale price.
On a rising market a slightly high appraisal figures will not be difficult to achieve however on a flat or declining market this could be a problem and agents will then have to condition the vendor’s expectation’s down to achieve a sale.
That data base that some agents claim to have is the same group of people who are searching the various property websites for a property that meets their needs. They are the same buyers every agent has on their data base. Real buyers are proactive and search online for a property that will meet their requirements and have no loyalty to any one agent. If they see a property they like they will simply go for it, even if it’s a private sale.
The best thing a vendor can do to sell their property is to have it well presented, use high quality promotional material in places where real buyers search for property. These days in NZ Trademe property is the go to property website.
At the end of the day a property is just like any other product and the four Ps of the marketing mix (Product, Price, Promotion, and Place) apply along similar lines as they would to any other product in the market place. Getting the marketing mix right is important and the most important part of that is the actual product itself. Make sure the property is well presented and this can involve everything from weeding the gardens to staging the inside with nice new furniture from one of the many companies that specializes in staging property for sale.
High quality digital marketing is very cost effective these days. Most properties sell themselves based on their location and presentation. As previously mentioned there is nothing an agent can legally say or do to get a buyer to pay more for a vendor’s property than they are prepared to pay.
Agents in Auckland are frequently advocating vendors use auction as the best way to sell their property. This can be highly effective during a buoyant market and it is true that some competition can drive the sale price up.
During a flat or declining market having no bidders or just one bidder showing up for the auction puts the vendor at a serious disadvantage when it comes to negotiating the sale. Agents play this scenario down and make claims of being great negotiators however there is no significant benefit for an agent to get the vendor and extra $50,000 versus a quick sale so one must question their motives at the end of the day.
Some real estate agencies pay agents a bigger slice of the commission if they convince vendors to take their property to auction so it’s the best method for them and for the agencies a high volume of turnover is also better.