We live in an age of marketing where the five second headline will make the sale whereas the indepth analysis will completely miss the target. People want the instant fix, the immediate rewards, the rush now. What’s in it for me takes on a whole new meaning. To many people, it should be ‘What’s in it for me NOW’
So advertisements that start with “FREE” generally make me nervous. Because FREE is not without COST. Somewhere in the equation, what’s been given away will be recouped, either an an additional cost (Sorry but we didn’t mention the GST), or as a deduction of the value of the transaction (You want good service with that?)
Neither has real estate been exempt from FREE type advertising. The most common I come across is “We pay for all advertising!” Yep, that’s it, the agency will pay for advertising your home. Zip, zero, nix: You sign up and we pay to advertise your property.
To the seller, the offer of free property exposure is an attractive proposition when deciding the agency. Not many sellers will bother to investigate what the advertising will consist of; to the owner the freebie is more important than the value of cost plus additions.
But FREE is here to stay and more so as agencies compete for scarce listings.
I recently was called in to advise on a listing and was asked by the owner to quote for vendor marketing. I sensed a need and offered the seller an expensive package. During the process of going through the options, I suggested additional advertisements that I considered appropriate to the owners requirements. The vendor agreed wholeheartedly.
Lesson 101. If I had gone in there to offer as much as I could for FREE, I would have missed out on a very healthy vendor paid marketing campaign.
And the vendor would have missed out on an opportunity to profile his property in such a way as to achieve a premium price.
Sometimes FREE does really cost money. Consider what is best for the vendor before going for the cheapest option.
THIS WEEK’S PHOTO: Freeloading trains is a national past time in many countries, India in particular. It’s a safe bet to say our hero today will have saved himself a few cents, but cost himself a dirty shirt, sore hands and the possibility of a hernia.
May 23 2009 | Arrowtown and Auctions and tenders and Buyers Analysis and Market Trends and Newsletters and No Description and Social Commentary | 1 Comment »
Social network websites have been proliferating like real estate agents in boom times, so of late I have been experimenting with several to see if they have value insofar as generating leads.
I must say the results are interesting. I have serious doubts about the need for a site like Twitter, but I am ready to concede that just because I don’t need it, that someone else might just want it. Some sectors of society feel they have a better ally in a website than they do with a real live friend. But that’s OK as well. I don’t drink Red Bull either but I know some other do and have it for breakfast, dinner and tea. (These people usually have double vision and fidget incessantly)
So onto Twitter I go and I see I am in good company with other realtors. So far I have managed to attract a huge following, but unfortunately, most of the followers are female sounding names with dubious websites and ulterior motives.
YouTube seems to be better at filtering the seedier spammers and then there is Facebook, Bebo and others. By the end of this month, there will no doubt be others as well.
Will I sell a house because of my Facebook/Twitter/YouTube presence? I am not banking on it, but I will keep an open mind.
The world we live in so so connected, that I am prepared to try anything once.
And now I must go and Tweet.
May 06 2009 | Arrowtown | 1 Comment »
We have all heard about the theory of relativity: Simply described as the closer your relatives get to your home town, the more likely it is that they will drop in unannounced and ask for a free bed and breakfast.
Of late I have been putting this time honoured theory to practical use by determining exactly when a buyer will make that offer they have been contemplating about for the last … what has it been … the last four weeks.
I have devised a simple test to see if buyers are really keen on making an offer or just simply filling in time before going to the dentist for a root canal without painkillers.
I ask them to make an offer in writing.
Now I know this is mind blowing stuff and not easily grasped by the populus, but believe me, it works.
Some people look at you like a stunned mullet and others look at the ceiling, but every so often, a buyer will say “What a good idea” and so we go to print.
According to Einstein (that’s him with the tongue hanging out) time goes more slowly the faster you go. So it is perfectly feasible to go so fast during the day that nothing practical is achieved by the end of it. We are all too busy.
So I am s l o w i n g down and enjoying myself.
And whenever I take out a buyer, I make that wonderful statement on relativity:
“Well, what would you rather do? Buy this great house today or have all your relations come bludge for a month?”
Their answer is just sweet music as we go to print.
May 04 2009 | Arrowtown and Buyers Analysis and Newsletters | No Comments »
BUT YOU HAVE TO BE PREPARED TO PAY FOR IT
It’s a fair bet to say that some buyers are looking for that ultimate bargain that will justify all the time they have wasted looking at real estate over the past few years.
It’s also a fairer bet to say that most of these bargain hunting buyers will miss out and will go away empty handed to gnash and grind their teeth as the market eventually improves.
These buyers have over reacted and are now low balling the very property they want to buy with the result that vendors are dismissing these advances and hanging out for a more realistic offer. Buyers fuelled by the self belief that they wield the ultimate power because they are, umm well, buyers, will fail to see the bargain that is in front of their eyes because they are not prepared to pay for it.
Should buyers be licensed? In a way, yes, They should be knowledgeable and able to discern value for money in a property. And be committed.
I had purchaser look at one of my properties very recently and while I knew him well, I asked him how long he had been looking for that bargain he has always aspired to get.
“Six years” he replied.
“If you had purchased something six years ago, anything in fact, you could still sell it on today’s market and make a profit” I said. “What’s stopped you?”
“Well, I’ve never found anything worth buying.” said he.
“What you’re looking for is that absolute bargain, aren’t you? I asked.
I won’t follow him up. It’s not my job to convince him to buy, that is something he has to come to terms with himself, but I strongly suspect he never will.
The most precious thing I have is time, so I am using it wisely. I ask my buyers in a simple and straightforward manner these questions.
- When do you want to buy.
- Have you got your finances in order.
- Are you prepared to make an offer and to negotiate.
Their responses give me guidance as to the buyers motivation and in turn, to my ability to commit to their needs. There is no shortage of buyers so the most dollar productive activity I can do is to ensure those buyers who get to sit in my leather passenger seat are well qualified.
April 22 2009 | Arrowtown and Buyers Analysis and Newsletters | 4 Comments »
Well, 2008 has almost faded into oblivion, along with most finance companies, wealth creation societies and Labour Party Advertising executives. Still, it was a good year to be alive to witness. Sure, I saw business drop by nearly 50% in sales volume, but I am still here, still in business.
Humans are amazingly resilient; we can survive wars, pestilence, genocide and global warming, so why do we all fall down when a financial crisis befalls us? Look around and everywhere you read or see, the comments are that “2009 IS GOING TO BE WORSE THAN 2008″
Well, I am going to join up with the Flat Earth Society, at least they buck the trend. To hell with Doom and Gloom! I am getting stuck in and make 2009 an equally memorable year and I’ll be able to look back, this time next year (God willing that I am still around) and thumb my nose at all the pessimists. I Told You So!
So anyone who wants to join me can just sign up with the top six inches of your head and get an attitude to succeed. Membership of the Flat Earth Society is optional, but probably necessary as we will all need a few laughs next year to see us through.
Have a happy Christmas and spare a thought for what it really means and Best Wishes for 2009
December 20 2008 | Social Commentary | No Comments »
It was Thursday afternoon as I headed to another Open Home in a popular suburban street. It had been a good week with a couple of unconditional sales so I was looking forward to some potential buyers coming to my open home.
Signs out, flag up, house presented, lights on, register open, pen at the ready. Just a matter of waiting.
And waiting………and waiting. No one in sight.
Better check the Open Home signs just in case that street kid I saw earlier on turned them round to point the other way. Wait till I catch him; he’ll be wishing he had a paper run to go to instead of messing with my signs. No, not him; the signs are all OK. Check the Blackberry; no, all OK there too, I am at the right house at the right time. Never can tell when amnesia might strike, but it’s not today at least. So what’s wrong?
Power up the laptop and download a couple of RSS feeds. Mmmmm …. stock market taking a bit of a hit. Government backing up the banks and finance companies with a deposit guarantee, leaders debate on TV tonight. (Should be a riveting performance. Must set the alarm to wake me up before the end.)
Nothing undue out of the ordinary there. Let me check the latest news. Log on to NewstalkZB and see what’s happening. No, same old, same old.
Just as well I bought the latest edition of the “Listener” to read. So I open it at Gareth Morgans ‘Avoiding Armageddon’ article. I see he’s bagging the real estate industry, apparently we all go around buying up our vendors property and flick it on again for a profit. Then there’s the bit about our commissions being too high and to top it off, we also ‘ramp up’ the market. And so on……..
Suddenly there is a ring on the door bell and there is a group at the entrance. I go over to meet them and look down the driveway. It’s a sea of people, all cramming to get into the house. The first group spill into the hallway as I vainly try to get their details recorded in the register.
“Can I help you?” I feebly ask as they trample me underfoot.
“How much?” someone asks, not sure who, it being a bit difficult seeing clearly when you’re at the bottom of a ruck.
“We’re here to buy and buy now.” someone else shouts.
My mind is spinning, what’s happening out there I ask myself out loud.
“Haven’t you heard?” a lady asks. “Helen is guaranteeing all our savings, no matter where we put them; banks finance companies, credit unions, under the mattress, into houses, no matter where. Isn’t it absolutely marvellous! In fact the government will guarantee EVERYTHING! We don’t have to worry about the consequences of anything any more, we can do what ever and all is well.”
“This is crazy, how can the government guarantee everything. What’s happened to personal responsibility? What’s more, Gareth Morgan says this feeding frenzy on real estate is all my fault. I am duty bound to stop…………aaahrrrrrrrr…..” My protestations were drowned out by the clambering hordes as they sought to buy houses. I was caught in a cross tackle as the buyers wrestled the sale and purchase agreements out of my hands. I must have passed out as all I heard were voices in the background.
Then I woke up. My mouth was dry and my eyes unfocused. I had failed to uphold the Gareth Morgan Rule of Best Practice. I should have refused to sell property to buyers with easy credit. I shall be eternally damned.
As I came to my senses I realised that I was not the cause of the problem. In fact I was not even the problem. The real problem lies with our elected politicians who promise everything and deliver nothing. The day we as a nation reject the short term solution in favour of the long term gain will be the turning point in New Zealand history. And that date is November the 8th.
You can ready Gareth Morgan’s article by buying this week’s Listener, or by viewing online here. Gareth usually writes a really good article and is a good social commentator. His latest article is a bit of a bagging for realtors. Put it down to the bad egg he had at breakfast.
October 18 2008 | Arrowtown and Social Commentary | 2 Comments »
I have a mate who works in finance overseas. Well, till last week that was. Now he’s out of finance but that’s another story. Anyway, my mate John and I have been friends for years and like all good mates we give each other a call frequently and discuss the various merits of this and of that. Some of our conversations were gentle ribbing and occasionally a bit of hard selling. Just on a year ago we were discussing investments as the housing market was beginning to tighten up. My mate John was as usual, brimming full with confidence in the money go round that was his life.
” Hi John, how’s it going?”
“Great!, Never better. Say, Mike, you will want to buy a truckload of double ended non-revokable debt collateral bonds won’t you?” he asked.
“What’s that?” I asked, so he repeated his opening line about the truckload. Now, not wanting to appear a total pratt in front of my mate, I pretended to know what he was talking about.
“So whats the return?” I asked.
“Return? You mean you want to get paid for holding these?” I was beginning to realise just how little I understood of the rarefied atmosphere of high finance.
“There’s no return mate per se. You make your money when you sell them”
“So who’s going to by them off me?” I asked, trying to make out I really knew what I was talking about.
“No worries mate, there will be plenty of buyers out there just waiting to get their hands on this stuff. You’ll see.”
Now I could really see and I was beginning to panic. The buyers for this stuff probably weren’t even born yet. So I selected reverse gear and continued my mate’s discussion.
“Thanks mate but I am a bit stretched at present, you know how it is, mortgage payments and all that” I said, knowing full well that my mate John didn’t. He didn’t have a mortgage, didn’t have a financial worry in his head. John lived for today. Tomorrow can take care of itself.
“You’re the looser mate, you’ll regret not getting into this.” said he. “I just thought you being a mate and all that, would like to be at the sharp end of a deal.”
“Oh well, that’s my loss I guess.” as we switched our conversation to sport.
Now a year later my mate John has lost his job. His company went down in spectacular style along with his truckload of worthless debt securities. Still, John’s a survivor and will no doubt have scored himself another job before his expenses exceed income, albeit not at the same remuneration as previously.
But I am still here, still selling real estate and best of all my clients have not lost truckloads. I doubt if they have lost anything and most will simply just continue to enjoy the property I sold them.
In times like this, there is no better investment than bricks and mortar. I just wish I could contact my mate John to tell him of all my good investments, but I think his cell phone has been repossessed.
September 24 2008 | Arrowtown | 4 Comments »
I was in lengthy discussions with a buyer over several days when he finally said he was not going to buy that particular property. “Congratulations!” I said, which surprised him to say the least.
“I thought you would be disappointed at least” he replied.
“No,” said I, “I am congratulating you on making a decision”
Many people find it hard to decide what to do and use excuses to avoid the painful consequences of a decision. So they sit on the fence, don’t answer your phone (caller display) don’t return your messages and generally pretend you don’t exist in the hope that you will eventually go away.
Which many salespeople do. After all, there is only so much rejection we can take. So my buyer has made a decision, having had all the facts put out in front of him to dissect like emperors of old poking through the chicken guts looking for omens.
Has he has made a wrong call? That’s not for me to say as I don’t know all his personal circumstances. I’ll sell the property to someone else who will make a tidy profit from it in the years to come.
But back to the beginning, I have fulfilled my obligation in giving my buyer every last piece of information and letting him decide what’s best for him. I have let him go and we will remain friends. Hopefully in the not too distant future I will be able to tell him “I told you so” and he will say “I wish I had.”
September 11 2008 | Arrowtown and Newsletters | 1 Comment »
Welcome to the new week. The news from the banking industry this week gave a small glimmer of hope that the relentless increases in interest rates may well be at an end. But will any rate drop be enough to breathe new life into the sluggish real estate market?
What happened? ASB and Kiwi bank (and along with the rest of the banking fraternity) have signalled a small drop in interest rates. This is good news, but it will not be sufficient to cause buyers to abandon caution and scepticism and fling themselves at the feet of willing real estate salespeople.
But it will give them comfort that the interest rates appear to have peaked. So will buyers return to the market? They will where they see value for money. It is just as imperative now as it was before, to ensure that houses are priced to meet this market. The common statement amongst most buyers is “we’re not in any hurry” To get them to take action they need to see a realistically priced property, something they like without the fancy price tag.
What’s going to happen? It will take until after winter, but more buyers will enter the market as they gain confidence that the “bust” that was predicted turns out to be a false alarm. This will take time and patience will be required of sellers.
Weekly Comment: Interest rates appear to be stabilising, even on the verge of falling. Buyers need to act now, rather than wait till there is more competition. So do sellers need to make sure their property is priced correctly.
May 19 2008 | Arrowtown | 2 Comments »
Welcome to the new week. The leaves are falling rapidly from the trees as autumn steadily progresses. So are prices. But as with the leaves on the trees, there is a similarity.
What happened? Prices and leaves have something in common. As the seasons turn, so do the leaves fall to ground. They fall till they reach their proper level. (That’s the ground we are talking about.) But they don’t fall for long.
So too with prices. They are falling till they reach their proper level but they too, won’t fall for long. Prices will only fall so far then some astute buyer will take action. That’s what is happening now. Astute buyers are active.
What’s going to happen? I can confidently predict that many buyers will miss out on purchasing a home in this market because they will wait for prices to drop to an unrealistic level. Meantime, other more realistic buyers will see real value for money and purchase. Buyers should remember that they are not the only ones in the market and the choice is limited.
If you are a buyer waiting on the sideline for something to happen, it won’t. Buyers need to be actively researching homes and be prepared to make that all important offer (always in writing) so that vendors know you are genuine.
Weekly Comment: If you are a buyer and are thinking of making a purchase, consider the fact that as prices have dropped at least 10% already, this represents a saving of $50,000 on a $500,000 home. That $50,000 would have taken you ten years to pay back on a mortgage. Think about how long that would have taken you to save that amount. Then act.
May 15 2008 | Market Trends | 1 Comment »