The Unconditional Blog

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Archive for the ‘Online marketing’ Category

43

Auctioning of property certainly growing in popularity (Updated)

Posted on: August 11th, 2009 | Filed in Buying / Selling a home, Online marketing

istock_000009029079xsmallThe media has been carrying  a number of stories recently to the effect of the rising number of auction sales – primarily as a reflection of a more active property market – “Sharp rise in Auctions” was how the Press reporter captured the mood of the 80 auction bookings last month in Christchurch through the Harcourts franchise of Grenadier.

However the question that article triggered in my mind, is how many auctions are there at any one time and what has been the trend over time?

Well the latest data certainly shows that the facts seen in Christchurch are reflected nationally.

In June there were 1,002 properties listed which were being marketed as auctions – that was up a whopping 160% from June last year and exactly double the number listed in June 2007 – at the  very last breaths of the property bubble. July has continued that trend with a record 1,331 properties listed as auctions, an 180% increase year on year.

Going back over the past 2 ½ years shows no single month with as many auction listings – closest was March of this year at 826 and March 2007 with 816.

Property listed for auction July 2009 realestate.co.nz

This chart above certainly highlights the steady rise of auctions as a preferred method of marketing properties for sale – 12 months of steady growth (as a % of all listings) rising from 3% last June to 12% in July of this year.

Auctions despite this data are not the predominant form of marketing nationally or regionally. In July over 50% of all auction listings were in the Auckland region, add to that the Canterbury region, Wiakato and the Bay of Plenty and you have an average of 8 out of 10 of all auctions. These same regions only account for 6 out of 10 of all homes for sale – clearly auction sale is not as popular in some areas of the country as others.

Wellington for example accounts for 6% of all new listings, but just 3% of auctions – clearly auctions as a marketing strategy is not universally adopted around the country.

The most popular and therefore favoured pricing strategy for new property listings is a Fixed Price – fully 60% of all listings over the past month were listed with a fixed price. By negotiation, offers and POA (price on application) accounting for a quarter leaving the options of tender and auction with 3% and 12% respectively.

Pricing method for new listings July 2009 realestate.co.nz

Update 12 August

A valuable comment on this post has prompted me to share some richer information on auction listings. The question was asked as to whether the rise in auction listings could be attributable to the rise in mortgagee properties being listed of which the vast majority are auctioned. At this time there are 353 mortgagee listings on the website. A figure that represents aound 0.6% of all listings.

The chart below provides a clear view that even removing these mortgagee listings the number of new listings coming onto the market being marketed through an auction has risen significantly during the past couple of months.

Property listings being marketed as auctions, all mortgagee listing removed NZ property realestate.co.nz

1

Most innovative US broker award – 2009

Posted on: August 9th, 2009 | Filed in International, Online marketing

inman-innovator-awardsAt the Inman Connect conference held this week in San Francisco a number of awards were handed out in what was a very short ceremony – the focus of the conference is on content, discussions, networking and innovation.

The award that interested me was the award for Most Innovative Broker or Franchise Award. The nominees for this award were diverse from the traditional major franchise of Coldwell Banker to the innovative new major franchise of Better Homes & Gardens; as well as leading regional players such as John L. Scott. Additionally the innovative online realtor Redfin was nominated as well as @properties a Chicago based realtor. However despite the competitive challenge of these major players the winner was a small brokerage from Charlottesville, Virginia – Nest Realty.

Reviewing their website tells me a lot about them and from within the industry more importantly tells me about their understanding of the property market and the role of a real estate agent / broker.

Nest Realty Group - winner of Inman Innovation award for realtor 2009Their website does what so many fail to do – engage with me as a prospective client in the context of the area.

For someone who has never been to Charlottesville and lives some 13,700 kms away, I can within a few minutes not only get a great sense of the city and the community, but also a clear sense of the local property market.

These are in my mind the key determinants of a great real estate company website. Too often real estate companies see their website purely as an advertising billboard for their clients properties, when the more likely scenario is that the reason comes to a company’s website is to discover more about who the company is, what they stand for, what knowledge and expertise they have and why I should select them to market my property.

This website certainly provides a property search facility, but importantly it does not compete with the primary role of providing information and insight in to the areas – why would you consider living there, and where to live. The conversation and dialogue is facilitated through a great integrated blog which is titled the Nest report and it is to here that interested clients would go to search out rich information on the market, the trends and key indicators.

So my congratulations to Jonathan Kauffman and the whole team on their success – well deserved and hopefully you can provide a benchmark for others to measure themselves against.

2

Incentives to stimulate property sales come in many forms

Posted on: July 15th, 2009 | Filed in Buying / Selling a home, Online marketing, The lighter side

I was amused to see over the past month a couple of intriguing offers by real estate agents and their clients to stimulate the purchase of property.

House for sale with Ferrari - Lt DunmowIn the English village of Little Dunmow if you were to be in the market for a 4 bedroom modern built house for around £450,000 (NZ$1.18 million) you could be motivated by the fact that in the garage you will find a very nice black Ferrari Mondial QV Spider.

The owners have decided that a new life in France beckons and therefore as reported in the local paper have decided to part with one of their classic cars to ease the sale.

The property was listed over a month ago and is still featuring on their agent’s website so unfortunately it does not look like the offer has found the perfect buyer as yet!

Kawau island property for sale with Farr 727 yachtBack here in NZ, not to be outdone; should you be interested in a holiday home away from it all on the beautiful island of Kawau then you may be interested in this classic 1933 built property which is in original condition and comes complete with a Farr 727 moored on the property’s private jetty.

Certainly the Kawau island property appears to justify the need for the incentive of a yacht as a critical part of the purchase to get to and from the mainland whereas the Ferrari is closer to an straight out incentive – either way a novel approach to real estate marketing.

8

The mass market is dead. It committed suicide. Google just handed it the gun!

Posted on: June 18th, 2009 | Filed in Online marketing

Jeff Jarvis - what would Google do?This striking headline comes from the excellent book “What Would Google Do?” by Jeff Jarvis.

It speaks to the reality facing most company’s marketing departments and advertising agencies – the hey day of mass market advertising typified by saturation campaigns on the 3 main media of TV, radio and print are over and replacing it is the era of the ploriferation of niche markets each appealing to a unique targeted group of individuals.

This new landscape which is the web; is where people’s attention is going and with it should be, those companies wanting to talk to these highly targeted audience groups. The trouble is the uptake is slow and the creativity (of targeting) poor.

The latest figures released by the NZ Interactive Advertising Bureau showed that in the 1st 3 months of 2009 $49.26m was spent online an 8% increase on last year. Now put this in the context of the advertising world at large which is being pummelled by the dual impact of the great recession and fast declining readership / viewership.

This makes the online story all the more relevant, especially when you see that the latest data from newspapers showed that they suffering as the largest casualty in the advertising war with an 8% fall.

When it comes to real estate – this industry still seems hell bent on hanging on to newspaper advertising as the lion’s share of spend.

It is only now really taking babys steps towards online for marketing properties, a cautious estimate would put total real estate advertising spend online at around $8m per annum, which would amount to not much more than 7% of the total spend. This despite the fact that 80% of buyers use the web as the #1 source of property information.

The web is the powerhouse of lead generation for real estate. The famous quote from Sami Inkinen highlighted last year is worth repeating:

“I can’t find a single large real estate brokerage firm in 2007 that says print advertising really works….but I can easily name dozens who still spend the majority of their ad budgets on newspapers. It’s like a chain smoker battling lung cancer, while still smoking two packs a day.”

This quote is very reflective of a quote from Jeff Jarvis’s book:

head-in-the-sand“Advertisers, addicted to one-stop shopping, still spend huge budgets on TV that are way out of proportion to the time the audience spends there versus the time we now spend on the internet. That can’t last forever. Soon, agencies will have to work for a living. Instead of reflexivily buying slots on primetime TV, they will need to put together networks of smaller media with smaller audiences that add up to a critical mass, This approach is harder but more targeted and more efficient. Why advertise diapers on a show I watch – next to my teenage kids – when instead Pamapers can now advertise on mommy blogs?”

How the behaviour of the real estate industry mirrors the approach of advertisers!

I still remain staggered by how easily real estate agents gravitate in a classic reflex manner to print media for advertising listings with no objective data that says this property was seen by x number of people over the parts y number of days.

Compare this to the data on a listing on realestate.co.nz – and as an example have a look at this one – it has been on the market more than a month and in recent weeks has been seen by around 50 people a week, but over the past 10 days when as part of premium featured listings the property has been viewed on average just over 100 times per day. This high profile featuring costs far less than the price of a half page advert for 1 day in newspapers or magazines – our offer is for 14 days – 24 hrs per day!

Could you ask the property magazine or a weekend paper to be able to demonstrate such performance? – you could ask! – but would they be able to provide such information – no!

All they can tell you is that the paper (in total) is read by over x thousand people – that statistics being from a survey undertaken by a research sample some 9 months ago!

It is time for the real estate industry at large to wake up to the power of the web to radically change the landscape of property advertising, especially as it is often the seller of the properrty that actuall pays for that full page advert in the property paper section having been recommended by the selling agent!

7

It seems that property transactions are too important to be left to online auctions

Posted on: May 25th, 2009 | Filed in Buying / Selling a home, Online marketing

In some ways I wish I did not have the need to write this post – for the owners of the 20 acre farm in the Catlins I feel sympathy, they were looking to use innovate marketing to try and sell a property and move on to a new life – something many of us may wish for. However this is not going to happen (at least not today).

trade-me-tractor-sale-complete

The $1 reserve auction for a tractor with the added bonus of a 20 acre farm thrown in has fallen through – the winning bidder denied the necessary financing. The owners now left to wonder what to do – naturally Trade Me is doing all it can to rally round and provide an audit trail of the winning bidder and try and secure interest from those that were outbid.

I have no wish to say “I could see that possibility eventuating” – but I did in my recent post highlight what I saw as vulnerabilities of property buying succumbing to the euphoria of novelty marketing.

What is very interesting is the attempted parallels between this online auction and a physical auction – the best intended attempts by Trade me to rustle up secondary bidders – the only difference here is that those bidders were bidding with full knowledge that the property was “on-the-market” and the reserve had been met – they judged that they had made their full and final bid – happy to let the winning bidder complete. It is not so easy to just try and turn the clock back and re-create the events of last week again.

This property and the tractor were not sold online and a 20 acre section of the Catlins is back on the market – the local Harcourt’s agent Kylie Anderson is happy to take enquiries.

4

Property buying should never succumb to the euphoria of novelty marketing

Posted on: May 21st, 2009 | Filed in Buying / Selling a home, Online marketing

Whilst attending the annual Harcourts conference this week I got into a conversation with the manager of their office in Gore – the topic quickly focused on the much publicised auction on Trade Me for the 20 acre farm being marketed as a “Buy a tractor and get a 20 acre farm for free“.

Trade me auction $ reserve for a tractor with a farm for free

He helpfully highlighted the fact that this property has been actively marketed in the past and is in fact still being marketed by one of his team on our website as a 20 acre rural / lifestyle section in Owaka. The listing is marketed with a fixed price of $230,000 – this listing price actually being lower than the current bid at this time for the “tractor” on Trade Me, standing at $233,032.

Whilst I wish the vendors of this section of land all the best with their auction, and applaud their innovation in creating a mechanism which has generated so much interest, both domestically and internationally, such that the listing has so far been viewed over 228,000 times with over 1,000 questions – I do have some sense of concern which I felt needed highlighting for the benefit of interested property buyers and sellers.

Here are my comments:

  1. This is an auction for a tractor – not the land. The listing does state correctly, as does the Trade Me terms and conditions, that the “Contracts for the sale of land must be in writing to be legally enforceable” – land in this sense is both bare land and the land in the context of the legal title for a property. This is why Trade Me ceased operating online auctions for properties a number of years ago.
  2. The terms and conditions of the Trade Me website state that “If you are notified that your bid had been successful, you must complete the transaction in the manner specified. By making a bid, you warrant and represent that you have the legal right to enter into and complete the transaction”. This does not mean that you are as legally committed to transact the sale as would be the case in a Sale and Purchase Agreement required of the purchase of Property or land. Sadly it does occur from time to time on Trade Me that auctions are not completed after the auction has finished.
  3. Whilst the novelty of this auction has caught the attention of the public and the media, I am of the fervent hope that the winning bidder does go through with the purchase and fronts up to complete the legal Sale and Purchase agreement.
  4. Additionally, it is important I believe to highlight that any success (or perceived success) of this auction will lie not in the mechanism itself but in the novelty of the mechanism, lest we should suddenly see a raft of similar offers: “buy this car and get a house for free” or “buy this boat and get a free beach-front house for free”, especially if those were marketed as $1 reserve auctions.

The fact is that the transaction of any form of real estate is a complex and challenging process. The market for real estate is very illiquid – meaning there are not a lot of buyers and sellers. Equally, real estate is not homogenous – that is to say that whilst there are at this time four International 574 model tractors on Trade Me, all of which are identical save for the age and condition, almost every property in NZ is almost completely unique given location, size, construction, form and condition. It is for these reasons, not forgetting the scale of the financial considerations, that real estate purchases need to be carefully assessed. It is far too important to be left to the euphoria or hype of an online auction to sway the proceedings.

Some vendors may be under the mistaken impression that online auctions are no different from on-site auctions. Nothing could be further from the truth: on-site auctions are handled by trained professionals who go to great lengths to ensure all those bidding are made aware of the legal implications. The auction is undertaken by a licensed auctioneer and on behalf of a licensed real estate agent who has a legal contract with the seller for whom they are acting. The auction can be halted at anytime to ensure all parties are fully apprised of the facts and any questions asked – there is certainly no looming deadline for bids!

So whilst I am not intending to stand in the way of the progress of innovation in the marketing of real estate – I think it is important to bring some transparency to ensure that the hype surrounding what appears to be a “sure fire winner” for all parties does not become a sad tale of future dreams crushed under the heavy burden of reality. Property marketing and sales is a challenging and complex process which brings together willing buyers and willing sellers, and endeavours to create an acceptable agreement.

I wish the vendors of this 20 acre section all the best with their sale as it reaches a close on Sunday. Equally, I trust that the bidders participating in the auction have fully researched this land; that they have ensured they are making informed decisions behind every bid; and then they go through with the sale, should they be the successful bidder.

3

Corporate blogging – a personal perspective

Posted on: May 15th, 2009 | Filed in Online marketing

Blogs in blueI enjoyed the opportunity this week to be part of a research project undertaken by a PhD research student from Otago University who was keen to interview me as an insight to her doctoral thesis on “The Strategic Value Of Blogging: How Do Companies Assess Blog Equity?”

The interview provided me with an unexpected opportunity to reflect on the motivation for my passionate writing of this blog.

I believe a blog is far more than a dialogue as a means to profile or document the industry sector that we operate in. This blog is a powerful means of expressing an openness and transparency to the principles of our company, and through that in some ways to the industry sector of real estate.

I believe that demonstrating this openness builds confidence and brand equity far above any other form of marketing.

For me the inherent values of a great blog are Transparency, Accessibility and Authenticity – a blog needs a voice and that is why I am not a fan of “multi-authored” blogs, the consistent representation of the tone and language of a blog is what attracts and retains an audience to a blog.

The research interview provided for some challenging quesions – like for example the issue of succession planning – just how might this blog look in 2 or 3 years and given my point in regard to the authenticity of a blog being allied to a person, how can you manage the succession of a blog? That is the for the future, for now I am happy to continue writing this blog – sharing what I hope is insightful and valuable information and at times opinion on the real estate market in NZ.

This blog is now just over 18 months old and in that time I have written just over 220 articles and attracted 1,600+ comments. This dialogue and information resource I hope has proved and will continue to prove of value in the future with the express intent of informing and empowering buyers and sellers in property purchases and in so doing aide the smooth operation of the real estate market.

4

The power of social media – working for real estate

Posted on: May 4th, 2009 | Filed in Agent Tips, Online marketing

blogNearly 2 years ago at a international conference a delegate shared her experience of social media with the audience. She was new to real estate and had been operating in the Reno, Nevada market for just 18 months. Then back in 2006/7 she had had an excellent year with over US$200,000 commission; what was most interesting though was that 80% of her business came  from her blog.

At the time my knowledge of blogs was limited to being a casual reader – however in those few days of the conference I became a convert to the power of blogs and the applicability to the real estate industry. The logic I saw was that blogs were clearly an effective tools in search engine marketing and optimisation, but more importantly real estate was a topic of conversation that would have very broad appeal.

Over the next few months working with the development team we transformed the approach of the site to launch the blogs which over the past 18 months have been powering our website to ever growing heights of awareness and relevance. Compared to that period back in late 2007 the website has grown in traffic by a staggering 47% – from around 250,000 unique browsers per month to the current level of 365,000 as evidenced by the latest monthly traffic report by Nielsen Online.

A growing driver of this traffic has been the Unconditional blog and the Voices blogging platform which has enabled NZ real estate agents to create their own blog and in so doing demonstrate their openness and ability to show their local expertise and subject expertise. From humble beginnings the blogs have now reached a reasonably significant scale as demonstrated from the data below.

realestate.co.nz social media traffic to Apr 09Collective traffic on a monthly basis has now surpassed 20,000 unique browsers and continues to grow with the Voices platform now exceeding the traffic to Unconditional. As a point of note the “blip” in traffic in July last year on Unconditional was due to the referral link from a dutch blog which was amused at the translation of their own blog post regarding what they saw as cheaper cost of buying property in NZ.

Powering this growth in the Voices platform is a passionate and active circle of real estate professionals who have established a loyal audience within their local markets as they demonstrate an openness and capability to be that much needed “go-to” person when it comes to real estate in the local market. Running through the country uncovers some active bloggers from among the family of over 100 bloggers who have started writing blosg over the past 16 months on the Voices platform.

From the South Island we have Margaret Wilson with her perspective on Ashburton, Michael Tierney with his commentary on the beautiful Arrowtown, speaking of beautiful how could I ignore Sunny Nelson brought to you by David Leggott.

Crossing the Strait we find in the northern suburbs of Wellington our blogger of the month David Garratt, up to Levin is to be found the very frank Mason Parker with his “No added fluff” blog. Up the beautiful east coast we find the lifestyle focussed but very successful Gisborne expert in Neil Walker. Crossing into the Waikato the activity heats up with Greig’s Hamilton brought to you by Greig Metcalfe. North of the Bombay’s finds a rich collection of blogs – Ross Brader’s take on his favourite area of Pt Chevalier, Dane’s Doorway from Dane Brown on the North Shore and Ariel Levin’s take on the city and eastern suburbs.

Whilst the majority of real estate bloggers are focused on local markets and communities we do have a couple of sector specialists – Sharon James who focusses on the Business Broking sector and Kathie Shepard with her views on the Commercial motel sector.

This small snapshot provides a sense of the value and local knowledge of local bloggers – have a read of their perspective and share a comment, that is the value of blogs – reciprocity. Thanks for reading!

3

Innovation in real estate cannot be hampered by access to print media

Posted on: April 30th, 2009 | Filed in Online marketing, Real Estate Industry

Home AutomatiomA new entrant to the real estate industry seems to have accidentally fallen foul of the terms of business of the leading property magazine ‘Property Press’ as reported by the National Business Review.

Property Wizards has decided that the fixed fee model initiated with early success and much fanfair by ‘The Joneses‘ is worthy of revisiting with their $7,000 fixed fee plus marketing. There is no doubt that any industry which even in the current economic climate transacts business to the value of $20+ billion per anum will attract innovation and challenges to existing business models. It is certainly healthy and a reflection of a continual focus towards the consumer that innovative business models should appear and test the established model.

The part of the article that I found most interesting in the story as reported by both the NBR and Landlords was the fact that whilst on the face of it Property Wizards are frustrated that a slight oversight has seen them excluded from future advertising in Property Press – they are however not overly dimayed as they clearly recognise that the best value in marketing is delivered by the web.

This is very quickly confirmed by a review of their website which highlights that in the ranking of services offers to vendors – they place website marketing as the #1. This exactly correlates with the finding of the Nielsen Online survey of 2008 in NZ which when a sample of 1,100 property seekers were asked as to the top sources of information when searching for property cited specialist real estate websites as the #1 source – spending an average of over two and a half hours per week searching. By comparison all of the print media options fell below eighty minutes and saw a year on year fall whilst specialist websites grew from 161 to 167 minutes per week on average.

Nielsen online surveyu of real estate sources of information NZ 2008

8

Mortgagee properties listings – offline vs online searching

Posted on: April 19th, 2009 | Filed in Buying / Selling a home, Online marketing

I have been interested over the past few weeks to see how the local newspaper and specialist property magazines have endeavoured to find a means by which to profile the current stock of mortgagee properties for sale.

Whilst the web provides the simplest way to filter types of properties the printed medium struggles as all properties are grouped around the company profile – that is why recently the adoption of black and white images have become the de-facto “brand” presentation of such mortgagee property listings.

mortgagee-auction-press-bw1

This form of presentation though does beg the question – do black and white photo do  justice to the presentation and therefore the appearance of a property for sale?

Thankfully the same approach has not been adopted online, something I am extremely grateful of; for in my mind this would completely destroy the value of a listing.

After all I would have thought that an agent would want to use all facilities within their capability to promote a listing in the best interests of a vendor. Even if the vendor is the lending institution as the mortgagor facilitating a mortgagee sale. Black and white printed images no longer cost less than colour but they certainly don’t look half as good, and I would judge are more likely to limit the attraction to the interests of bargain hunters as opposed to more regular buyers.

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