With property sales running at 10 year lows, clearly vendors needing to move will naturally become ever keener to seek any ideas of how they might sell their property. A sense of desperation can creep in as per the article in the NZ Herald titled “Downturn in property market means strategies needed to sell“.
However before you rush out and engage a specialist consultants as a property educator or property advisor; I think it is really important to reinforce some basic facts around the role and services of a real estate agent.
Do not just assume as this article says that the “value real estate agents can add to the transaction is that they have the ability to promote your property and put it in front of large numbers of people” – real estate agents are about far more than just promoting property.
Now just to be clear this article profiles a company called BackStop. I do not know of this company or its proprietor, I make no judgement of their capability or professionalism and I have absolutely no reason to believe that they will not provide a professional service. All I am keen to do is provide clarity around the services of a real estate agent that a vendor should and can expect – a comprehensive service that is all included in the fee that an agent will charge on successful completion of a sale.
Let’s look at the key elements of selling a home, of which the main 4 are:
Market Assessment
To be able to best present a property for sale a thorough evaluation needs to be undertaken to assess the market demand. This process requires information and statistics on factors such as local sales and population movements, employment prospects as well as knowledge about existing buyers and sellers in the local market. Now some of these statistics are accessible by anyone with a good understanding of where to look, a good starting point in the case of prior sales is QV, and for census information Statistics NZ.
But when it comes to understanding the current local market a local real estate agent is going to know far more than a consultant. Agents have access to far more current information on sales than for example QV whose data is usually around 3 months old. An agent will likely know what was sold last week, as well as last month and 3 months ago. In addition an agent will be aware of the interest in recent properties that have been on the market as well as properties potentially coming onto the market.
Marketing
Thorough and professional marketing is a key component of selling a property. If a property is inadequately marketed it will fail to be seen by prospective buyers, not only that, it is important to recognise that marketing a property is not just a simple advert. The content and form of every piece of communication is critical as well as the most appropriate medium. A great piece of communication inadequately communicated is as bad as a bad piece of communication broadly communicated.
A real estate agent has access to unique channels of communication that others cannot access. Take 2 key ones – Property Press is a case in point, a very powerful tool for showcasing property utilised extensively by buyers and not accessible but to licensed real estate agents. Equally this website is only available to licensed agents. Well you may say, anyone can use Trade Me – very true, but with a far more comprehensive content of properties for sale (realestate.co.nz with 75,000 vs Trade Me with 55,000) it is clear that buyers value the content on this website, in fact based on Nielsen Online data realestate.co.nz attracted 96,000 unique visitors in August that did not visit Trade Me Property.
Facilitation
Marketing a property is not selling a property; it is only the start of the process. The process of buying a property and conversely selling a property takes time and for the transaction to go through requires a large degree of persuasive contact between buyers and vendors agents to ensure information flows frequently and smoothly. The whole process of viewing properties and collating of reports as well as clarifying interest is something that agents do as second nature that others outside of the industry fail to appreciate and recognise as the time commitment is significant. It is all about building trust and relationships and keeping the ball rolling, not something done so easily by a vendor or a consultant.
Negotiation
And finally when you have an interested buyer the key task is closing the deal. This is sighted as the one reason why so many would-be private sales fall through, the inability to get a deal agreed, that is even before the issue of negotiation of price. A local agent acts for the vendor, they have an incentive to close a deal and to secure the best price – that is why they are paid on commission, they are removed from the massive emotional connection with most family homes and act accordingly, something advisors and educators would be hard pushed to provide.
So whilst on the face of it there can be a sense of desperation in today’s market when sales are so slow that sellers need to seek alternative means of marketing their property to sell. It is really important to be clear around the role and services able to be provided by a real estate agent before leaping at the first advisor that comes knocking seeking to provide that golden nugget of unique knowledge and skill to get your house sold.
Tread wisely to avoid spending more money and ending up no better off!
