QIn recent weeks there has been much said about the excessive charges by real estate agents. I would encourage your readers to take a look at the internet.
Much of the “dotcom” hysteria a few years ago was triggered by the potential for eliminating the middleman and allowing the vendors and buyers to transact directly.
As we know this didn’t materialise to the extent that many investors in dotcom shares had hoped for. However, I believe the Internet still has enormous potential for direct real estate transactions with no agents involved.
We have sold a property via the internet. A single free ad was placed on www.trade-exchange.co.nz. It was the easiest $15,000 we have made (or is it saved?).
This was after we had unsuccessfully listed with a real estate agency that had tried to convince us to bring down our selling price and charged hundreds of extra dollars for newspaper adverts and for giving our property a ‘prominent’ position in their display window. (I don’t know how the agencies rationalise charging their customers for these extras. Surely it should be part of their cost of sale!)
Of course our experience is the exception rather than the rule. However, I think people should try giving the Internet a go.
Other web sites that deal in property (either exclusively or as part of a classified ads service) that I have stumbled across are: www.adpost.com.nz, www.1800-homes-for-sale.com/nz, and www.virtualrealty.co.nz. Some are free and some support the upload of digital pictures.
I get the impression that there are lots of them out there and I have no feel as to which ones are the better performing ones.
The more of us that use the internet the more successful this market will be, and it will put pressure on real estate agents to review their pricing.
AOh dear. That rumour that real estate agents are taping this column to their dart boards looks more and more plausible.
But yes, the internet does seem to lend itself to advertising real estate.
Would-be buyers will, of course, want to see the house before they make an offer — although certainly some overseas buyers don’t.
But if you put lots of pictures and lots of info on a website, presumably only those who are really interested in what you are offering will want to visit your house.
That’s got to be an improvement on the current system, in which many agents seem to bring totally unsuitable buyers to inspect your home just so they can tell you they’ve brought someone through.
And, as you say, the savings can be handsome.
QI have heard of you via www.trademe.co.nz (see email below).
My husband Mark and I have just sold our house on Trade Me, after trying agents with no success. We found all but one agent involved with us (four in total) to be pushy and rude, and knew that we could do better by ourselves.
We sold it within the first week on Trade Me, and for more than any of the agents predicted — and without any of their fees! In fact, we’re up about $18,000 all up.
We’d be really pleased to speak with you about this, for two main reasons. We’d like to return a favour to the Trade Me people, and we’d love to let others know there are alternative ways out there to sell your own house on great terms with little hassle.
Email below: Congratulations on selling your house through Trade Me!
There is currently a reporter from the New Zealand Herald that is writing an article in the Money Matters Column about the sale of houses external to sale agents and commission.
She is interested in hearing from people who are selling privately or via non-agent channels. If you could share your experiences that would be great.
If you would like to talk to her about the sale of your house through the Trade Me site you are welcome to contact her on [email protected]. Have a nice week.
Regards, (signed), Trade Me Support.
AOuch! I’m feeling just a tiny weeny bit used.
Then again, I think you must be genuine — as opposed to the Trade Me Support bloke’s sister making it all up — or you wouldn’t have sent me his message on the bottom of yours.
So, despite my misgivings, I’m including your letter. I’ve already given other websites a plug, above. And it’s all useful info for other readers.
Footnote: Given the devious ways of some PR people, maybe you are indeed his sister. And it worked!
QI like your articles very much. It has become part of my weekend reading. And I do not always agree with what you have to say. Or your readers for that matter. But then I guess this is the beauty of freedom of speech.
I have been in real estate sales, management and ownership business for over 20 years (good times and bad). I have also had several other types of business totally unrelated to real estate.
What the public need to realize is that the cost of running a real estate office is absolutely huge. And I mean huge.
It is not like a retail store, where you can flick off the “bargains” when cash flow is required. Nor can you put up the “SALE” sign to attract more customers.
We must be one of the very few businesses in the world where the owner actually pays out in advance for all the services he provides to the public when they want to sell their property.
It costs me on average $45,000 per month to keep my doors open. This expense is there every month regardless of whether any sales are made.
Ask any professional out there — lawyer, accountant, doctor, dentist, etc etc — to go out and work for four weeks, and spend $45,000 without any guarantee of any income whatsoever. Let’s see how many take up the offer.
Sales people today do not get a weekend to themselves or for their family. They have to fit “time out” into very busy schedules.
And the job can be very heart breaking when you have spent a lot of time and money just to find that your “loyal and friendly” client has just gone down the road and bought the house you told them about from another agent (or privately).
I hope you print this, as people need to know the cost of providing a good professional real estate service.
ABut do they?
I feel mean saying that, after your gracious comments at the beginning of your letter. But I’m afraid I don’t care how much it costs my real estate agent, lawyer, accountant or drainlayer to run his or her business. I’m interested only in what they can do for me and what they will charge me.
And do you really need to spend all that money? This ongoing “debate” is partly about exploring other ways to buy and sell property, without anyone incurring high costs that turn into high fees.
Your comparisons with professionals don’t make much sense. You’re in sales, and people selling anything, the world over, have to spend upfront and don’t know how much they will make. On the other hand, the sky’s the limit. They might make millions.
While your line of business undoubtedly has its trials, such as weekend work and losing sales to rivals — which must be a real downer — I have to repeat what I said to a salesman last week: Nobody is forcing you to do it.
As for putting up a “Sale” sign, that’s pretty much what real estate agent Guido did in this column two weeks ago, when he took up my challenge and offered to accept ten listings for $4000 commission each. So how’s he doing? Read on.
QYou wondered how the $4,000 fee agent was doing? We had seven callers, five have signed and I expect all to go ahead. Our special has been a success that we may extend!
Last time, in your column, I wrote about the Dutch sales system. I would like to explain a Dutch auction, approved for use in New Zealand in the Auctioneers Act 1928.
We hold two auctions. First the bids go up, like a normal auction. The highest bidder is in line to receive a commission called ‘strijkgeld’, but may not necessarily become the purchaser!
In New Zealand, a house will sell $1,000 above the second highest bidder, say $200,000. The top bidder may have been prepared to go to $240,000.
Under the Dutch system we start a second auction immediately after the first one at say $300,000 and go down $1,000 at the time. The first person to call “Mine” is the real buyer.
In the above example the $240,000 buyer does not know when any other person present will call “mine”. At $240,000 he no longer waits and shouts: “MINE!”.
He has secured the property and he will never know how much he could have bought it for. In that case we have managed to obtain an extra $40,000 for the vendor.
If nobody calls ‘Mine”, the top bidder in the first auction becomes the purchaser and pays $200,000 minus his commission.
If the property does not reach the reserve, nobody gets anything. Some ‘top bidders’ make good money bidding at auctions.
AIt’s good to hear of your success so far. Please send us another report when all the properties are sold.
The Dutch auction sounds intriguing. From the seller’s point of view, it certainly gets around the problem you illustrate, when the top bidder is willing to pay much more than the second to top one but ends up paying only a little more.
With a normal auction, the only way sellers do particularly well is if there are at least two really keen buyers — whereas for a regular sale you need only one keen buyer. And the same could be said for a Dutch auction.
But would buyers go along with it? I suppose so, if they understood the process and if the property was special enough that they really wanted it.
Perhaps you could pioneer Dutch auctions in New Zealand. You’ve already proved yourself an innovator.
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Mary Holm is a freelance journalist, a director of Financial Services Complaints Ltd (FSCL), a seminar presenter and a bestselling author on personal finance. From 2011 to 2019 she was a founding director of the Financial Markets Authority. Her opinions are personal, and do not reflect the position of any organisation in which she holds office. Mary’s advice is of a general nature, and she is not responsible for any loss that any reader may suffer from following it. Send questions to [email protected] or click here. Letters should not exceed 200 words. We won’t publish your name. Please provide a (preferably daytime) phone number. Unfortunately, Mary cannot answer all questions, correspond directly with readers, or give financial advice.