In this podcast, we will talk about property agents and their common method in selling a property. I will also discuss the difference between an apartment market and the housing market.
Apartment Specialists Podcast No: 7
Andrew Murray, Apartment Specialists, agents protecting their listings. That’s when agents want to sell the property themselves so they will do this by limiting other agents from selling the property. They will either not let them do it or offer them spilt percentages that’s pretty much not worth the other agent’s time, 10, 20, 30% or make it very difficult. Or you know that when you put in an offer, they’ll knock you around. The average real estate agent only makes 35, 40 grand around that figure a year. So they really care about that one deal.
Well it shouldn’t be that, it’s about you. You’re employing an agent to do a job for you. Now, there’s a huge difference between the apartment market and the housing market. With the housing market, everyone is pretty much looking at the same places, they’re looking at Trade Me and they’re looking in the paper and that’s pretty much it. Now, in the apartment market, there is a huge international pool of buyers. You’ve got 70% of buyers and purchasers who are not planning on living in the apartment. They are all over New Zealand and don’t see the ads in the local paper.
They speak different languages, so they don’t even understand Trade Me. I’ve got buyers agents from New Caledonia, from Australia, from Russia, from Korea, China, all walks of life and that’s what’s in properties. And the buyers only go through them, because they trust them. I’ve got buyers myself that will only go through me because of relationships formed. They’ll pay top dollar but they only go through me. Other agents have got buyers who will only go through them. But I don’t have all the buyers, they don’t have all the buyers, nobody has all the buyers.
So how can you as an apartment owner make sure that your apartment is open to all the buyers? Well, it’s actually quite simple but unfortunately it doesn’t happen. Now you’ve got agencies in this market, their policy is to not let other agents from other competing agencies sell your apartment. They’ll only do a referral fee. You’ve got ones who will only do 30%. You got clauses in the agreements that say, at any point in time they can refuse access to the apartment. Or, I mean I can just go on and on. So what’s that doing?
That’s actually stopping a possible buyer from purchasing your property because of their own interests or the franchise’s. It may not be the agent’s fault but they are all doing it, so it’s okay, well it’s not okay. So, how can you ensure that your apartment is getting the maximum buyers, maximum of offers? This is where you ask your agent, “Will you do a conjunctional sale? What a conjunctional sale means is will they do another sale with another agent from a competing agency? ” And most, when you ask that question, they will say “Yes.” The next question that is crucial is, “What commission percentage do you offer the other agent from your competing agency?”
Some will say 20%, some will say 30%, some will say 40%. The thing is, it’s almost become – I’m not looking at the chart. Its become good advice by correct price. I’ll bring it up an agency. Or bring up an agent. This happens frequently, I’ve been using those. And on that other side, I’ll bring out an offer. Or, we don’t, we kind of leak you through. One sided, this is not the case. They simply will not do that. So how can you absolutely ensure, it’s a difficult one. So what I am saying is, ask them will they do a conjunctional sale.
Ask them what is the percentage, ask them to change that percentage ’cause it means that you dictate the terms, you are the client, the client is always right, why does that apply to every other industry but real estate? So I would like to – if I bring my business to you as an agent, if you to sell me your property. I would like the commissions for other agents and that to be advertised in the ad to be after expenses and your normal licensing phase and that kind of thing to be at 50%. Because if you think about it, if you’re an agent from another agency and you only get 20% of the commission or 30% of the commission.
Well, you’re going to make it an extremely difficult for another agent to come through. You’re not going to do it. You’re going to take your buyer by elsewhere. Because during the day, a real estate agent is just like you, doing a job. They do need to get paid. They need to put food on the table, so the saying goes. So if they’re going to get paid less , what’s going to make it extremely difficult for them, why are they going to bother? So you’re going to make sure your agent makes it as easy as possible and advertises in the ad, “all agents welcome equal commission”.
In that regard that’s how it should be. And, there’s another way to maximize or make sure that your apartment is getting all the publicity, all the action, all of the–it’s getting the highest price I can in the market because this is the worst, I’ll tell you what and it’s so frustrating when I have a buyer who will pay more but I was not able to sell it.
Now, I’ll give you a bit of an insight into the apartment market and the real estate market out and how–you’re probably getting a little bit of trend here as you listened to this. As you are the client, you can actually dictate terms but you got to-I’m trying to educate you so you have the– Because, this is where I live and breathe. And I’m sure, in your industry if I came in and try to figure out what you do. I wouldn’t have a clue, I would be lost.
And so I am trying to give you insight on what to question and how to put a stand to the person you want to represent you to make sure you’re getting looked after.
Hope it’s been helpful and I will be talking about next time is about presentation of your apartment. Now, this is a big one. I kind of touched on it before when we went through photography. That this is a huge one because it’s not done on running the industry and it needs to be. It’s something that you and I need to be aware of. Especially if you’re going to do the ad campaign, ask to see the photos, ask to see the campaign, that kind of thing. Anyway, have a good one. Talk to you soon. Bye!