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myth 7 auckland apartment market sellers cant break sole agency agreement

Myth #7: Auckland Apartment Sellers have No Way of Getting Out of a Sole Agency Agreement

Posted in Apartment Marketing, Blog, Imageless, Not A Property, Property Value, Selling, Things To Know About Apartments, Value Updates.


Apartment Specialists Podcast No: 24

Summary:

In this podcast, I discussed about the myth of the sole agency and the reason why you need to get out of it.

TRANSCRIPTION:

Andrew Murray, Apartment Specialist, the Auckland apartment market. Today, I’m going to be talking about the myth of the sole agency. The fact that, you can’t get out of it. The thing is, you can.

I often get called by this guy, “Andrew, I’d like you to represent me. You’ve been recommended by Joe Blogg because the agent that I’m with at the moment is just not working for me”. For number of reasons, it could be promises they haven’t kept. Or it could be that they’re just not getting along.

Now, real estate is an interesting industry. And the Auckland apartment market’s where you can’t try before you buy. The agent promises the world – and if they don’t deliver – you’re stuck with them for 90 days. The same thing is this: if you’ve got a vendor that has to sell on a certain time frame for various reasons –  generally because of financial commitments – and it means they have to go through an agent they don’t want to go through or they don’t feel are doing the best job for them.  And often, this leads to accepting offers that they didn’t want to accept.

The key thing here is to remember as the vendor, you are in control. Make sure you are always in control because the problem with the real estate industry – especially in apartment market from my opinion is – the vendor loses control when they sign that sole agency and they need to get that control back. They need to better dictate the terms. They need to be able to hold the agent accountable.

So when you find the agent who you want to represent you, ask to have a clause added in the agreement saying you can terminate that agreement if you feel they’re not representing you or they’re not delivering what they promised. So it’s their business loss, because what other industry can you actually lock someone in? So remember that. And that should really, really help you because it’s also going to make them work harder. Because they know that if they don’t, they’ll lose the job or they’ll lose you as a customer. And that’s how it should be as it is in every other industry.

I hope that helps. That’s a really, really an important one that I feel very passionate about. And so remember that.

Next week what I’m going to do is, I’m going to talk about another myth – that you know your apartment is getting sold or undersold to a trader to be resold because you don’t. And I’ll give you a few tips on how you can tell.

Cheers! Bye!

myth 5 agents able close deal auckland apartment sales

Myth #5: All Agents are Able to Sell Apartments in the Auckland Apartment Market

Posted in Apartment Marketing, Blog, Imageless, Not A Property, Property Value, Selling, Things To Know About Apartments, Value Updates.

Apartment Specialists Podcast No: 22

Summary:

In this podcast, we will talk about the common methods used by agents when selling Auckland properties and the policies they follow.

TRANSCRIPTION:

Andrew Murray, Apartment Specialists. Myth: All agents are able to sell your apartment.

Now in the Auckland apartment market, there are over a hundred apartment specialists. Now, unlike the housing market, these specialists represent all different demographics – different cultures, buyers that don’t go to newspapers, don’t go through Trade Me and only buy through particular agents because of relationships – and that I mentioned earlier.

When selling your apartment, an agent will nearly always say, “Yes, I do sales with other agents.” But the simple fact of the matter is, they don’t. You’ve got one of the major agencies – it’s their policy to not let other agents from other agencies actually bring an offer. I have actually called them and sent emails saying, “I will give you a listing price. I’ve got a buyer from overseas who’s going to pay really good money and give you a listing price for your apartment.”

And I get a response back saying, “Sorry. It’s not our policy to sell to other agents or give you a referral fee.” At the end of the day, every agent is out there doing a living. It’s a job for a reason. This is not doing what’s best for the vendor – now that’s an extreme.

Then you have the majority of the agencies in the Auckland apartment market which do conjunctional sales. So they will let another agent from another agency through the apartment. But the thing that they don’t tell you is – they will restrict the commission and that ranges from 20% or 30% or 40%.

So for example – if I have a buyer who’s going to pay top dollar for an apartment that’s been listed by another agency, I’ll ring them up and I’ll go, “Can I take a buyer through and will you do a conjunctional sale? They’ll say yes – they may only give me 30% of the commission.

Now if you ask yourself, if an agent has a really good buyer who’s going to pay top dollar – and that agent is trying to make a living, are they going to direct their buyer to a property where they’re going to get paid less or where they’re going to get paid freely?

So the key question is, when you’re choosing an agent to represent you, ask them not only do they do conjunctional sales – which is very important – but do they share the commission fairly and evenly?

Actually put a clause in that agency agreement saying, “That you, the agent, will share the commission after expenses, 50-50, with another agent from an other agency”. And you actually put that in your ad. What that does is – it means that you’ve got a whole market looking for you – which ensures that you get the highest price for your Auckland apartment.

Now I hope that’s been helpful – quite an insight. It’s hard to know what’s going on in the real estate industry unless you’re in it. Hopefully that’s given you a little bit more.

Next week, I’m going to talk about something that very few people are aware of. All apartment agents get paid differently, even if they’re in the same agency. And there are reasons for that. And that also has implications for you being a vendor.

Anyway, I’ll talk about that next week and talk soon.

Cheers!.

myth about urgent sales

Myth #4: Urgent Sales Require Underselling Your Auckland Apartment

Posted in Apartment Marketing, Blog, Buying, Imageless, Not A Property, Property Value, Things To Know About Apartments, Value Updates. 1 Comment

Apartment Specialists Podcast No: 21

Summary:

Are urgent sales really that disastrous? Is it really true that  you are going to accept a low price if you sell your apartment urgently? Learn more from this podcast.

TRANSCRIPTION:

Andrew Murray, Apartment Specialists. You know, I get this question quite often – and a lot of owners think that – if I have to sell their property or their Auckland apartment really quickly, it means they’re going to have to accept a low price because of their contract. Now, unless you’ve got to sell it within days – which is very unlikely – generally a bank or whatever the situation is that’s making you have to sell it, we usually have how many months time. Now, this means you definitely don’t have to accept a lower price or lower than the market value.

The reason why I say that is, most of the activity that happens when you list an Auckland apartment happens in the first two weeks. You can see this by the amount of hits or the amount of views. For example, when you put an apartment in TradeMe, which is where most of your leads come from. Because with apartments – unlike houses – people search more on the internet than they do on the papers.

So the key thing there is to not panic and realize still – the fundamentals apply – which is presentation. So you’ve got to make sure that you take that week, to make sure that – say for example – what I do with an owner is, it takes me a week to make sure that I’ve got the apartment ready. All the information – I’ve got my sales pitch down, I’ve written the ad the best I can, I’ve got all the photos. So when it goes up on TradeMe, it’s got 12, 14, 15, 16 professional photos. Not putting up one photo and then adding them in five days time because it’s a rush. You’ve already missed the boat.

So the important thing for an owner to remember is you do not have to sell your – or undersell your apartment if you need an urgent sale unless you have to sell it in one or two days. And then what I’d do is I’d probably advise you to go to a trader and they can give you an unconditional offer very quickly. And I would gladly put you in touch with one and you won’t need to go through with a sales agent.

So I hope that gives you a little bit of justice. If you have to sell your Auckland apartment urgently, you don’t have to take that when it comes down to value. You’re just going to make sure you present your apartment properly. Do what you think is normal and just trust your agents to do a good job. And make sure that they explain it to you. And make sure that you follow how they market your property. It might take that time.

All right, next week we’re going to talk about another one. When an agent says that any other agent can sell your property. It’s a bit of a myth in this industry because it doesn’t actually happen. And I’ll explain to you why. Talk to you soon.

Cheers. Bye!

myth 3 rental companies charge auckland apartments

Myth #3: All Rental Companies Charge the Same for Management Services of Auckland Apartments

Posted in Apartment Marketing, Apartment Selling, Blog, Buying, Imageless, Not A Property, Renting, Things To Know About Apartments, Value Updates.

Apartment Specialists Podcast No: 20

Summary:

In this podcast, we will talk about another myth concerning rental companies. I will divulge their common methods and what you need to know about them!

TRANSCRIPTION:

Andrew Murray, Apartment Specialists. Myth number three on the Auckland apartment market. All rental companies charge the same – complete myth.

Now, what I come across most is basically, rental companies will charge between generally, 7% of your rent and 9% of your rent. That’s what most of the companies charge. The reason why one charges nine, and the other one charges seven in regards of service, I don’t really see any difference at all. Now what I don’t understand is – owners are paying 7-9% of their rent. So if that say $400 a week, that is –  I don’t know – around $36 a week to the rental manager, to look after their apartment. Now you times that by 10, that’s $360. Times it by another five, and that’s a year. So that’s a lot of money you’re paying to a rental manager.

So what I don’t understand is on top of that, a lot of the rental manager’s charge for all these other things. For example –  okay, they’re going to check your apartment. They’ll go and check your tenant. Now they should be checking your tenant in my opinion four times a year because tenants can do all kinds of damage to your apartment. You want that checked to make sure the tenant’s are looking after it. There’s no damage and they’re not having parties. All those kind of things. All the horror stories we hear – and I see quite often. Yet, some only do it twice a year. And then others I’ve come across haven’t even check it at all and have got no idea what is happening. Yet, you’re paying them for doing what? Just sitting there?

Now then, there’s all these other charges some companies will be charging for when they might have to do a call-out. So for example, maybe something needed to be done or fixed in the apartment. So they get called out to the apartment to see it – and they’ll charge the owner a call-out fee. Or when work needs to be done and say a plumber comes in and fixes it and that gets organized and there’s an invoice or whatever. They’ll then put a percentage on top of the invoice that they charge. Now, I just don’t understand the industry really here because it’s not really transparent. What are you paying that 7% or 9% of your rent for? Shouldn’t it be that to manage your apartment? And doesn’t all those responsibilities should come underneath it?

So really it’s finding – Now, I don’t do rental management. I’m not trying to get your business or anything. I’m just trying to educate you and knock out – okay what’s sort of happening here. And then look at the company that’s been going after you. Because, how is an owner supposed to know if they are being looked after? Or what other companies are doing or charging cause there’s some very good ones out there.

And so look at your statement, do you understand it? Is it very transparent? Do you know what you’re being charged? Do you think it’s fair? If you’ve got no idea, it’s no fault of yours. Send an email. Scan in an invoice to andrew@apartmentpecialists.co.nz and I’ll have a look at it and sort of give you an idea of what you’re being charged and what’s normal in the market and what’s above or below that. And obviously this is a service and that kind of thing which only you really know.

But yeah, look into it. See what you’ve been paying because you pay thousand dollars a year for the apartment to be managed. And if it’s not being done properly and you’re getting charged too much for no extra value or service, you’re being taken for a ride.

Anyway, I hope that’s given you some invisibility. Next week myth number four. And we will be talking about agent sharing commission which is conjunctional sales. So the myth is all agents make it easy for other agents to sell your apartment. And if they do, they share the commission equally.

I’ll talk to you next month. I think you’ll find this one quite interesting and have a good week.

Cheers!

incentivise auction selling auckland apartments

Myth #2: Agencies Incentivise Auction as It Gets the Highest Price When Selling Auckland Apartments

Posted in Apartment Marketing, Blog, Buying, Imageless, Not A Property, Property Value, Selling, Things To Know About Apartments, Value Updates.

Apartment Specialists Podcast No: 19

Summary:

We will tackle why owners of agencies incentivise auctions and why they do this sort of thing. Get the facts straight from this podcast.

TRANSCRIPTION:

Andrew Murray, Apartment Specialists. Myth number two. Agencies incentivise auctions because it is in the best interest of the owners.

In my own opinion, that is a complete myth and from my experience it has been a complete myth. Owners of agencies incentivise auctions because it’s in the best interest of the agency.

They do that for three reasons.

Because an agency is like any company, it needs to predict next month’s income. And the best way of doing that is through auction – because auctions are more likely to sell. The reason is because of the pressure of an auction – the amount of money spent on the advertising. The owners go all in. They’re not going to that point and go “Oh, we’re going to spend that $4-5,000 again”. So for an owner, they can predict and look okay we’ve got 10 options next month, that means on average we sell 90% of all our options. So that means there’s nine sales right there.

Now at the moment, in the housing market, they’re in line. In my opinion, in the housing market, if I had a house, I’ll sell it by auction because that is the best way to sell at the moment. Currently, because there is a lack of supply of listings and there are more buyers. They’re emotional buyers so there are more. But if you looked at it three years ago, it would be the worst way to sell your house because we all know what was happening. There was nobody around to buy. It was a crash – it was a financial crisis.

Now if you look at apartments, where there is a huge amount of supply – over 611 apartments currently. Well, why are auctions being used if they aren’t having the same result in the housing market? Why are they being used to sell lease-hold property when there aren’t any buyers? It’s because the owners incentivise them. They’re giving their agents more commission or more commission goes to a listing agent. Then the agent finds a buyer because it’s selling by auction. The other reason why agencies want auctions is because all the advertising of the publicity, that’s half ego and it’s half because it kind of works. The more publicity you have, the more market share it appears you have. And so other owners are more likely to go to that agent or agency because of the advertising.

So I hope that’s really given you a different point of view of how auctions are being used. In my opinion, why there are so many auctions in the apartment market, where especially in buildings where they are lease-hold buildings. You don’t have owner-occupiers purchasing them. It’s all about the numbers – there isn’t the emotion and continually- again and again -I’m not getting the best prices, listening to the prices, yet auction is chosen again and again.

Okay, next week we are going to talk about something completely different – rental companies. Being that 70% of the Auckland apartment market is rented, it’s a pretty big topic. The myth is that all rental companies are equal.

Thank you, cheers.

agents get paid the in selling auckland apartments

Myth #1: Agents Get Paid the Same However they Sell Auckland Apartments

Posted in Apartment Marketing, Blog, Imageless, Not A Property, Property Value, Selling, Things To Know About Apartments, Value Updates. 1 Comment

Apartment Specialists Podcast No: 18

Summary:

In this podcast, I’ll be talking about myths that you will commonly encounter in the Auckland apartment market and the whole real estate market in New Zealand.

TRANSCRIPTION:

Andrew Murray, Apartment Specialists. Today we’re going to be talking about myths. What you do not know about what happens in the Auckland apartment market, as well as the real estate market through the whole of New Zealand.

Now myth number one’s quite an interesting one. I would be very surprised if many people are aware of this. But the myth is, real estate agents get paid the same amount whether they sell Auckland apartments via auction or by price or by tender. Now that’s a myth. That’s not the case.

Agents get paid more to auction your property. What happens is an agency gives them 70% of the commission on offer to the listing agent. And then they only offer 30% to the agent who finds the buyer. That’s because an agency wants as many auctions. And I’ll be talking about that in the next podcast, the reasons why an agency wants more auctions.

Now specifically what does that mean? A listing agent gets paid more if they list a property by auction than with a price? Now, that’s actually a bit of conflict of interest because it means there’s an incentive to sell an open apartment or house by auction. Now to me it doesn’t swing. You’ve got to ask yourself – three years ago in the housing market, why there was still auctions when we all know that was the worst way to sale? There was no demand. And in the apartment market, why are there so many auctions? Auctions for leasehold properties when there are no buyers? And then it is just passed in again and again. And if there was a good buyer, they’ll only have to pay just above the other buyer who was most likely a trader or somebody who was just speculating.

Why does it have this effect? So what happens is, the listing agent gets paid more when they list it and they’re going to get 30% when they find a buyer. So what happens is, other agents who have a really good buyer – it’s all about paying the bills. That’s what agents do. You’ve got to think about it as your own job.

If you’re going to have a good buyer that’s going to buy property, are you going to direct it towards a property that you’re going to get 30% of the commission? Or are you going to direct it towards a property where you’re going to get more commission, or paid more? I mean that answers the question itself. And because of this, the IRA just come up with a new legislation to make sure that every agent – when they auction – actually declare that to the owner. Now whether that’s happening or not, I don’t know. That’s myth number one. A bit of a biggy and something you need to be aware of. And actually ask your agent who’s representing you, if they haven’t already told you that. Because they’re supposed to. Thank you.

Next week, we’re going to be talking about myth number two, and that is why do agencies want auctions?

Cool. Thanks.

 

auckland apartment sales who gets more

Auckland Apartment Sales – Who Gets More Real Estate Agent or Agency?

Posted in Apartment Marketing, Blog, Imageless, Not A Property, Property Value, Selling, Things To Know About Apartments, Value Updates. 1 Comment

 

Apartment Specialists Podcast No: 13

Summary:

In this podcast, I’ll be discussing the reasons why most apartment owners lose thousands of dollars when they sell their apartment. Find out how you can avoid this situation and get the  value you deserve. Learn all the essential strategies for any Auckland apartment sales.

TRANSCRIPTION: Andrew Murray, Apartment Specialists, Number Ten from the reasons why apartment owners lose thousands of dollars when selling their Auckland apartment. Is it the agent or the agency (Who Gets the Highest Price for Your Auckland Apartment)? Now, as an agent myself, I clearly know the answer to this one. I wanted to find out what apartment owners think. So I rang about 20 owners and talked to them about their apartments – all that kinds of things – and their plans for the future. And to each one, I asked them one question: In dealing with or when selling your apartment, what’s the most important? Is it the agent or is it the agency? And every single one said the agent. Which is interesting because there’s so much branding, so much advertising out there, for what? An agency. Yet every owner I spoke to said, it’s the agent that is most important.

And there’s quite a few reasons for that. Because, if you know the statistics, the same agents more often get the highest prices. Yes, an agent can be lucky here and there, but it seems to repeat itself. Also, if you look at the average wage of a real-estate agent being under $35-40,000 a year – realistically – I’d say it’s more like 50 or 60, but those are official statistics – that means probably about 5 to 10% of all the agents are selling all the properties. It actually says again that’s why – or it says it quite simply that the agent is more important than the agency when looking to get the the most value for your apartment.

So, that’s really important. So how do you find out if an agent is the best to represent you, or which one it is? It’s not “are they the top agent” because the top agent in this industry is judged by how much commission they’re bring in, not by the prices they get. In the housing market it’s very difficult to tell, because houses aren’t comparable. You can have houses in the same street, but how are you supposed to know the values, because they’re different. This one’s got a porch, this one doesn’t. This one’s got a pool, etc, etc. But in an apartment complex – you’ve got so many different apartments in CBD, over 18,000 apartments – they’re very comparable. So you can quite easily tell who is getting the highest prices.

So when you’re dealing with your Auckland Apartment agent, you want to ask them, can I see your last sales and how they make in the building that you sold them in? And that will give you a very clear indication of how good that agent is. And how focused they are in getting the best result for the vendor or commission in their pocket.

That is probably the final one, but the biggest and the simplest and the most unnoticed in this type of industry. I’ll say it again, the best agents are judged in this market by how much commission they bring in, not by the prices they get. So you as an owner really need to be aware of that when choosing your agent, and ask for evidence showing that it’s the values they achieve, and that’s the most important to you. I hope that helps and I hope these ten mistakes have been really, really helpful. I know we got a lot of good feedback for them, and a lot of people are listening, so thanks a lot. Cheers!

understanding auckland apartment buyer

What is your target market you are selling to?

Posted in Apartment Marketing, Blog, Imageless, Not A Property, Property Value, Selling, Things To Know About Apartments, Value Updates.

SUMMARY: 

As agents we get to know the different types of buyers and building as well. This means we understand our target audiences. Every single building has a slightly different market and what makes us experts at Apartment Specialists is being in the know.

An example would be if we were selling in a building with high percentage of Chinese owner/occupiers. I would then to market the audience as well as dealing with local Chinese agents and buyers.

TRANSCRIPTION:

Andrew Murray, Apartment Specialists, number nine – Knowing your buyer.

Now, what do I mean by that? Well, it’s what we’re here to do. As real estate agents, what do we do? We sell and we market. And to sell or to get those people to sell to, we’ve got to attract them – which means we need to know the type of audience.

For example, if your apartment is going to be most likely sold to an investor – we’ve got to target investors, and vice-versa with owner occupiers. Otherwise, you’re most likely not going to get the best result. Yes, you could get lucky, but we’re talking about most likely. Because again and again and again, we’ve got to be getting the best result for our vendors – which means we’ve got to know our market. Every single building has a slightly different target market.

For example, I may be selling a building which is 40% Chinese. Well, I’m European. So, how am I going to market to the Chinese? Well, what I do is, I deal with about 20 different Chinese agents. I deal with Chinese buyers’ agents, and that’s just to give an example. Also, what if a building is popular with the French? Well, I’ll deal with the French buyers’ agents, and vice-versa. There’s a lot of different ways that we can market in this industry. And it’s about knowing the right one for our vendor’s apartment.

So ask your agent, what is the target market? How are you going to reach them? And how is that going to maximise the amount of enquiries and leads created? That is a huge, huge point that determinants how much will you get for your apartment.

Anyway, hope this helps and I will talk to you soon with the other theme.

Cheers!