Dinosaurs.....And we KNOW the comet is coming!

Pearse Kinchella, Real Estate Agent of Wanganui and Richard Galbraith, Internet Entrepreneur of Auckland share views on the role of the internet in the Real Estate Industry and Conveyancing Sectors.

Pearse wrote:

I mentioned relevance on my last post. It’s a hot potato and something a lot of us would rather just ignore. If you’re over 60 and don’t give a damn, then firstly, you wont be reading this, so up yours, and more pertinently you don’t really need to. If at this age you’re doing pretty ok in this profession, giving good service and do care then unless the second coming involves a particularly un-realestate-agent-friendly messiah, you’re pretty much ok as you’ll ride this out just fine.  If however you want to make or retain a mark in this business then read on…

All of the studies I’ve read recently show a landslide of favouritism away from the ‘old guard’ of the guy who’s been in Real estate for 20 years, used to run a store and attracted his customers from his old client-base, the guy who taught maths for 20 years, retired and decided to sell all his students and their parent’s houses, and of course, the perennial millionaire with an ego complex who likes his face in the paper. I’m NOT talking about YOU. I’m talking about the people who really are only there for the ride, show up at a few meetings and while away their duty time buying ceramic teddy bears on Trade Me.

In a good market your mate will almost always give you ther listing unless he found out about the tequila and twister session around at his place when you were house-sitting. But in this market listings perversly are getting harder to get. WHY? Because in a good market the vendor doesn’t really give a damn who he chooses, after all the house will sell anyway. But in this market it’s all very different indeed. You’re carefully selected, you’re in competition with others. You WILL need to sing for your supper.

I’ve got news for you. This shift in quality-consciousness has nothing to do with the shift in market dynamics. It’s a coincidence but the downturn in the market has certainly accelerated this process. What we are seeing is a paradigm shift. The raising of the quality bar was always going to happen with an Information enlightened  population. And when the market improves the bar is not going back down.

Well, Damn it all, but these vendors just have so many questions and annoyingly they don’t want to take my word for it anymore!

They’re actually asking questions, a heck of a lot of questions, like:

Why are you choosing auction as a method of sale when clearly 89% of auctions have failed in this area in the last 6 months?

Does’nt tender tend to antagonise potential buyers?

How will your team respond to telephone calls from prospective purchasers?

What’s my competition. No I mean exactly what?

Why should’nt I just stick it on Trade Me?

or at the appraisal stage:

We hear what you’re saying…but why is it that two of your colleagues think our house is worth x dollars more or less (generally the former) than you?

They may even start to bamboozle you with stats that you weren’t aware of or demand a specific insight into how you arrived at your value determination.

Where are they getting all this stuff?

Purchasers are also coming up with their own opinions on value. They always have had their own views on price BUT these days they are in posession of stats and figures, have performed their own CMA and can put forward a compelling argument to support their contention.

If you’re continually in a situation where these guys know more than you then you’ve got a problem and eventually unless we as a profession get a handle on this these two sets of parties, buyers and sellers are going to make the next logical leap…Why are we talking to you guys?

Our traditional role was to a greater or lesser extent, the jealous guardian of information. We knew and shared site plans, property age, GV’s and any other relevant info the buyer wished to have. There was no other way they could get it apart from through us.

Nowadays of course this function has been wrested from us and it’s becoming more and more commonplace for purchasers to turn up at a site inspection with more information than you.

So if that’s no longer our primary role then maybe it’s all down to negotiation skills. Well it is and it isn’t. We cant sit back and say that’s it. This is why it’ll never change. These guys will never (for the most part) want to square up to each other and cut a deal. It’s just too uncomfortable so this secures our future.

Imagine a day where these two parties can negotiate their differences online. Where ‘How to Negotiate’ tutorials are available online and prompts are available each step of the way to ensure each party is protected. Where once a deal has been struck an ACCEPT button is clicked by each party and formal instructions to trade are sent to their respective solicitors to produce an S&P agreement from. Where the initial viewing is handled by the Vendor and if that too is too uncomfortable by a ‘facilitator’.

It’s coming like an express train with the lights on.

I say: If that’s the future then let us be the ones to champion it. We facilitate (for want of a better word), we provide every possible smidgeon of information to vendors and purchasers, use as much science as we can in determining value and present our ‘reason for being’ to the vendors. Provide the stats to the purchasers too. Show them the rationale behind the asking price. I do and it’s amazing how you can prove your case to the most cautious of purchasers. Put your offering together as a SUPER PROFESSIONAL PACKAGE.

We are marketing experts. We can prove this. We collect stats in our area showing how many private sales are available and how many are being withdrawn. How many properties are currently on the market in your area. How many have been withdrawn over the past month? What’s the ratio of private to agency listings and what’s the probability of success based on the last 6 months history.

Make No Mistake: This may seem like a gross exagerration but I fervently believe that every super-professional appraisal we perform over the next few years, every improvement we make and the more information we share, the more we facilitate the free movement of said information the more our case for our VERY EXISTENCE is proven.

The Internet is gathering pace and relevance. It’s providing people with practical tools to do all sorts of things. It’s going to make a lot of folk obselete. Online conveyancing is happening in other countries and will arrive here. Does this mean all the lawyers and legal execs can forget about that income. A lot of them will have no choice. However the ones who are RELEVANT, who add value and sort out issues, who deliver a PACKAGE will make more money then than now.

What’s going to happen next? There are ways easily available online to make a reasonably intelligent forecast and I’m going to share some of these with you in my next few posts.

Who is this idiot telling us how to do our jobs? I’m no-one. I’m just a guy with more time on my hands than I should have. If this is stuff you already are only too well aware of and are currently employing in your business then you’ll never have to look at these posts again. If you think these posts are crap then I’m sorry for boring you.

If however you’d rather make preperations for a very brave new world then I’m sure we’re going to have a great time.


Richard Galbraith's reply:

A very interesting read.

I agree that the internet will play a significant support role for both Real Estate Agents and Lawyers but I cannot see the internet taking over the entire process. Both Real Estate Agents and Lawyers have too much skill and knowledge about the property sector for parties to start clicking buttons to purchase land. Also there are too many stakeholders involved in the average land deal. The process generally involves a personal element and transactions have too many variables for it to become entirely automated. The consumer would be crazy to rely solely on their own research online and click a button to purchase land. They should not cut and paste in sale and purchase conditions themselves as they haven’t had the training to understand the often hidden implications that can arise from conditional contacts.

At the very minimum lawyers should be involved who not only protect both the vendor client’s and purchaser client’s interest but also the interests of the financiers who are being repaid or who are funding a new purchase. With the current collapse of the banking sector the financier’s requirements are only going to get more stringent.

The internet is a wonderful tool to support and enhance the traditional methods of buying and selling houses which has evolved over hundreds of years. My company has developed KeyTrack http://www.keytrack.co.nz which supports Lawyers, Real Estate Agents and clients with real time communication during the process of buying and selling property. The government has invested hundreds of millions in building an online land registry, QV have similarly invested millions in providing online valuation services, the Real Estate Industry and has invested millions in providing online marketing solutions. As a result of these investments NZ is certainly keeping pace with developments offshore.

One thing is for certain though and that is if you are in either the Legal or Real Estate sectors you need to be up to date with mobile technology and online solutions.

Richard Galbraith

KeyTrack NZ

Posted: 8 Nov 2008

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