There was a lot of hype a few years ago when some new players entered the real estate industry and promised to bring change and disrupt an industry that was backwards and in need of a shake up. One of these so called ‘disruptors’ even had an advertising campaign poking fun at real estate agents who they believed did nothing other than play golf all day and spend their ‘easy earned’ commission on luxury goods, holidays and fast cars. These companies offered a flat fee or very low commission but took away much of the services offered by other real estate agencies. Their focus was on technology and the key focus of their marketing efforts was on price – “One flat Fee” was all that they required. They even had calculators on their website showing you how much you would save by using them over other estate agents.
It was no surprise that these companies gained some traction in the market as sellers looked to save money. One of the major services that they did not offer was showing your home to prospective buyers as they stated that ‘no one knows the house better than you do’. However, what they forgot was that the average person doesn’t sell houses every day, that even when bookings are made buyers fail to show up. Some buyers don’t like to meet with the person they are buying the house from and it makes the situation uncomfortable. A buyer can’t ask a seller property related questions on matters such as servitudes, zoning rights and market trends in the neighbourhood. Sometimes sellers say things that inadvertently put a buyer off the property. The problem is that the process becomes personal and buyers and sellers get emotional when buying property. The buyer may also say something that doesn’t sit well with the seller and even if that buyer is willing and able the seller may be unable to put emotions aside in order to get the sale through.
These companies have also stated that ‘traditional’ estate agencies do not have the technology to compete and that is why their fees are so high. I fundamentally disagree with their views and you will find that many real estate companies are focussing on the technology that they offer to empower their agents to be more efficient and effective. Harcourts have a world class system that assists with database and listing management and have even developed a number of apps, endorsed by Apple, that agents can use while on the go. The Harcourts technology roadmap takes the best ideas from people on the ground from all over the world so this will place us in a good position going forward.
Perhaps most importantly, it takes a lot more to be a successful real estate agent than taking good photos, posting the listing on websites and boosting posts on Facebook. There are agents in our group who have been in this industry for over 40 years. They are still relevant today because of the knowledge that they provide to buyers and sellers, and we all continue to learn from them. Property transactions can be complex and if they are not handled correctly, any possible sale is bound to fail. Technology is an enabler to produce more effective marketing and make us more efficient in our day to day tasks but it can’t handle the emotions of buyers and sellers, it can’t make a deal work that was bound to fail and it can’t gain the trust that a good agent can when dealing with buyers and sellers. It is true, you get some terrible agents out there that aren’t worth the commission they charge but there are others who are worth every cent.
In our business we have always focussed on relationships and offering a personalised service to our clients. These ‘disruptors’ have changed from a relationship approach to a commodity approach. They may offer 24 hour service but most times you are talking to a computer or call centre agent. Our agents are on call on evenings and weekends. Our valuations are not based on gut feel but rather on our intricate knowledge of property and the markets in which we operate. Our technology gives the seller full transparency with reports showing website activity, enquiry details as well as feedback on viewings. Many of our agents have degrees and many don’t but when you have 40 years of real estate experience behind you and constant real estate training from the Harcourts Academy what does a degree matter.
It is interesting to see how these 'disruptors' are slowly changing their business model placing more emphasis on the importance of the agent and no longer advertising their one flat fee. It seems that the business model wasn’t sustainable and that they have maybe come to the realisation that there are many good, knowledgeable, trustworthy and professional agents out there that aren’t in the business of ripping off their customers.
Marc Rodrigues - Principal
9 September 2019