We sure are living in interesting times and if you are like us, you will be feeling a little uncertain about the future.
There seems to be only two ways to look at the future – the prospect of doom and gloom or with confident optimism.
Doom and gloom do not suit us, so we have no alternative, but to be upbeat and optimistic.
The most important message at the moment is –
The TEAM at Drummond Real Estate are working as hard as ever,
helping people buy and sell real estate, just as we were before the arrival of the pandemic.
That said, things are a little different today, but for us, not by much.
While the front door of the office is closed for now, for the protection of everyone, most of the TEAM are working remotely.
Every other aspect of what we do as Estate Agents is happening as normal.
- Conducting one on one home inspections and
- We can inspect, assess and list property as before.
- If we are unable to get face to face personally, we can meet electronically via Zoom or other providers.
- It can even be done on a phone like you might with family on FaceTime.
- Even the paperwork can be done digitally these days.
Buyer enquiry over recent weeks has been surprisingly plentiful. If we have one problem, it is the fact that we are short of properties to sell. People have often asked us in recent weeks “How are properties selling?” The answer is “amazingly well”. The reality is – if we had more properties to sell, we could sell more property.
And if you think prices have fallen, do not be misled. That is not the case. In fact, in April the evidence tells us that prices actually increased. The trouble is if you listen to the doomsday economic forecasters promoted by the media then you can form a different opinion. The facts are different.
Recently we talked with Terry Ryder (Australia’s Leading Independent Property Researcher) of www.hotspotting.com.au and he paints a very different picture. Should you feel inclined and have a serious interest in real estate, maybe you should take a look at what Terry has to say. You can also see the interview Josh, Rion and I did with Terry. It is on our website at www.drummondrealestate.com.au/hotspotting
Terry’s research covers real estate all over Australia. He firmly believes Albury Wodonga is one of the standout regional cities in Australia to live, work, buy and invest in real estate for all sorts of reasons. It is worth hearing what he has to say.
Most of us have been spending more time at home recently, more than we have for years. We know lots of you have been sprucing things up – fixing, painting, redecorating, gardening, etc. That means you have at last got around to finishing those jobs you have wanted to do for years. It could be your home is now in the best condition it has been for years. Maybe now is the time to sell.
You may have also been thinking of moving at the time COVID-19 interrupted you. Moving may be something you were contemplating if not now, in the future.
Whether you are thinking of moving or not, it may be an appropriate time to obtain an updated opinion of current market worth – for FREE as well as have a chat about what, how, when and why you may consider moving.
That is right – an OBLIGATION FREE ASSESSMENT. It does not and should not take long. In reality, it may only take a few minutes unless you want more help and advice. The time involved is entirely up to you and the questions you ask.
Often there are more questions needing to be answered than just “What is my property worth and what will it cost me to sell?” We would be pleased to spend the time with you particularly if it provides you with clarity about your future.
Other questions might be – Do we paint first? Do we do up the kitchen or bathroom? If we did sell, can we or should we, buy first? It could be a question about how much money will you have available if you sell at a certain price. So, the questions can go on. Really that is the easy bit.
There are also things to consider about method of sale and marketing. These are the areas that can cause the most stress.
One of the most interesting outcomes as a result of this pandemic is that Public Auctions and Open Homes have been banned. As I write this it is apparent, they are back as before and/or in some altered online format. Somehow, we are not convinced the online format will work effectively in the longer term once the public option returns.
Drummond Real Estate have not been fans of Auctions or Open Homes for years, with good reason.
Over 20 years ago I personally conducted up to about 250 Auctions per year and while I could still do them, I have chosen not to recommend Auctions for good reason since that time.
Here are some facts and information about Auctions.
- In the whole of Australia only about 10-15% of property is listed for Auction and a significant percentage do not sell on the day. Locally, auctions conducted year in year out amount to less than 10 % of all transactions and based on our research over the last few years about 75% fail. A few sell prior to auction and obviously some sell after auction day by private treaty. The reality is the majority don’t sell at Auction. If anybody wants to tell you otherwise, I believe they are fudging the numbers.
- Auctions are also about conditioning sellers to a price, the reserve price, the sellers’ lowest price. It is a system that is fundamentally flawed as the focus is on what the seller should take and not on what the buyer will pay. It is good for agents and even good for most buyers, but seldom likely to be best for sellers.
- What about the time people “compete” to buy a property? Well that does not occur as often as auction agents would like us to believe. In the end the underbidder is the only person we can be certain has paid their highest price. The question to be asked is “Did the highest bidder pay his or her best price or was it just one more bid than the underbidder?”
The whole auction sales exercise is more comparative than competitive.
- When a property sells over a sellers’ reserve price my question is, why is that considered a measure of a success? I have seen plenty of examples over the years where buyers would have paid substantially more to acquire a property, but because they purchased at auction they did not have to. The focus should be on the buyers’ highest (fair) price. Auctions seldom do that!
- Why are Auctions seen as “popular”? If you look at the statistics, they are really not that popular. The media loves to promote auctions and fudged auction results. As I understand it the big portals such as REA and Domain are owned by big media. They have a vested interest in agents selling advertising space – in the papers and on the internet. Auctions are not so much popular, but are in my opinion part of the overall “con” by media and many agents. It’s not about what is best for sellers, it is about cash flow and profit.
- Auctions are also about agents avoiding offering a truthful opinion about the likely selling price. We call it the “Quote Lie”. An agent quotes a high price and/or avoids the price to win the business. From then on, it is all downhill. It is so easy for an agent to say, “Lets Auction it and find out”, and while you are at it, you (the seller), will have to pay for the advertising (whether it sells or not). It is a “cop out”. Most agents do not have the courage to tell the owners (prospective sellers) the truth. The whole process is about “conditioning” sellers to accept a price.
- They also want sellers to pay for the advertising on the pretence the property has to be advertised to attract buyers. There used to be a saying to encourage sellers to spend money on advertising. It went something like this “you must advertise, you can’t keep it (your property) a secret”. In the past that may have been true. Not so today. If a property is promoted for sale on the internet it is there for everybody to see. There is another whole story I could write about the danger of what is known as the “digital footprint”. The marketing history of your property never goes away.
The main reason agents sell print media advertising (and premium advertising on the major portals) is to have sellers paying to promote their agency. Nothing more!
They then use the Auction (or other no price or price range systems) to “condition” a seller(s) into accepting a price lower than they were initially led to expect.
Vendor Paid Advertising (VPA) was seldom used back in the 70’s.
It came into being when governments in their wisdom fixed agents’ maximum fees and agents had to charge VPA in order to survive. The problem then, as it still is today, is different agents provide different levels of service and offer different levels of skill. One size (or fee) does not fit all. All agency businesses are different. Fixing agents fees proved a failure. The outcome was deregulation. It just took a few years for governments to recognise their mistakes. VPA stayed. It became the norm. I firmly believe it is totally unnecessary.
Once VPA came into being as a regular practice the media encouraged more and more of it. The Melbourne Age newspaper lived off real estate advertising. It was referred to as their “Rivers of Gold”. The “Rivers of Gold” for print media have almost stopped and so has the profitability of that business model (see what has happened to the share price of Fairfax Ltd over recent years). The “Rivers of Gold” have shifted to the major internet portals.
Print media survived on agents selling bigger and more advertisements until the internet arrived. It still happens, just not as much. Open the local paper on a Saturday and see for yourself.
Now the same is happening with the digital portals. Another sham. Agents generally are being almost forced to sell more and bigger advertisements on the major portals and as it happens the unsuspecting sellers are being “taken for the ride”. It is an all-consuming vortex that is totally unnecessary. What we have done at Drummond Real Estate proves premium advertising on major portals is totally unnecessary. Paying for it is like smoking $100.00 notes. A waste.
Real estate advertising sells newspapers not real estate.
You may have noticed Drummond Real Estate has barely spent a cent on print media advertising for some 25 years. We recognised years ago print media (whether it be our sellers’ money or ours) was a total waste. Some people may feel their property needs a full-page, full colour promotion, but what for? We have proven it is totally, and I mean totally, unnecessary.
Drummond Real Estate still sells a lot of property in the region in all price ranges without wasting sellers hard earned money.
The same goes for sellers paying for premium advertisements on the major portals.
Most people have access to the internet these days. If they want to search for a property in a particular area, all they need to do is put their criteria into a search engine (Google, Firefox etc.) and every property in that category will come up.
If you think about it, the reality is, paying for premium advertising on the major portals is of no real advantage to any seller. It is a money gouging exercise by the major portals. Sadly, agents in general are gullible enough to be conned into being advertising agents for the major portals. They are now selling premium advertisements on the portals at additional expense to sellers, just as they did with the print media, not many years ago.
Open Homes have also been banned during these times to assist with social distancing measures. They too will return.
Drummond Real Estate have not conducted Open Homes for over 20 years.
Again, with good reason.
In the past when we did Open Homes it is fair to say we did them to pull a crowd – sticky beaks and neighbours and if we were lucky – a buyer. The trouble we had after an open home was trying to “sort the wheat from the chaff”. Who were the real buyers and who were the “sticky beaks”? It has even been said – by having an open house and inviting people into your home should something be stolen or damaged then you may compromise your insurance. That in itself is a good enough reason not to consider an Open House.
It is so easy for agents to say to sellers, for example – “We had 10 couples visit your open home today”. They don’t say – “I do not think any of them were real buyers”. It’s part of the conditioning process. Mostly it is misleading information and may I say, untruthful.
Our decision years ago was to not conduct open homes as such, but to conduct all inspections with qualified buyers in person. The outcome – we have a far better chance of establishing the credentials of the buyer(s), to negotiate with them, to spend time with them and to get to know them and their ability to buy.
I hate to say it, but open homes are a lazy agents’ way of getting to talk to people with the major purpose of finding out if they are considering selling in the future. Those agents are hoping for a “lucky accident” – hoping a buyer will turn up. Open homes are a listing tool for agents rather than a selling tool.
If you have taken the time to read this, you may now understand why we have not held Auctions or conducted Open Homes for over 20 years.
We get far better feedback from our buyers when we conduct private inspections, even if your home is not the one for them.
A well-educated buyer has a better knowledge of what homes/properties are available in a particular market. They see them all on the internet and they look with and make contact with every agent who has a property they believe will suit. They become the best judges of value in the marketplace. Better than agents and sellers. Better than anyone.
A good agents’ job is to establish and negotiate the very best fair price a buyer will pay for a particular property on behalf of their client (a seller). Sadly, many agents forget that moral and ethical responsibility – they do not negotiate, they compromise. Often, they just “split the difference” to make a deal. That is not negotiation. In the end most sellers never find out their buyer could have and would have paid more.
If you are considering selling at any time in the foreseeable future, there are lots of benefits in considering Drummond Real Estate as your agent.
Here are some:
- When you engage one of the Drummond Real Estate agents to help you, you have the benefit of five other agents. That is right, you get the benefit of working personally with one agent, but have the whole TEAM working for you. Does it not make sense to have six committed agents in your corner?
- It is quite a unique situation, as Drummond Real Estate salespeople are all paid by way of a generous salary and bonuses. It allows them to work as a TEAM and help one another achieve results for every seller. That is not how it happens in most real estate offices. Generally, agents are hired on either commission only or debit/credit systems and in most cases, while they may be working in what appears to be a team, they are actually working as independent agents.
In most of the supposedly big franchise groups that is the way it is. It really is another con. They want you to think you, the seller has this massive machine helping you sell. It is a nonsense.
- If your agent is away on holidays or ill, who is helping you, the seller? At Drummond Real Estate there is always good skilled back up and support. Examples of how that is happening are easy to pick when you know what to look for. If the For Sale sign has a mobile phone number (or worse still an agents’ photo) then that will be the way it works. Who follows up when the agent is away at the footy, a Sunday BBQ, on holidays etc?
- At Drummond Real Estate by way of contrast all enquiry is directed through one number to a message bank and a salesperson on duty. Calls and internet enquiries from buyers and sellers are answered 24/7. Nothing gets lost (or should not). It also means we do not need to spend heaps and heaps of sellers’ money to keep buyer enquiry coming.
- These days we even have the benefit of buyer matching. That means we often have properties being sold to our “bank” of qualified buyers before a property “goes to market”. You will hear this referred to as an “off market transaction”. By investing in and developing an extensive data base combined with modern, effective, low cost marketing we can at Drummond Real Estate often have buyers waiting. That does not mean selling cheaper because it was a quick sale, it just means we have invested in the marketing before your property is listed for sale. Today that is classed as proactive marketing, rather than reactive marketing. It is really like investing in machinery and equipment in a factory. At Drummond Real Estate we have invested in technology and people. They are exceptionally valuable assets.
- Our selling system or contract of engagement with every seller is Totally Risk Free. Simply put, it means if we do not sell your property it costs you nothing. In other words’ you pay nothing until your property is sold and settled. There are no hidden costs or upfront costs such as VPA.
How real estate is transacted these days is quite different to what it used to be. While building relationships has always been important to good agents, it is only part of the process. Buyers do not walk into a real estate office to find out what is for sale anymore like they used to. They do their homework on the internet and email or text for an inspection.
The intriguing thing is, despite the evolution of the internet and other changes to the profession, most agents still adopt old habits such as Open Homes, non-performing Auctions and wasteful VPA and have not moved with the times. Old habits die hard.
Thank you for taking the time to read this letter. Its purpose is to make you more aware, to educate, to maybe make you think about the process and to know what to look out for should you be considering selling any time in the future.
There is lots more that could be said. That is for another time.
If you have further interest you are welcome to call me personally (02 6041 5755) or send an
email email@example.com at any time. You can check us out on our website at www.drummondrealestate.com.au or follow us on Facebook, Instagram or Twitter. We welcome any comment too. The decision is yours.
Drummond Real Estate Pty Ltd May 2020