Member log in

Could the agent boycott of Trade Me end up driving more people to private sales?

The old adage that ‘perception is reality’ could potentially be occurring in the minds of property buyers and particularly sellers in the Hawke's Bay and Hamilton areas of the country. For if you were a normal everyday property buyer or seller using your usual means to keep in-touch with the property market through email alerts and web browsing, what you would notice in these two regions is that there seems to be far more ‘Private Sale’ properties being advertised on Trade Me.

This increase in private sellers is the perception. The reality is that there are less agent listings. 

What the real estate agents undertaking this boycott need to appreciate is that their next client is not that likely to be reading this article (I actually hope they are) nor the other media outlets that are discussing this issue - their prospective clients are browsing the news headlines and then reading the weekly women’s magazines!

These clients pay no attention to the number of listings on any page - all they want are new listings. They continue to turn to Trade Me every day in huge numbers to view new listings. There may be less new listings but how are they to judge the reason for this?

They certainly are not likely to stop using Trade Me Property to browse property for sale - why should they? They have been doing it for years and in their mind's eye nothing has changed. The site looks identical and new properties come on the market every day. They are not conscious that there are less (in fact no) new properties from the likes of Property Brokers, Tremains, Lugtons, Lodge and Harcourts. What they do see is far more properties coming onto the market from private sellers.

Just compare the first page of new listings in the Hawkes Bay with a comparable region - say New Plymouth in the Taranaki. In New Plymouth the first page with 50 listings consists of six private sale listings - 12%. On average Trade Me property comprises around 16% private sale listings on average. Now examine the first page of 50 latest listings for the Hawkes Bay - 40 of the 50 are private listings - 80%!

Untitled_2-12.png
Latest_property_listings_in__Hawke_s_Bay__—_Gmail__All_Mail_-11.png
To the average property buyer searching the site today the one thing they notice is less agent listings. Do they instantly think - "Ah yes of course my local agent is boycotting Trade Me so I must switch across to Realestate.co.nz" or could it be they think - "ah more people seem to be trying to sell privately, this must mean something. Maybe when we come to sell we should try a private sales, after all everybody is doing it and it only costs around $400 which compares to 4% commission which based on the median price in the Hawkes Bay at $279,000 means a cost to me of $12,834 inc GST".

This is the second time in the past 12 months where I perceive that the real estate industry is maybe shooting itself in the foot - earlier it was their fondness of auctions that may be their downfall Now it is their challenge to fees from Trade Me - chinks in their armour they may be; but sometimes death by a thousand cuts can be fatal!

Former Realestate.co.nz CEO Alistair Helm is founder of Properazzi.

Comments and questions
9

As a buyer, how hard is it to type the web address of my local land agents, ie leaders.co.nz, harcourts.co.nz.
On those sites I get more information, direct web links to other sites and often a 360 degree panoramic viewer.

Who can blame the Hawkes Bay real estate companies, 50 listing on Trademe is about $20,000, better to spent that developing/marketing their own sites.
Trademe is the last place I'd look.
As for "vendor disservice", chances are the vendor would be paying for the trademe marketing fee and has opted out.

Alex F I would like to make a comment or two on points you have raised.

I n regards to you statement " Trademe is the last place I'd look"
I assume your remark refers to you as a buyer, then given the large amount of stats available and I say with respect then your actions would not be that of a typical or average buyer looking to purchase residential property.

Evidence would suggest quite the opposite to your personal view.

Secondly. $20,000 developing their own sites you suggest.

It is one thing to develop a site and keep it up to date with great content, but the real success comes and this is where in my humble opinion a vast majority fall down with a crash, is getting traffic to you site and the correct traffic.

Your last point does raise some doubts for me on my understanding of residential marketing of properties and I need to be corrected on my assumption which is . doesn't the vendor pay for most if not all the advertising today?

I don't think that I have ever looked at a real estate agents website - because I don't care who I am buying a property off. I just care about the number of properties for sale and the ease of use (and accuracy) of the search functionality to trim down what I see.

I therefore mostly use TradeMe - as it shows both agent and private listings. The lack of private listings on realestate.co.nz means that it is relegated to just viewing property porn that is completely out of my price range but something that I can dream about!

Great to read perspicacious analysis of the RE industry from one of its own. The truth is very much fudged by the RE industry when it comes to market analysis. They fiercely protect their systems, their MOs but as you have noticed, cracks are appearing in the RE castle walls. The sole agency nonsense will be the next pillar to tumble.

I'm an outsider on this one. But I do see Trade Me getting greedy, so I have no respect for them.

The downside of private enterprise..Take what you can get...Greed.

Totally agree with this comment. Trade Me had the reputation of "friend to the underdog". People are forgetting that Trade Me fees for private sales has doubled in the last couple of years. Then Trade Me tell Real Estate agents we're putting your fees up for advertising listings but no worries YOU JUST CHARGE THE VENDOR. Nice one Trade Me. But in the end I have to agree with Aistair something has to change in the industry because Real Estate Fees are too high. Their is not enough protection out there for the buyer in a private sale which is where agents really do a great job.

Bought / sold 3 houses on TM..no Agents. Prices happy both sides, $1500 for lawyer to verify sale and purchase agreement and legal titles, bank etc. The more agents kick up the more they expose themselves to computer savvy people doing it alone. Commissions are too high for the 'service'. Trademe fees are currently fine, and if they rose they would still be better value due to the audience exposure. Agents need to stop being so precious or they like all outdated technologies will go the way of the dinosaur. What is really so different between selling a house and an expensive car?

Richard you have raised some very valid points.

The question that residential agents refuse to answer is this one.

What added value do agents bring to the table that can't be done by most vendors?

It use to be market knowledge, marketing and property exposure, negotiating skills, property information and sales stats/ trends, and writing up the contract and associated business.

No longer are these knowledge and skill base traits the sole ownership of residential agents, but the agents are slow to pick up on this so have to do self marketing to convince the public that only you licensed agent has the skill set and knowledge to sell you property at the best price.

It is crap.

As you point out Richard it is cheaper at $1500 to have a lawyer draw up the contract and place the deposit into the Public Trust so the agent gets paid out asap.

In essence what I am saying about residential agents is this.

The benefits that use to exist before the onset of the internet is fast disappearing and sooner rather than later more and more vendors will realise that agents don't bring as much value to the table as they might like one to think.

I can also see the day when a new portal or concept for selling real estate will exist using only the internet.

I see such a emerging trend already in the USA and expect this trend to gather pace once the model is fine tuned and the public are educated to the puffery and exaggeration that generate out of the offices of so many residential agents.

Much as like cars, I see the day coming when people buy and sell using 'ownership paper' transfers.