Joneses aim to stay ahead of real-estate pack

Founding members of the Joneses (from left) Chris Taylor, Peter Botica, Peter Gilchrist, designer Andrew Haines and Chris Knox.

Keeping up with the Joneses has taken on another meaning in real estate with the launch of a new chain of agents.

Former Vodafone NZ director Chris Taylor has joined three other businessmen to establish The Joneses, promising a flat fee of $7995 to sell a house regardless of the asking price.

Real estate trainer Peter Gilchrist, business executive Peter Botica and marketing expert Chris Knox are founding partners of the firm.

Offices opened this week in Wellington, Christchurch and Dunedin but Taylor said by this time next year, the firm could have 20 branches. Staff had been employed from other agencies, including Bayleys and Harcourts.

And the firm's big attractions? Low fees to pull in listings and a salary-based payment to attract agents.

"The fundamentals of the way the real estate system works now are flawed due to the focus on commission-based sales," Taylor said.

"The commission system ... is unfair to customers and often results in poor service delivery. Competition between agents to win commissions doesn't benefit sellers or buyers."

Harcourts chief Bryan Thomson challenged the new agency.

"Our industry is full of examples of new structures that have failed to deliver and companies promoted as the next big thing that have faded away.

"We find sellers and buyers make their decisions based on value rather than price," Thompson said.

The new agency's name draws on the New York Times syndicated cartoon Keeping Up With The Joneses.

"It encapsulated the values we're about," Taylor said, "that really straight-upness because real estate is about people and homes."

The Joneses' website says the firm exists because it believes New Zealanders get poor service and pay too much for selling their houses.

The Joneses, which is headquartered in Auckland, has launched an online calculator enabling vendors to see the price differences between the two systems.

The agency offers to cut traditional commissions. Owners of a house selling for $1 million would pay around $30,000 in standard agency commissions, according to the new agency's calculator. Paying a flat fee to The Joneses would save the owners about $21,000, the new firm claims.

Taylor said the country had too many agents. Real Estate Institute figures show 17,000 people are working in the business, up from the 12,000 earlier this decade.

"We all know that big growth in the industry was due to a lot of people taking the opportunity to make a fast buck," Taylor said, who also said the industry's disciplinary procedures needed to be overhauled.

A large marketing budget had been devoted to the new business. "We aim to be big ... we believe there's a place for a strong national brand," he said.

Agents seeking to work at the firm are being encouraged to buy into the business for varying amounts. Taylor said some had paid $150,000.

Andrew King of the Auckland Property Investors Association welcomed the new agency. Paying agents salaries might improve standards because too many agents were "falling over each other" for deals.

But King wondered if the $7995 flat fee would include marketing and advertising a house. Taylor said vendors would pay extra and sales promotion was not included in the flat fee.

Real estate author Terry Ryder estimates Kiwis and Australians paid A$5 billion ($5.95 billion) annually to sell their properties. He encourages people to sell their own houses and says New Zealand could save $1 billion annually by doing so.