Online house sales the wave of the future

By Helen Vause

When an 80-year-old North Shore man decided to sell his home, it was listed on the internet. The house had a great view of the America's Cup course. When the man visited California, his octogenarian host was able to go online, see where he lived and take note of the gulf panorama.

These two ageing techno-adopters were sitting in San Francisco at the very modern end of communication and marketing in real estate. It may not have sold the property, but it was a sign of new times in advertising and marketing.

For the real estate industry, going online seemed an obvious move, but it was not a step all industry members believed to be wise.

Realenz, with some criticism from the industry, was launched three years ago as a joint venture with equal shareholding by the Real Estate Institute of New Zealand and the Auckland Multiple Listing Bureau.

So was it the marketing tool to revolutionise the business of selling property? The short answer is: probably not yet. Nevertheless, the Realenz site now has a very active presence and is one of Telecom Xtra's five largest websites.

Realenz claims to have more than 32,000 active property listings with upwards of 10,000 visitors daily and around 240,000 properties viewed. Nationwide, about 900 real estate offices out of a total 1500 are subscribers to the site. Realenz says about 2000 new listings are entered weekly and growth this year of listings, visits and properties viewed is in excess of 300 per cent.

What this means in terms of selling properties is the big question. On the most recent anecdotal evidence, Realenz chief Ross Barnes says 4 per cent of inquiries from the website have turned into sales.

The Realenz list of subscribers includes offices of Harcourts, First National, Century 21, The Professionals, Ray White United, L.J. Hooker, Bayleys, Wrightsons, Real Estate Network, Nationwide, Olsen-Everson, Harvey Corporation and Allens. Notably, one of the big players, Barfoots, is absent.

The joint venture was set up between the two parties, says Mr Barnes, based on a perceived need to provide the public with a mass medium and to bring the marketing benefits of computer technology to real estate agents.

The idea was to give rapid and wide-reaching exposure, acknowledging that, once a likely property was identified, a prospective buyer would still want to see the bricks and mortar with a professional agent.

The site listings are sorted in a consumer-friendly way by area and price. This makes for easy viewing and gives people the chance to research the real estate market without the very time-consuming hassle of driving around properties with agents and visiting endless open homes at weekends.

Interestingly, the Realenz site has an increase in visitors during weekday business lunch hours.

The arguments from real estate agents against this property advertising and marketing site were twofold.

Some considered that it was not an appropriate business for the Real Estate Institute to be in.

The other argument had to do with safeguarding the professional interests of real estate agents and their traditional style of selling property. For the successful agent, that meant nurturing a wide range of relationships and contacts to get properties and buyers, combined with the legendary sales skills that end in making a successful deal.

They feared the website could give buyers too much information and too much power with the in-depth market knowledge that had traditionally been part of an agent's marketing arsenal.

At Barfoot and Thompson, managing director Mark Thompson has reservations about the site as a property marketing and advertising medium.

"Considering the expectations and the huge input of money, I feel the performance of this site so far as a marketing tool has been disappointing.

"There is the thinking that, in a perfect world, buyers don't want to have contact with agents until they have done their homework and found the property they want.

"Professional experience shows that the average person doesn't know what want when they set out to buy a house. Time and again the person who says they want a three-bedroom villa in Mt Eden ends up buying a four-bedroom brick-and-tile with a swimming pool in Mt Albert."

The reason for this, says Mr Thompson, is that the professional skills of a real estate agent are the key factor in bringing buyers to a property that actually meets their needs.

Nevertheless, he is open to changing his position on internet property marketing.

"If and when it starts helping vendors to sell houses, we will probably be in on it - or set up our own site. We'll invest when we consider it is working well and the time is right."

As time and research continue to throw more light on the impact of this growing property website, Realenz management is about to launch another marketing strategy for subscribing agents.

By early next year, agents will be able to have their laptops loaded with the database and will therefore be able to "show" properties in the nation's living rooms - rather than leaving potential buyers to surf the site alone. Automatic e-mails of potentially suitable listings will be targeted to prospective buyers with the new Realenz technology.

While politics rumble on over internet marketing, three outside organisations have invested advertising dollars on the site - BankDirect, the National Bank and, from this month, the Office of the Retirement Commissioner.