8. Marketing know-how

By VICKI HOLDER, editor Weekend Herald Real Estate

A real estate person should have a thorough knowledge of all sales methods and be able to recommend one best-suited to your property and circumstances. While talking about what is happening in the marketplace, you are not only testing the salesperson's market knowledge, but you are observing their ability to give qualified information back to prospective buyers.

Get them to explain the pros and cons of all methods and the processes involved, so you feel comfortable with the one you choose. Ask for written testimonials from other people who have sold by this method.

If the salesperson recommends an auction as the preferred sales method, make sure they are proficient in this area. Says Barry Thom, of Unlimited Potential, Remuera: "There are a range of skills required to market without a price to encourage buyers' interest without giving away the vendor's position."

Mark Sumich, of Cahill Real Estate, adds: "You've got to go out, look around and see what people are doing. If the salesperson recommends an auction, go and look at them."

Agents must understand how marketing works to the vendor's advantage. They must explain the need to expose a property to all potential buyers through a carefully planned promotional campaign. Salespeople should talk to vendors about who they believe the buyer will be. From there, they can devise a strategy to target those buyers.

Don't be fooled by salespeople who claim they know the area better than other agents so they can pull buyers more effectively. Nobody knows where the buyer will come from. The idea is to throw the net as wide as possible.

Geoffrey McRae was Bayleys' salesperson of the year for 2000 and consistently rates as one of New Zealand's top sales people. He attributes his success to being able to giving vendors carefully planned marketing strategies. "Because I'm a good lateral thinker, I do what others may not have thought of doing. I have a plan for every property and I stick to that plan to achieve a high level of selling. These days, it's an international market, so I have developed a complex and sophisticated data system. I also employ someone to keep it up to speed.

"The internet and database work well for me. You have to have high-quality marketing. And it's got to be instantaneous. Technology is really important. I am constantly looking for new ways to improve my edge."

Mark Sumich says a good agent prepares a detailed marketing programme, a written marketing plan with a timetable. "Vendors pay a lot of money, so they expect organisation and detail.

"You must get a guarantee they will give written feedback of all people inspecting the property with the prospective buyers names and their comments. There's too much wishy-washy stuff going on with real estate salespeople who simply say, 'We had three people coming through and none of them liked it.' That's just not good enough. You need comments to give people an idea what the property is worth. Vendors need information."

Good real estate people will give an assurance that they will bring their vendors every offer regardless of price. Says Armon: "I will negotiate with each buyer until I can't obtain another dollar out of the purchasers. Finally it is the vendor's choice whether they accept or decline any offers presented."

Adding value

Salespeople have a responsibility to build value into a property. Barry Thom is passionate about the importance of great presentation. "We spend a lot of time and money with our imagery so the buyer's perception is enhanced from the outset. We think, 'How can we use the advertising space to genuinely add value for the home owner?' There's a huge amount of value in design, layout, good copywriting, lighting, the right camera angles for photography and so on.

"The person representing you has to be smart enough and pro-active enough to get the right interest, understand buyer reaction to the property and if it's appropriate. If it's not, you need to reinvent the home to appeal to a different group of buyers which may be more appropriate."

That involves continual re-evaluation of the marketing programme in discussion with the home owner. "The salesperson and home owner enter a partnership with the purpose of selling this product. I look for, enjoy and need the home owner to allow me to go down the track of presenting their home in a certain way. They need to be prepared to give the creative licence to allow the agency to reach their market."

On commission

Most real estate agents are happy to talk about commission. Some have sample fees already itemised in their promotional material. But if commission is not raised in discussions, make sure you clarify this fee.

Most agents' commission starts with a $500 administration fee. They then charge from 3.85 to 4 per cent on the first $250,000 to $500,000. The percentage reduces to 2 per cent on the balance. And because it is a service for selling your house, vendors also pay GST on commission.

Ask the sales person to explain exactly what the commission covers. Also ask for a breakdown of your promotional costs. Mark Sumich finds that, "If people know that the job is going to be done thoroughly with an organised plan of attack with an obvious conclusion, the commission is less of an issue."

When things go wrong

When things go wrong or when vendors and purchasers aren't happy with how a sale is proceeding, they should call a meeting with the salesperson, suggests Barry Thom. Talk through the situation and it can usually be resolved quite simply.

If not, call the Real Estate Institute of NZ (REINZ) who will suggest talking to the licensee for the sales person's office. Gordon Meyer, professional standards manager of the REINZ says 60 per cent of concerns are resolved this way.

If the concern is not satisfied by the licensee, people are invited to send a written complaint to the REINZ. All complaints must be investigated. A copy is sent to the licensee, who is required to respond. That response is sent to the complainant. If things are still not resolved, the matter goes before an investigation sub-committee, which will decide whether rules and codes of practice have been broken. The sales person may be charged before a disciplinary sub-committee and fined up to $750.

Alternatively, the matter may be referred to the Licensing Board who may also award costs, though no compensation is given to the complainant. Those who require compensation have to go through the Court system.

Meyer receives thousands of complaints a year. Only 30 to 50 cases are found to be justified. Most are minor. The most serious usually involve allegations of misrepresentation. A recent one involved a salesperson who altered the listing form by forging his vendor's signature. He was suspended, fined $400 and ordered to pay costs.

QUESTIONS TO ASK YOUR REAL ESTATE AGENT

- Do you have testimonials from other vendors?

- What do you personally offer that will help me get the best price in the shortest possible time for my home?

- Why should I choose you rather than any other salesperson?

- What experience do you have?

- What is the market doing in this area?

- What things are influencing the market at the moment?

- What prices have been achieved for properties similar to mine?

- How positive do you feel about getting a good result for my property?

- Who is my target buyer and why?

- How will you present my home to buyers?

- Which advertising media are likely to bring the best inquiries? Why?

- How much is the cost of the marketing campaign?

- What do I get for my money?

- How do you evaluate the effectiveness of the marketing campaign?

- What part of the marketing plan is paid for by the agent?

- How much is the commission?

- What services do you get for your commission?

- Who pays for the sign at the gate, in the agent's window, the open homes, brochures, photography, copywriting?

- What about the cost of using the database, the mail-outs, the internet?

- When is the commission paid?

- When is the marketing campaign paid for?

- Which sales method do you recommend will work best for my home? Why?

- How does this method work?

- What experience do you have in selling through this method?

- Can you show me figures which prove to me you have been successful in selling other properties this way?

- What feedback will I get? How frequently will I receive the feedback?

- What advice do you have on the presentation of my home?

- How will you conduct the open homes? What features and benefits will you be pointing out to prospects?

- How does the vendor bid work (if selling through the auction process)?

- What if the marketing does not produce any offers?

- What happens if the price offered is not high enough?

- When does the buyer pay their deposit?

- When should settlement happen?

- What chattels should I include in the sale?

* This is the final article in our series. We welcome your comments and ideas. Please send them to Real Estate Summer Feature, The New Zealand Herald, PO Box 32, Auckland.