Real Estate Costs. Are they making you see PURPLE?
Every time I have turned on the television over the past 6 months, I have consistently seen advertising for the new low cost and fixed price real estate agents Purple Bricks & Upside.
Both brands have certainly built some awareness but can the 2 new real estate disruptor brands keep momentum without heavy marketing investment?
The early data below suggests this maybe a challenge.
I know it’s easy for people to criticise the amount real estate agents get paid in commissions but here are some facts to consider:
- Only get paid when your property is sold (that’s a great incentive for agents to work for you)
- Share the risk of working many hours and potentially getting nothing if your property does not sell
- Work 6-7 days per week
- Handle incredibly complex and emotional negotiations on our most valuable asset
Rather than focus on the ‘emotional argument’ of real estate commissions, I think it’s time to take a look at the total net costs of selling your property.
- Vendor Marketing Schedule
This is at the vendors risk and investment. Campaign Marketing costs for your property will vary between $5-$30K in metro areas
- Real Estate Agent Commissions
Generally 1-3% of the sold price of your property
- Referral Commissions
20-40% of the sales commission your real estate agent makes from your property is then paid to companies like openagent.com.au and localagentfinder.com.au
This highlights that many companies, other than real estate agents, are making large amounts of money from the real estate transaction process in Australia.
The Major Real Estate Website Portals
The 2 big website portals, realestate.com.au and domain.com.au, continue to dominate however;
- Does your property really need to be listed on both?
- Are feature listings really worth it; given the portals already have access to so many eyeballs?
Major Real Estate Franchise Networks
Aside from seasonal variations most real estate franchises such as Raine and Horne, Ray White, L J Hooker, First National, Century 21, are holding their ground and leveraging their databases to maintain market share.
Accessing this type of traffic and the contact database of agents is potentially critical to the successful sale of your property.
Real Estate Research & Referral Sites
VIEW.com.au (the new realestateview.com.au) and the new “property insights” part of their website has become a leader for property and suburb information, overtaking onthehouse.com.au.
OpenAgent.com.au appears to be the number 1 player in the agent referral market. They receive referral fees from real estate agents.
Real estate information sites receive 4-5 times more traffic than the referral sites, which poses the question on how much ‘real value’ they are providing when recommending real estate agents.
Other Real Estate Website Portals
The data shows realestateview.com.au & allhomes.com.au provide very good monthly traffic volumes amongst active real estate buyers and that homely.com.au and homesales.com.au still provide good traffic but are in steady decline.
Conclusion & Summary
- Real Estate Agents still have very strong online and personal networks to sell your property.
- Choosing discount options like Purple Bricks and Upside will save you money on sales commissions but may also reduce your access to a serious pool of qualified buyers.
- Have you considered what impact listing with a discount real estate disruptor could have on your final sale price and the negotiations leading up to the sale? It’s all about perceived value. You might not attract the audience your property deserves. This is definitely something to consider.
- The value equation of a large marketing spend on a second major real estate website portal would need to be questioned in certain metropolitan markets.
- The 20-40% spotters fee being paid to real estate referrers maybe hard to sustain without adding more value to the real estate transaction process.
- Agents and vendors would benefit from savings and reach, from diversifying their online media spend into niche and specialist websites like realestateview.com.au and allhomes.com.au which are reaching active buyers in the market.
Let’s not forget, most of us would be happy if 2-3 bidders showed up on Auction Day.
In 2018 and beyond, there is a real opportunity to challenge the standard real estate marketing / advertising schedule and save thousands of dollars for a holiday in the process.
The digital statistics show that most of us are empowered to make better and smarter real estate decisions these days. Information is power and challenging convention equals money in your back pocket.
Have your own thoughts and ideas on real estate? Please share, would love to hear from you.
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