If there was ever an industry in need of an overhaul it is real estate. There aren’t too many happy customers out there. And everyone’s pissed off with the commission system. In the US a sustained attack is underway to wrestle control off the Realtors’ associations and give back to customers the 4–6% fees collected by the often lazy, greedy operators we call agents.
How gratifying then to see a new approach by former Lowe Advertising boss Chris Knox and some friends with The Joneses. Their approach is pretty novel: no commission; a flat fee; and salaried staff who specialise in sales and marketing. Very fancy graphics too.
The new agency is a member of the REINZ, so it’s still part of the club but clearly not a welcome member. A Harcourts spokesman could barely conceal his rage at the Joneses’ approach.
So it goes with innovators. I wish them well and have asked to see one of their agents since my lovely house will be for sale soon.
Having said that, I’m not sure that they’ll succeed. First, their website is pretty awful and thin on content. It’s full of marketing flimflam about radically making over the industry and so on. So it’s hard to tell exactly what the service is—I apologise if I’m jumping the gun here, guys (the Joneses are all guys). But so far, so thin.
Second, the design of the site looks really great, if you were selling something funky like a new mobile phone. Some of the directors came from Vodafone or Vodafone’s ad agency which might explain it. But the site will alienate 89% of Kiwis, who have propelled the ugly and pragmatic TradeMe and Warehouse brands to their roaring heights. I’m not sure I want to trust my most important possession to arty farty agency types. I want marketing grunt, not style.
Third, The Joneses aren't that radical. A service like this is already opertaing on both sides of the Tasman called Go Gecko. They have 15 office around New Zealand. And it’s never been illegal to sell your own house (I think) in a private sale. There are plenty of outlets that do this.
I thought that maybe Trademe and Open2View might have changed things. They both have done a great job in democratising the information flow, but curiously they have actually strengthened the role of the agent. The agent remains the logistical gateway between buyer and seller.
A really radical approach would be if The Joneses could shift the power away from the seller to the buyer. Imagine if you could employ someone to manage the expensive and awful process of buying a property like a one-stop shop: searching, shortlisting, negotiating, conveyancing and legal property search and all that complication. It should be as simple as buying a car.
Securing better information (from TradeMe and Open2View) goes some way to helping buyers. But it’s not enough to make the process easy. You need a logistics manager who can cut through the legal, building and local body issues on the buyers’ behalf.
I wish The Joneses all the best in their noble pursuit of saving the country some billions in wasteful real estate commissions. I’m not sure they’ve got the formula just right.