New real estate agency The Property Market is taking on the giants and looking to break the old mould.
What’s the first thing that comes to mind when you think about real estate agents? Perfumed matrons with bad dye jobs and big cars? Slick sales sharks with expensive suits and ingratiating grins?
It’s no secret that real estate agents are up there with journalists and lawyers in the ‘least trusted profession’ category, and often for good reason. Anyone who’s been involved in the buying or selling of property can testify to the pressure that some agents can put on punters. But really, can you blame them? Being on commission ain’t easy – no sale, no money. The industry’s in need of a shake up, and it may be about to get it. A new real estate agency, The Property Market, has developed a business model that breaks the mould.
Located in a Victorian-era brick bake house in Herne Bay, The Property Market is well positioned to reach a new generation of home owners. The brand identity is young, fresh and innovative – an enfant terrible that revels in its precocity.
Owner Antonia Baker has no illusions – she has a David and Goliath fight on her hands. The industry’s always been stubborn and resistant to change, but this challenger brand may well be the way of the future.
Expat Brit Baker arrived in New Zealand 13 years ago with just a bikini and a duffel coat to her name. She’d been travelling around the world, and decided New Zealand was the kind of place she’d like to call home. Baker had a marketing background,
but decided to take on the fickle world of advertising. And she loved it, working as a senior suit for some of Auckland’s top advertising agencies. But after a decade in the industry, she needed a new challenge.
“I wanted to make my mark on the business community,” Baker says. “Real estate is a mega-cool product and it seemed to me that there was an opportunity to provide a different offering that was explicitly geared to consumers’ needs.”
Baker wasn’t a total newcomer to the industry before she set up shop. After training in real estate, she cut her teeth in the industry at Barfoot & Thompson’s Ponsonby branch. She then wrote a business plan for The Property Market, and utilised a researcher to road-test the concept with people who had just sold their homes.
“The insights from this research were bloody handy,” she says. “They told me that you need to demonstrate skill in getting the maximum sale price right from the get go or no-one will hire you and that your commission fee can’t be too cheap because it makes you discount and poor quality.”
She launched The Property Market in 2010. Funded by the sale of her house in Ponsonby, it was a real leap of faith for someone used to a steady income – but it’s this kind of chutzpah that so often underpins success stories.
The main difference between The Property Market and mainstream real estate agencies is that the staff is salaried. Regular real estate agencies use commission-based contractors, who daily do battle to make a crust. There can be big bucks for sales people who know what they’re doing, but the inverse is a majority languishing in low-paid misery. For Baker, the salaried model makes far more sense.
“A salary keeps the wolf from the door – I pay enough to pay the rent and cover the basics and then the salesperson has to earn the rest by selling properties.
“For clients, selling your home is a big legal process and by having the salesperson who is on a salary, we can make sure they’re taking their time to provide the right advice and managing the process properly rather than just doing anything to make a sale,” she explains.
“It’s a better experience for clients and it’s also less risky for my business – which again minimises the overheads and means we can keep costs down.”
Baker also eschewed having a high-street branch, with all the costs it brings. In the digital age, having a virtual space makes more sense – there’s no lease, no desks, admin staff and so on – all costs that have to be recovered by high commission fees.
Baker reckons that model is clunky and unnecessary. Her new marketing model is based on a firm grasp of the power of the internet and social media. There’s the website, a Facebook page, a blog, a Twitter account – all of which are regularly updated and have plenty of subscribers.
And of course, low fees follow. The standard fee is 4 percent up to $400,000, with 2 percent thereafter. Baker charges a flat 2 percent.
So do the math: if you’re selling a $600,000 house, the fee will be $13,800 as opposed to $23,000. Of course it’s a selling point, but Baker doesn’t want to be seen as just another low-fee agency like all the rest.
“For other low cost models, the pricing structure was their whole proposition and they relied on big volumes of listings to offset their low fee. The issue here is that if the market slows or reduces in size, you’re stuck with the same high overheads but a lesser income. This is exactly what contributed to the demise of The Joneses.”