Some years ago, it was set up that real estate agents in Australia should be perceived as property marketers. This was probably the worst thing we could have done; instead we should be positioning ourselves as advisors and negotiators, says Belle Property CEO Peter Hanscomb.
Yes, as agents, we do market property; but it is one of the easiest things that we do; and it is one of the things that is saleable through technology. Yet we seem to have primarily positioned our fee around this part of our job.
We should not be seen as property marketers, but as advisors and negotiators. That is the cornerstone of what we do. We give people advice on how and when they should market their property and how their property should be presented for sale.
The best agent is the best agent because of how they handle the negotiation between the prospective buyers and the seller.
It is this part of our business that has been underrated and undersold, and I believe that is how we need to be seen as an industry in the long term. We should be one central body, cultivate highly professional agents and demand full licences for every salesperson, not just a certificate of registration. If we do all of this successfully then the vendors are going to get the best price.
Our very competitive marketplace has downgraded what we are worth because we use fees as the big differentiator, instead of the quality of the result. We are becoming a society that demands unrealistic consumer service, and unless we step up and show what we are worth, and why we are worth it, then we will only go backwards.
The way we speak about our agents and their role has a lasting impact on the public’s perception of our business. We only need to look to Canada to see how using the right terminology not only changes how the public perceives the real estate industry, but the value they place on our services.
Canada operates around the Multiple Listing System (MLS), with the selling and buying agent achieving a commission rate of between six to seven per cent on each transaction. Canadian real estate companies maintain a high level of professional perception because they have lobbied strongly to be recognised, they are better trained and they have different accreditations.
Some years ago, RE/MAX, the leading Canadian group at the time, introduced a tagline, ‘Canada’s #1 Negotiators’. It was followed up with a series of people being interviewed about their experiences with RE/MAX agents in Canada. This positioning statement saw the group grow from about 27 per cent to 43 per cent market share across the country, with a commission rate of over six per cent on an average deal.
Unlike Australia, one centralised body represents the industry in Canada. The group lobbied extensively about the position they have with the Government and with the community, and worked hard on recognising people who have gone for higher courses instead of going through designations. This has contributed to the agents being less vulnerable to digital disruption, as people wouldn’t take the risk of a second-rate negotiator through a digital platform handling the sale of their property.
One of the other big differences in Canada is that there is no outlay or risk for the person who is putting the home on the market. In Australia, we are forced to ask the seller to fund advertising and all other marketing upfront; therefore the more that is paid upfront, the lower the fee on the other end. In Canada, where the risk is on the agent, they can keep, maintain and protect a much higher fee base.
If we position our industry in Australia around a central body and develop an accreditation and education system that is governed by the industry, we will be able to raise standards and promote agents with the best experience, education and results. Fees will be restructured to reflect this.
Being perceived as a more professional body, as advisors and negotiators, we will be able to keep the digital disruption away from us as well. It won’t be about which portal we are on or what social marketing campaign we’re running; it will be about the strength of our professional advisors and negotiators. That is what will determine how we protect our fee and how we move forward as an industry.