First impressions are everything. How sellers create an impact and entice potential buyers in the way they initially go to market is a critical component in the process of moving real estate assets.
In today’s fast paced and time poor environment, the traditional approach of open houses and display villages or suites may not be as effective as it once was. Online marketing of real estate has been in full swing over the last decade and is now considered a “must have” of any go to market strategy. The internet is now the primary source of information sought by Australian consumers seeking to buy, sell or rent property; the success of websites such as realestate.com.au and domain.com.au are a testament to that. How can vendors, real estate agents and developers use technology to provide buyers with flexibility to make purchasing decisions? Are market disruptors such as buyMyplace.com.au changing the way the real estate game is played?
Cutting out the ‘Middle Man’
A rising challenge to real estate agents is the concept of disintermediation: the practice of cutting out the ‘middleman’. The rise of low-cost Do-It-Yourself online services such as buyMyplace.com, Purplebricks and violater.com allow buyers to bid online and have proven sellers are willing to try their hand at selling their most valuable assets directly. With models based on leveraging technology and low overheads, these online services challenge the established commission based fee design by providing an alternative to how sellers traditionally engage with their agent and passing on savings in the process.
buyMyplace.com.au is a Melbourne based company offering such opportunities. The buyMyplace business model is a disruptor to the traditional agent by offering fixed-price packages to suit all seller budgets including do-it-yourself options.
“buyMyplace enables Australian property owners to sell their property themselves and save as much as twenty to thirty thousand dollars in traditional agent commissions and fees, depending on location. We provide the help and support vendors need to get the best price for their property. The savings are compelling and hard to ignore for any vendor, so buyMyplace is experiencing rapid growth, where some traditional agents have suffered a decline in listings.”
– Paul Heath, buyMyplace CEO.
While going direct to market can certainly be appealing to save costs, but inexperienced vendors need to exercise caution. Listing your property at the correct price and managing communications or negotiations with prospective buyers directly can be daunting tasks; so sellers should ensure they are well informed and prepared to seek support when required.
Virtual reality versus reality
The real estate industry is a top priority for the virtual reality market, with such capabilities having the potential to disrupt the way real estate is sold. With free-roam virtual reality as well as standard sit-in-chair video now on offer, walk through virtual tours of properties have become available and are fast becoming the norm.
Virtual reality tours are a fresh advertising channel. Apart from increasing interest and expanding overall market reach, it also means that if a potential buyer does decide to physically visit a location, they are more likely to have a genuine interest in the property; ultimately saving the client, real estate agent, current owner or developer time and money.
The ability to view and explore a property without actually visiting it saves time and costs, however virtual reality tours have their limitations. While it can allude to it, a virtual reality tour won’t convey the environment around the property or the sights, smells and feeling of the property that don’t make it onto the screen. There’s no doubt it’s a great tool to generate genuine interest, but most buyers, especially owner occupiers, will still want to physically inspect a property before they fully commit to their purchase.
Whether it’s a buyer or a seller, one key question that is often asked is “how much is this property worth?” In recent times, there has been a surge in banks, lenders and real estate agents offering free apps which provide indicative values on specific properties.
The apps favour buyers as they can provide an indicator of pricing when assessing their options. However they also provide sellers with an idea of value and therefore assist with the decision to go to market and price setting. Most of the apps are an instantaneous tool that is available at any time of day with minimal to no costs in most cases.
While valuation apps can improve transparency for buyers, even reduce the risk of the practice of underquoting, they also have their limitations. The valuation range is only as good as the data available to the app developer and there are always questions raised around how relevant the comparable sales might be in assessing values.
What can Vendors gain from the use of tech?
They say knowledge is power but in these times more accurately, data is power. While the use of ‘go to market’ technology appears to make life easier for the buyers, it also provides suppliers with the ability to capture trends and information on consumer preferences that can be used when making investment decisions. The data that can be gained from online vehicles such as realestate.com can provide key information on buyer preferences and highlight those areas obtaining the highest engagement. Developers can use this information to understand the common characteristics and surrounding infrastructure driving that engagement and work this into the planning for future projects.
What to consider
“When it comes to selling or buying real estate, as it is more than likely the biggest investment in someone’s life, it is important to get the right advice, right marketing and the right price at all times.”
– Geoff White, REIV CEO.
As with any industry, it is important for existing players in the real estate industry to understand the key trends and disruptions to the industry. This will enable them to consider how disruptors can impact their business, adapt their business model and leverage technology to their advantage. Businesses should consider how technology can work for them; it is not a one size fits all model and can depend on the demographics of their key markets.
As much as technology can simplify and streamline the go to market process, for the majority there is still no substitute for the human elements when it comes to emotive decisions about where we buy. The majority of buyers will still seek the reassurance that comes from professional advice and physical inspections – at least not until virtual reality can replicate the sounds, smells and “feel” of a property, which we’re sure is just around the corner!