Friday, 27 June 2014

Some agents are useless ... sorry, but they are

Lots of things have changed in real estate over the past few years. It wouldn't take me long to write a long list but I want to tell you about one of the silliest trends we've noticed.

Years ago, if you wanted to buy a property, you called on your local real estate agent. For an increasing number of people this is no longer the way they buy property.

Today, some people employ a buyers agent.

What's a buyers agent? This is a real estate agent who acts for the buyer. In theory they locate the best property for their buyer client, negotiate a really great price and pass on the benefit to their client, the buyer, who then pays them a fee, often thousands of dollars.

I can understand how this trend has come about. After all, real estate agents are trained negotiators. Good agents are excellent negotiators. But we act for the property seller, not the buyer. And because people only buy property once in a while and are not as skilled as real estate agents with the negotiation of property sales many buyers will feel they need to be protected by someone with equal skills.

Sounds like a great theory, doesn't it?

But the buyer's agents we have come into contact with have been useless.

I know that's a bit tough, but honestly, they are terrible negotiators. At least the ones we have met. And in almost 100% of cases they pay too much. For an agent like me who acts for the property seller they are a dream come true. They avoid negotiating by making a great offer to start with which they know our client, the property seller will accept, often with a big grin and open arms.

Great for us. Not great for the buyer they represent who now has to pay thousands for the privilege of paying too much. Amazing!

If you are thinking of buying a property save your money and go direct to your local real estate agent. I could almost guarantee you'll end up much better financially.

Saturday, 26 April 2014

Real estate advertising - what you read should be what you get!

Can you believe what you read?

Apparently not when it comes to real estate agent's advertisements. It seems for many years most of us have been a little wary of the often colourful descriptions agents use when pitching their latest listing.

And who can blame them? I'm sure we've all heard of someone who has responded to an advertisement for a "great first home" only to find the structure barely held together by spiderwebs and hope.

In fact, many of the jokes about real estate agents would be devoid of meaning if there were not an accepted set of assumptions about their manipulative use of language, as the following extracts from BBC News Online, humorous “dictionaries” of estate agent euphemism demonstrates: 

In Need of TLC ... often means ... In need of demolition.

Internal Viewing Recommended ... often means ... Looks awful on the outside.

Original Features ... often means ... Water tank still contains cholera bacterium.

Studio apartment ... often means ... You can wash the dishes, watch the TV, and answer the front door without getting up from the toilet.

Secluded location ... often means ... It was in the middle-of-nowhere - barren and desolate. Suitable film set for Mad Max 5, perhaps?

I'm sure you get the picture.

But things have changed in recent years. In NSW and in most other states Agents are expected to write accurate advertisements without exaggeration - sometimes a difficult task when trying to present a client's property in the best light.

Section 51 of the NSW Property, Stock and Business Agents Act 2002 forbids a licensee in the course of carrying on their business from publishing or causing others to publish any statement that:
  • is intended or apparently intended by the licensee to promote the sale or lease of any property, and
  • is materially false, misleading or deceptive (whether to the licensee’s knowledge or not).
Fair Trading NSW has a range of penalties waiting for any agent who oversteps the mark. This is good news for consumers who can now view advertisements placed by agents in the reasonably certain knowledge that "what you read is what you get"

Whilst I was researching this article I came across the following item which pokes fun at the way property advertising has been viewed in the past and I thought you might enjoy it as much as I did - remembering, of course, agents today have a higher standard to follow.

Agent Speak 101

Saturday, 15 March 2014

Avoid this simple property buyer trap

I am often asked about the mistakes people make when purchasing a property.

There are so many it would be hard to fit them all on this page. Some mistakes occur because people simply don't buy properties often enough - some surveys suggest it happens about every 7 years. In between purchases property laws may change, the normal practices of agents, solicitors and conveyancers may change and the way we borrow money may change. Buyers who are unaware of such changes can probably be forgiven for not knowing.

However, some buyers make mistakes that simply defy common sense. Some people do such silly things it leaves us scratching our head and wondering how they manage the rest of their lives.

Here's the most common error. And, when you buy a property from Prudential Real Estate this is an error that simply should never occur. See if you agree ...

Once a buyer agrees to purchase a property they usually sign a contract and pay a deposit.  It then takes about six weeks for most transactions to reach settlement (the day the home owner moves out and the new buy moves in)

In the weeks leading up to settlement we write to the buyer and advise them to be sure they inspect the property they are purchasing immediately before settlement to ensure that everything is as it should be, that the property looks the same as the last time they saw it.

To their credit most solicitors and conveyancers we know do the same.  They tell the buyer to be sure they have one final inspection of the property before everything settles and the full purchase price is handed to the owner.

Unbelievably, some do not.

They say, "I'm too busy this week", "I can't get the time off work" or "It'll be alright, I'm sure"

Like Murphy's Law, if something can go wrong it generally will. Buyers who do not inspect their property before settlement invariably move in after settlement, after all the money has been paid, and find all sorts of things wrong - rubbish inside or outside or both, unwanted furniture remaining at the property, sometimes damage to walls, ceilings or fittings.

And then they ring us and say, "So, what will the owner do about this problem, this is not fair they have left the property in this condition"

Unfortunately, the old owner has no obligation to correct anything after settlement. that's why we advise our buyers to check the property before settlement, not after.

Don't get caught making simple mistakes when buying a property. Check with a member of our sales team if you are unsure of any aspect of the property buying process and we would be happy to help.

Tuesday, 25 February 2014

Real Estate ... faster than a speeding bullet!

I can't stand complaints.

Sometimes we receive complaints at Prudential Real Estate. Yes, we are not perfect, I know.  However, we treat complaints very seriously and work hard to resolve issues as quickly as they occur.  Fortunately, we don't get a lot of complaints, but even one or two is far too many.

So, what do people complain about?

Almost all unhappy customers are frustrated with a lack of communication. I wasn't told. I didn't know. No one called me back. I was not expecting (something).  No one told me.

There's no excuse for not keeping people informed but, I guess, it happens occasionally.

About 18 months ago we came across a technology solution that solved almost all our communications problems with prospective tenants.

As the largest single provider of residential rental accommodation in Sydney's south-west we were inundated with phone calls from people wanting to make inquiries about available properties - hundreds every day.  In fact, at that time we had two full-time staff taking calls and answering questions. Most simply wanted to book an appointment to view a property.

As the rental market heated up a few years ago and the number of incoming calls grew steadily every day some people were waiting hours for a call-back. You can imagine how people were feeling.

And then came the solution.

I had a call from a friend who had previously owned a real estate business in Brisbane. He had devised a simple technology solution that allowed prospective tenants the opportunity to book their own appointments to view rental properties online. As soon as they booked they received an acknowledgement by SMS and email.  On the day of the inspection they received another SMS to remind them.

Once we put this idea into place our phone calls dropped by 90% almost overnight. Suddenly our prospective tenants were being updated instantly on something that may have previously caused a headache - and at lightning speed. It seemed most people were happy to book their own appointment and bypass the agent until they arrived at the open house.

Within a few months our customer feedback comments reflected how happy everyone felt about this new idea. Prospective tenants could book an appointment to see one of our rental properties at any time without having to contact us. The new system provided a register of all those expected at the open house, so we knew what to expect. At the open house we were able to provide information about the property and lots more to every attendee.  If the open house was cancelled we could send an SMS to everyone with a single button press on our computer. Everyone was a winner.

At Prudential Real Estate, we are constantly on the lookout for solutions that improve our customer's experience.  Buying, selling or renting property can be very stressful and our job is to make everything go as smoothly as possible.

Monday, 10 February 2014

How to get rich...seriously!

I remember once hearing the best advice about getting wealthy a young man could ever hope to stumble across.

It was, "spend less than you earn and invest the rest"

The problem was I was not listening.  Maybe you were the same as me in your twenties, too busy chasing a good time to worry about the future (read: girls, nightclubs, cars etc)

It sounds like simple advice but it's not easy.  It takes a single-minded determination to impose simple disciplines such as this on yourself and your family.  But if you can manage it the world of wealth creation will open up for you.

Here's how to start. The little bit left over each week should go into a separate bank account that you never touch - unless you are going to invest the funds elsewhere, of course.

Over time your nest egg will grow.  And interest will accumulate.  And you can begin to imagine how you might invest your pile of saved dollars.

So, what do other successful investors do with their money.  If you bothered to read every book that has ever been written on the subject as well as the biography of every person who has ever gone from nothing to something, you will find a familiar theme. Most invested in rental properties. They started with one and went from there.

I know what you are thinking ...but what would you expect from a real estate agent?

Buying an investment property, however, is not as straight forward as your think.

Every Sunday the papers publish full-page advertisements announcing another series of seminars which will reveal "little-known property investment secrets" that will seemingly propel you to instant millionairdom, detail the scandalous traps awaiting the unwary first-time investor and, for a modest fee (often in the thousands), provide you with a workbook, 6-week correspondence course and online support to assist you with your journey to fabulous wealth and prosperity. Amazing!

I'm sure the only person making money out of these seminars are the promoters. But are their students, the ones who pay thousands to learn these crafty secrets, making anything?  Maybe some do. Most simply give up in frustration and write-off the costs to experience.

Is there an easier way. Yes!

It's a little old fashioned and perhaps not very glamorous.  There are no flashing lights, unbelievable claims or courses to pay for.

Actually, it's really very simple.

Ask your local real estate agent. Most have many years experience in their local area. They know which properties to buy and which to avoid. And they are motivated to help you like they would a member of their own family. Because they want you to be happy with your purchase and leave the rental management with them.  This is how your local real estate agent makes money - by giving the type of good advice that ensures you stay with them for the long term.

Buying an investment property can be quite easy.  All you need is an agent whose advice you can depend upon. An agent who understands the value of long-term relationships where both parties benefit.

Prudential Real Estate, after 26 years in your local area, is one of those agents.

Monday, 27 January 2014

What do real estate agents REALLY get up to?

If I told you the answer was, "nothing much" you would probably nod and whisper, "I knew it" under your breath and move on to the next blog.

But if I told you what real estate agents really get up to you your big toe may fracture from the weight of your falling jaw.

It's true most of us have this hazy idea that agents drive cars with bigger price tags than their homes; roll into the office late every day following a quick nine holes and a latte and then spend their morning doing nothing more creative than planning their lunch.

Collectively we also have this vision of property buyers turning up at open homes with bulging chequebooks and a burning hunger to buy every home they inspect leaving the hapless agent with nothing more to do than collect the deposit, fill out a few forms and collect a whopping commission.

What a great job!  So, how come more people aren't lining up to be real estate agents?

Because it's not really that easy.  But, you probably guessed that bit.

Most property salespeople work 50 to 70 hours every week.  They often start before 8.00am and many don't get home until 10.00pm on some nights - too late for tea and long after the kids go to bed.

Unlike most people in the workforce they are paid on results, not by the hour.  On some days they could spend hours showing homes to a buyer only to have them purchase another property from another agent. Ouch - payment, nil!

Or they could be invited to inspect a home hoping to list it for sale. These appointment often take place after hours when the property owner gets home from their job.  They could spend 2 hours discussing the market and a plan for selling the client's property only to be told at the end, "We'll call you". Great - payment, nil!

Property managers are in the same boat. They arrive at an open home for a rental property only to have themselves for company.  Prospective tenants who promised to turn up sometimes forget, are distracted or simply find another property.  And then forget to cancel their appointment.  Again - payment, nil!

Good agents spend hours phoning buyers hoping to find "the one buyer" who is a match for their client's property. They write reports, attend meetings, provide feedback, advice and counselling to their clients. They network with others on their team, with solicitors and conveyancers, with mortgage brokers and banks, with strata managers, tradespeople and many more.  Just to get into a position where they can negotiate a great deal for their client.

So, why do we keep doing it?  It sounds a little like banging your head against a wall, doesn't it?

We keep turning up every day because we love helping people.  We love helping them find a new home. We love helping them sell or rent a property.  We love the people we meet (well, most of them anyway) and we love to work with them as they achieve their goals.

And although we spend a lot of time getting paid nothing for much of our efforts we get enormous joy when we are able to score a win for our clients.  The look on their faces, the thank-you's we get when all our efforts pay off are simply priceless.

One day, you may need a real estate agent.  To help you buy, sell or rent a property.  When this day comes I hope you will think of Prudential, we would love to help you.

Monday, 13 January 2014

What does "good service" look like?

"Good service" probably looks a little different to each of us. But, I guess, we can probably agree on the basics.

For example, having to wait at a counter for service in a retail store for longer than 30 seconds without being spoken to probably falls into the "poor" service category. Being greeted with a smile and a "How can I help you" as you approach the same counter probably sounds like good service. Right? Good, we are in agreement.

Now let me tell you a story ...

I recently bought a car from the Audi Centre Sydney - that's the big glass building you pass on Southern Cross Drive just before you reach the turn-off for Randwick.

It was probably the single worst service experience in my life. And I'm old!

The guys I dealt with must have taken lessons from Honest Joe, the Parramatta Road car dealer struck off by Fair Trading in 1968. Or the Cord Car Company at Burwood - who remembers those crooks from the early 80's?

Read on and let me know if you have had a worse experience ...

A friend referred me to a guy called Aari at this dealership. He was in the new car department and his service was great but it didn't take too long to work out I would be better with a near-new car. So, he introduced me to the guys in the used car section - I think they have some fancy name for this department, Audi Approved: Plus. Still used cars, still used car salespeople!

A young fellow called Lee was very helpful and we agreed on a car and a price. On the day I went for my final test drive of the chosen vehicle and to pay my deposit I was told by Lee's assistant manager, a guy called Vojta, that another buyer was currently test driving the same car (Hmmm!) ... would I mind waiting?  I didn't mind and it was only about 10 minutes.

Eventually, I went for my final test drive. Satisfied with everything I offered to pay my deposit but was rebuffed by Vojta who told me the "other buyer" had also made an offer to buy the car - unfortunately $2000 more than the price that had been agreed originally with Lee.  Would I be prepared to match the other buyers offer? No, I said, but don't worry, let the other buyer have it, after all there are probably lots of the same type of car available. I made to leave. Wait, said Vojta, I will just check this with my sales manager, he blurted. I waited and within a few minutes Vojta was back. It was a miracle, they decided to sell it to me at the agreed price and forego the extra $2000 - who knew? It was amazing! Pigs do fly.

It was at this point I should have left. But, I wanted the car, so I stayed. And it got worse.

If this had been "Lost in Space" the Robot would be waving its mechanical arms at me declaring "Danger, danger Will Robinson"  But I have no Robot and into the dark unknown I went.

After greeting me with the news that Audi Sydney were prepared to take a lesser price for the car than they could have achieved Vojta asked me if it would be OK for them to write up the deal at a lower asking price - they would deduct $15,000 from the sale price and also reduce the amount of my trade-in by the same amount. It would be the same bottom line for me, the same price Vojta insisted and I couldn't think of an argument against the idea so I agreed without another thought.

It was only afterwards I discovered the reason Vojta was so keen to lower the sale price of the car was to ensure no luxury car tax would be payable.  The new price would come just under the threshold meaning his dealership would not be liable for tax.  How's this story sounding so far?

Before paying my deposit, however, Vojta introduced me to Khalil "who would look after me for the rest of the process".  It took me a moment to work out that Khalil was the Finance and Insurance guy, employed to sell me car finance, rustproofing, alarms etc.

Mostly he was after the finance.

He started off on the right foot, trying to build a relationship, before asking how I was going to finance the purchase. I have everything arranged with my bank, I explained.  But what are they charging you?  It doesn't matter, I replied, I am satisfied with what they have offered me.

Wrong answer!  This was like a red rag to a bull, like I had thrown down the gauntlet, like I was presenting him with a challenge that placed into doubt his very manhood.  It was very serious - I could tell from the look on his face and his change in posture - he started to stand and lean over the desk.  My fifteen-year-old daughter who was sitting next to me was scared.

In the end I had to tell this clod we were simply not interested.  I think I raised my voice to make my point very clear.  He backed down, resumed his seat and dismissed us with the flick of his hand.

Finally, we were shuffled on to a very polite young lady who spoke to us in bursts between posts to facebook which she managed with just one hand - amazing! She was probably bored, poor thing. She took our deposit and off we went.

A week or so later I arrived to collect the car.  Despite previous arrangements one of the tyres had not been replaced - what was I expecting?  Really!!  I drove away with a faulty tyre with the promise they would replace it whenever I returned.  Ask me if I have been back.

A couple of years ago I read a book called, The Ultimate Question.  The author, Fred Reichheld, says most customer satisfaction surveys are a waste of time.  They are too long, ask unnecessary questions and often the results are ignored by the very companies requesting the answers.

Reichheld says businesses could reduce their surveys to just one question and get much better results.  The question is, "On a zero-to-ten scale, how likely is it that you would recommend us to a friend or colleague"

If Audi Sydney had sent this question to me in a survey I would have answered ZERO.  Theoretically, someone from their customer service department (if they have one) would call me and ask me why.  And I would tell them this story.  In a perfect world they would act on what they heard from me and make changes that would ensure my story never occurs again.

But they didn't ask me this question.

Or any question, for that matter.

In fact, they have never sent any sort of customer satisfaction survey or inquired about my transaction from that day to this.

Why is this so?

It's because they are not interested in the feedback and opinions of their customers.  Which is why they have such atrocious customer service. There's something deeply wrong with the culture at this place so I would strongly recommend you do not shop there - they are not interested in you or your opinions of their service, only in making another sale.  Yuk!

(In case you're wondering, we have been using customer satisfaction surveys at Prudential Real Estate for the past 2 years based on the Ultimate Question.  Our average rating on the scale zero-to-ten for all transactions is almost 9. We try to improve this score every day based on the opinions of our clients and customers.  A pity other companies don't do the same)