Posted on Aug 02, 2021
Recently we went through the exercise of selling a residential home. It was a GJ Gardner home in a desirable South Auckland suburb. Nothing particularly special about it – certainly not a Herne Bay mansion.
Although we are versed in the process of buying and selling industrial real estate, we don’t transact residential on a regular basis. So we made a plan!
Firstly we analysed who the most active agents in this particular suburb were. Not difficult as there were two who had almost all the listings. Then we had a meeting with each of them. We explained that we wanted to sell the house, and although we knew a little about real estate, that knowledge was not specific to residential, so we would be guided by their expertise. Both meetings were on a Tuesday, and we explained that we would make a decision as to which agent we would choose over the coming weekend. Which meant that they would need to submit their proposal prior to the weekend. We also explained that we have a very limited attention span – so their proposals should be one page only. In our experience most proposals (and Information Memoranda for that matter) that run beyond one page are just padded out with pictures. A little like the real estate agent’s sign we saw outside a house recently. It had a picture of the house prominently on the sign.
One of the agents submitted their succinct proposal prior to the weekend. Then the weekend came. And went. And still no proposal from the other agent. Finally on the Tuesday he called to ask for a meeting to present his proposal. I was able to inform him that as per our previous discussion, we were to make the decision as to which agent would handle the sale on the (just gone) weekend. Which we had. And the decision was to go with the agent who submitted a proposal in the requested time frame. Interestingly the agent who failed to get back to us promptly was from the company who boasts they sell 40% of the houses in Auckland. But not this one – see our article “It’s not the BIG that eat the SMALL… it’s the FAST that eat the SLOW”.
The successful agent proposed a 3 week campaign, with 3 weekends of open homes and an auction at the end of the campaign. As most agents would be aware, we are not the greatest fan of the auction process. However, we were guided by the expertise of the agent.
During the campaign, each week we were sent a report. That report was full of data.We found these reports intriguing – in part because we almost never receive that level of reporting from industrial agents. But also because we have been trying to follow the buzz internationally around the development of “PropTech” (or Property Technology) and trying to understand as to whether much of the technology , and data, is actually of benefit. We are real fans of the use of technology to improve both our lives and our business processes. But at the same time we tend to be cynical around the use of technology merely for the sake of technology.
Some of the data included in those reports included the numbers of parties who attended open homes, the number who requested private viewings, and even price feedback from “genuine” buyers. Each report also included comments from interested parties which ranged from positive to inane. Several viewers who were downsizing from lifestyle blocks felt a subdivision section would be too small. Really?
But also included in the data was the insight that information about the property went to 4987 potential buyers through targeted database email marketing, of which 2938 opened the email, and 223 clicked through to the online listing. We also learned of the numbers who engaged in web activity regarding the property through various websites. There were 508 on hougarden.com and 332 on homes.co.nz amongst others. Trademe of course had by far the most activity, with 6062. We also learned that 15% of viewers were on desktops, and 85% on mobile apps.
But what did we learn from all this data? If you take the view that the value of data is in the result, then we needed to look at the result. Ultimately there were 2 bidders at the auction. One walked out when the auctioneer would not accept his lowball bid. Which left one. And that one bidder was successful in owning the property.
But what we still don’t know from all that data is which source the two bidders came from, what prompted the parties who did attend the open homes to do so, and whether any of the 6062 Trademe viewers were actually interested in buying a house – or were looking at TradeMe only as an option because of the rubbish on TV at the time.
We have been following one of the Proptech areas which seems to have gathered most momentum, and that is property management software. The programs we have studied have in general been better than the spreadsheet alternative, albeit substantially more expensive. But ultimately whether in this area a spreadsheet is better or worse than property management software comes down to the people using it. And the quality of the information that goes in to any program will dictate the usefulness of the resulting analysis.
The data we can gather from property management, and sales campaigns, is all very fascinating. But ultimately it is the analysis of that data that is either useful or useless.
As we learned very early in our career, there are lies, there are damned lies, and then there are statistics.