Do Harcourts really charge more?
The reality is that real estate companies are all different and will charge differently for our services, which is great from the perspective of the vendor, as it gives you huge choice. Price should of course be a consideration when you list, but there are lots of other things that are important too.
After all, if for example a sales consultant who is pitching for your business, is prepared to immediately discount just to ensure they get the listing, should you ask yourself, what else will they be prepared to cut back on when the time comes to try and get a sale on paper? Will it be your price? Or might it perhaps be the amount of time and effort they put in to sell your property.
But let’s take a step back. The good thing about New Zealand is house sellers have options. You can choose to sell your property yourself, choose a low fee company, choose someone who discounts quickly suggesting they don’t believe they are worth their ‘rack rate’, or choose a full fee, full service company or consultant.
Before deciding, there are a few things about real estate that are worth knowing, and you should bear them in mind when making a decision.
- No matter how good a consultant is, they will be talking to dozens of people each week and they cannot remember all of them. Equally they can’t stay in touch with them all, which is why you will often hear buyers say – ‘I’ve talked to a real estate agent and I have never heard back from them”. Unfortunately, it is human nature, most consultants focus on the immediate needs of a “cash buyer” if they have met one.
- Consequently buyers rarely stay loyal to one real estate agent, they move around open homes, and will generally phone whoever has listed the property they like. Conversely, when they are looked after they can be extremely loyal.
- Not all real estate consultants are created equal. As with any profession some are just better at it than others, with a greater capacity for work and ability to achieve results
- The fees from a sale - the commission- is usually split between the office, listing consultant and sale consultant and ultimately the tax department, so any commission must pass through a few hands.
- All real estate sales consultants know some buyers (pt1) but they typically only know a few buyers in any given price range, looking in any given suburb for any given type of property. No single consultant or company knows all the potential buyers in the market, -at a given point in time.
- You need buyers to make a real estate sale happen – physically taking buyers from property to property is a huge cost time wise and expense wise, and the agents working with buyers need to be compensated from the sale.
With those 6 points in mind, what are your options?
You could of course sell your own home and take on the paperwork and legal advice all on your own terms, but this is not a common thing in our market as so often people feel that trusting a network of property experts and legal professionals is the best way to gain them the results that they need.
This brings us to the answer to the original question about why some real estate companies charge more than others. It comes down to the time, effort and opportunity a good sales consultant working within a large full-service company can bring to the whole sale process. A good consultant will be working hard with a whole network of potential buyers available from within their company rather than just the one or two they know themselves.
Do you choose a genuine low-fee real estate company? It may well be the best choice. Ask some hard questions about their buyer network and how they operate. Ask yourself, ‘will other consultants within their company spend the time and energy introducing buyers to your property when there is a much smaller sale fee to split? It is possible that as a low fee operator they may only be selling their listings to the one or two potential buyers they might know, not to the larger market.
That brings us to full fee operators like Harcourts who some see as more expensive.
Harcourts has around 460 consultants working in the Christchurch market currently. Full details of any listing in the Harcourts system is available to all those consultants immediately. More than that the details are also available to approx. 2500 consultants nationwide. Our system is designed to enable cross selling between offices and individuals and as a result approx. 40% of sales we do, are done by a 2nd consultant. To put it plainly your property listing is available to any buyer working with a Harcourts consultant anywhere across the city and potentially across the country.
Quite simply at Harcourts we believe we get our vendors more money for their property by a combination of the sheer volume of consultants who all have buyers (pt. 1), who can then access your property information. This creates competition for your property which can produce excellent results for you, either by auction, multiple offer situations or just simply because of the superior and trained negotiation skills in our people.
Yes, you may pay more for a Harcourts consultant than you do for some other consultants, but you only get one chance to sell your most valuable asset, so you need to be sure you got the best price not just any price.
While the costs of selling your property will -and should – always be a factor in deciding which real estate company to choose, selling should not be about the commission factor alone. As with any product or service, value is not the same as cost. It should, at least in part, be about the company itself, and its reputation, It should be about the skills and experience of the sales consultant, as well as the buyer network they have at their fingertips but ultimately about getting the best price for your home.
Finally, If you are still unsure trust in all the people who have voted Harcourts the most trusted real estate brand for the 6th year in a row.
There is an old saying in Christchurch – “when you’re selling, sell with Harcourts. When you’re buying, hope your new home is listed with another company”.
Jim Davis - Christchurch/South Island Regional Manager