Real Estate Agencies

<html><body>After a year of COVID-19 impacts, getting back to business as usual will present challenges for some real estate agencies. According to a Melbourne Institute study, 70 per cent of workers who worked remotely during the pandemic wish to continue working from home.

The challenge for businesses is creating those beneficial moments that occur during face-to-face contact. In a hybrid work model where team members might not align on working days, those connections that are so important to collaboration and innovation will be fewer and farther between. 

Leading firms believe that holding in-person business events is key to improving the hybrid working model with moments of powerful team building.

The human brain is hardwired for physical connection and eye contact, something that cannot be replicated by using screens.

In less than a second of meeting someone, physical engagement fires up your neurons, generating the chemistry that pre-empts the beginnings of empathy and trust. A group of connected people can change how we see an issue, alter our priorities as a group, and create a capacity to collaborate around shared values.

At First National Real Estate, we’re working hard to make sure that the crucial bonds that lead to knowledge sharing are re-established as quickly as possible. I’ve always strongly believed in holding business events that bring people together and our national convention, this May in Canberra, is on track for 500 First National co-operative members and their employees. The event is already oversubscribed and we’ve had to book an overflow hotel.

After spending so long away from peers during COVID, the desire to get together to share our journeys and our experiences is critical. But the way I see it, this is not just a business session or awards event, it’s about helping our people return to normality, become a better person and run a better business.

Pre-COVID, First National would run 30-50 events a year in each state, ranging from training to functions, as well as two to three national events. Having in-person meetups in different locations is critical to the success of the business.

The greatest benefit has been the sharing of ideas. We’ve got offices from Bendigo to Cairns and that shared business experience, whether staffing, sales, legalities, or HR, is 100 times better than Googling or trying to muddle through on your own. 

The building of relationships cannot be done over Zoom or via email, only done by good old-fashioned chat and advice, so events are critical to what we do.
Events can fast-track the restoration of relationships that have diminished during the pandemic. 

According to researchers at Yale University’s School of Management, during COVID-19 our professional and personal networks have shrunk by almost 16 per cent, or the equivalent of 200 people.
That has dramatic consequences for businesses. It can lead to less creativity and more groupthink. 

People with fewer connections at work have a decreased sense of belonging and are less likely to identify with the organisation, which puts them at higher risk of turnover and possibly even fraud and negligence.

Ray Eliis is the CEO of First National Real Estate</body></html>

The building of relationships cannot be done over Zoom or via email, says Ray Ellis

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Rebuilding real estate connections after COVID-19: First National's Ray Ellis

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Real estate offices and real estate agents will diminish by 20 percent-30 percent in the next year.
With property (for-sale) listings, so low and a phenomenon never experienced before in parts of Sydney; how can real estate agencies survive? 
For a large number of Real Estate Offices (REOs), sale of property commissions, makes up to 60 percent-80 percent of their revenue. Some rely purely on sales commission, to keep their doors open for business.
After recently, reading numerous articles and LinkedIn discussions about low property numbers that are on the market for sale I began to reflect on discussions I held as far back as 12-15 months ago with industry colleagues.
At the time I made the following prediction, and that it would eventuate by end of financial year 2016. 
<ul>
<li>We will see at least 20 percent of REOs close down.</li>
<li>These will be made up of REOs that rely on pure sales to keep their doors open.</li>
</ul>
One brand I have been particularly observant of is McGrath Real Estate. This brand even listed on the ASX and mostly due to its success accredited to: reported high sales figures. How will they cope in a changing landscape where sales become scarce?
The crux of the discussions with colleagues, were in relation to the shrinking property market, due to various market forces:
1)     Property-Marketing companies on the one hand ramping up sales of property; and
2)     The financial institutions on the other, also selling real estate.
Both sectors moving into the real estate sales due to high commissions, paid out directly by developers. I can say, even in the good times, the average real estate selling agent missed out on listings. Most listing of new developed property went, has gone to and is still going to property-marketers. The local Real Estate Agents miss out.
Property that is new to the market, where commissions can be inflated, became attractive for “direct sales campaigns” to unsuspected investors. In essence, the typical local real estate office has lost 30-40% of sales due to “marketeers and the financial sector invasion.”
Now, add to the invasion of our industry, the current low numbers in secondary stock sales as evidenced in article/photo below. Also as reported across the media and journals.
I refer to historical low number of sales listings in Sydney. 
These are established properties that have almost disappeared overnight. Parramatta alone has had an attrition of up to 47 percent less property on market. These figures were calculated across June-to-August. The number of agents has not changed however.
Parramatta, has 176 registered real estate offices according to the Yellow Pages. According to Domain, there are 172. Either way, it is a concern that should not be taken lightly. Specially when we can safely say that there are 2.5 selling real estate agents in each office.
A concerning trend also witnessed across the face of Sydney metropolitan area.
Some agents are commenting on a 30 percent drop in numbers across the Lower North Shore and other areas. These numbers are generated by comments on LinkedIn, made by agents that have worked in these areas for 10-20 years.  
Only last week, I sat with a colleague from Blackktown and she informed me and was troubled by the fact that her office only had two properties for sale. She doesn’t have a small operation, and runs a well-established brand.
In the same area, other brand-name agencies have reduced their local paper advertising from 3 pages down to half a page. They just don’t have any property listings for-sale in their books. What they do have is 5 selling agents in their office.
Notably, the above becomes the recipe or the ideal conditions for an attrition of selling agents and very tangibly, offices that only rely on sales to survive.
It will be a hard fall for many, and for others that place a lot of trust in property-sales-offices. Another call, another prediction; all in a day as I share my thoughts over a coffee with friends.  
Warning to the industry
Keep an eye on other Industry-Disruptors such as Purplebricks RE. Don’t underestimate what they are doing and focus on how you can best serve the diminishing clientele base you have. That is, if you want to survive the for-sale listing famine.
If you want to stand out from the many agencies in your patch; do something different. Offer a level of service that others will find hard to match. Again, only if you want to stay in the industry past EFY 2016 and not be a casualty of the changing face of real estate.
EDWIN ALMEIDA is licensee in charge of <a href="https://www.just-think.com.au/" target="_blank">Just Think Real Estate</a>.<a href="https://www.just-thin.com.au/"> </a>
He is also the creator of <a href="https://www.youtube.com/user/JustThinkProperty" target="_blank">Oz Real Estate.TV</a> and a presenter for <a href="https://propertyinvestingvault.com/" target="_blank">propertyinvestingvault.com</a>.
 
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Real Estate offices closing down in Sydney

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Australia’s rapid property market downturn is beginning to have a severe impact on residential real estate agencies around Australia.
And it could force some out of business, says insolvency and turnaround specialist Jirsch Sutherland. 
“We are already noticing the first signs of financial distress,” says Jirsch Sutherland partner Sule Arnautovic.
“We understand that some agencies are struggling to meet their fixed overheads, with the likelihood of staff redundancies, consolidation, mergers or insolvency now firmly on the horizon. 
“With property values having dropped by as much as 15 per cent over the past 12 months, some agencies located in former powerhouse markets are considering mergers or insolvency as their incoming revenue declines rapidly. 
“We’ve heard from industry insiders saying that the drop in house prices is being exacerbated by longer marketing periods, lower-commission competitors, difficult credit access for buyers, and the fact that many younger sales agents, who found success easy during boom times, are now finding they lack the skills to cope in a far more challenging marketplace.”
Arnautovic says the future of numerous agencies around the country is likely to come into question, with declining revenues set to bite hard. 
“The housing market continues to tighten in many parts of the country and it’s already increasingly clear that many agencies will feel the pinch in terms of reduced and deferred revenue,” he says.
“With house prices tipped to drop much further in certain key markets over the coming months, we believe we may only be looking at the tip of the iceberg in terms of the challenges faced by real estate agencies.”
Rent rolls may not be the saviour 
Adding to potential difficulty is the fact that many agencies have not invested adequately in their property management divisions, preferring instead to focus most of their resources on sales.
As a result, few property management teams have been allowed to adopt new technologies that would make rental processes more efficient and easier for both landlords and tenants, thus allowing companies to better capitalise on the revenue potential of their rent rolls. 
“In previous downturns, and indeed the recession in the late 80s/early 90s, rent rolls helped keep many agencies afloat,” Arnautovic says.
“But today, as rents fall in some parts of the country, some agents will find they no longer have the income to service the loans they arranged to originally buy the rent roll. It could be a perfect storm: decreasing property management fees and lower volume of sales, which would make it difficult for some agencies to cope with their own property and asset leases, not to mention wages and entitlements. 
“With these new realities in mind, it’s vital for stressed agencies to consider action early if they find themselves in financial difficulty. The key thing to remember is that early action is vital. By deciding to adopt an appropriate strategy as soon as possible, highly adverse outcomes can most likely be avoided.”
Seeking Safe Harbour
The 2017 changes to Safe Harbour laws are one example of how worst-case scenarios can be avoided.  
“Safe Harbour laws give Directors breathing space, providing them time to consider the position of the company early in the piece, without the potential threat of insolvent trading,” says Arnautovic.
“In turn, this may improve the position for creditors, enabling them to explore the possibility of restructure or sale, which may subsequently lead to more of the company’s value being preserved.”
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Housing downturn could send real estate agents to the brink: Jirsch Sutherland

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EXPERT OBSERVER
The franchise model is being disrupted by technology that’s making it easier than ever for individual agents to run their own show more flexibly and efficiently. But could bots – backed by AI, automation and big data – come to the rescue and help the big real estate brands deliver new value to agents? 
To explore this idea, let’s look at a typical day in the life of an agent in 2020 who works at a franchise (we’ll call it Robot Real Estate) that uses bots to delivers a wide range of automation. The strategy behind the AI support is for the franchise to empower their agents to deliver highly personalised service that puts human relationships at the heart of the data, which in turn creates unprecedented loyalty both from their agents, and the buyers and sellers they service.
Meet Tanya. She’s been an agent at Robot Real Estate for the past 10 years. About three years ago, she was considering leaving Robot Real Estate – she felt the fees were too high and locked her into technology that was out of date and clunky to use. It was a lot of money to pay for a desk and a lead database that was usually out of date. 
But then Robot Real Estate introduced an end to end bot-driven infrastructure for agents. And while it took a little getting used to, Tanya now loves it. Because it takes care of all the back-end tasks that used to keep her busy, and allows her to spend her day focused on what she’s passionate about – helping people on their journeys of buying and selling property.
Here's what Tanya’s day looks like:
Wakeup: When Tanya exercises each morning (she’s a 5am Club gal!) her Robot Real Estate assistant (an automated assistant that she fondly calls REVA) reads out her schedule for the day and outlines a list of tasks that she has preset for her bot team. At her request, REVA also reads out profile information of the people she’s going to meet that day so she’s fully informed and pumped for the day. Breakfast:  Tanya has her first client meeting with Jane a buyer. By the end of the breakfast, REVA has sent the buyer a list of suitable properties and inspection times based on their conversation and some background video information on the areas that Jane said she was interested in. 
The bot has tagged the client as originating from the relationship with Tanya and assigned Jane to Tanya in their database. This means that even if another agent finds Jane a home, Tanya will receive a payment to recognise the fact that she introduced her to the agency. 
The bot has also set a calendar entry for Tanya to make a follow up call a few days later. By that time, the automation at the back end will have identified if Jane has clicked on any of the properties in the information that was sent, and recognised how long she has spent on each property and if she shared any of the properties with friends or family, or returned to one or two of them. 
This information will both inform the conversation that Tanya will have with Jane when she follows up and allows the bots to refine future property selections that are sent to her. 
Tanya also encourages Jane to become “identity-authorised”. This will allow Jane to visit any property at the time of her choosing – not just wait for opens. It can also be – if Jane gives permission – linked to her credit approval rating which will give Jane the advantage of pre-approval for loans and a much quicker turn around on her finances when she decides to make an offer on a home. 
Again, regardless of who sells Jane a home, Tanya’s introduction of Jane to the identity authorisation and credit approval process means Tanya will receive a trailing commission payment when Jane transacts.
Early Mornings: In these days of automated contact, Tanya is a big proponent of the personal touch. She uses the first hour or so of every morning to make phone calls to prospects and clients and people she’s sold to recently to see how they’re settling in. She finds people are usually happy to talk first thing or on their commute. 
After each call she dictates outcomes to her REVA who annotates the client data and schedules or carries out follow up actions such as sending property reports, investment analysis, and lookbooks or contracts. She loves the Robot Real Estate Concierge Service that allows her to order thoughtful gifts for her buyers and sellers and send them to their home or office via drone in just an hour or so.
Mid Mornings: On mornings when there is no Robot Real Estate sales meeting, Tanya likes to spend her time creating videos about her local community, helpful information for buyers or sellers, or a roundup on properties that she loves.  Of course, the Robot Real Estate bots can now automatically create both report-styled or video content about her local market, but Tanya is a bit old school. She likes the personal touch, will sometimes interview people in her community and has fun being on camera. 
When the videos are shot, she alerts her REVA to the new content, and the bot automatically schedules it to social media and targets it to an appropriate audience based on the latest insights from her social media pages. REVA will also tag anyone she interviewed. 
REVA also inserts content into her email newsletters to keep her click through rates high. In addition, Tanya uses this time to direct the Virtual Reality video of properties she’s selling because she cares about the details. 
It’s also the time in her day when she reviews the sales collateral the bots have created for her sales listings – those bots are truly amazing in how they assemble the ads, online listings and reports, but Tanya has an experienced eye and she likes to think that it’s her attention to the personal details that makes the difference. It’s also a great way for her to familiarise herself with her listings and it boosts the quality of her data within the Robot Real Estate system which in turn improves her micropayment commissions.
Lunchtime: Tanya has an Open Home. Of course, they’re not as necessary now with so many people being accredited to inspect the property at a time that suits them securely, and with the availability of VR. 
But Tanya likes the ceremony of an Open being held at least a few times during the sales period – it signals to the neighbourhood that a property is on the market which can often lead to surprise offers. You never know where a passive buyer might be. And it’s a great way to meet the neighbours, who in turn can become valuable sales leads to Tanya. 
Everyone who does enter the property is automatically identified through their mobile phone and added to the Robot Real Estate database – that’s because Tanya is so good at making people feel at ease and learning about them. Even if they’re unlikely to buy or sell for many years, Tanya’s initial discovery is at the root of their relationship with Robot Real Estate and allows their experience with Robot Real Estate and Tanya to be truly personalised.
Afternoon: Tanya has a meeting with a potential vendor, Rebecca. Rebecca has a lovely home but wants to upgrade and there’s a few small repairs that if done, would help the home get a better price. 
During her visit, Tanya shoots both video and photos of each room, paying particular attention to areas that she thinks might need some work to bring up to sales presentation stage. Her REVA captures these and attaches them to the address record, and with Rebecca’s permission, sends them to Robot Real Estate’s Presentation Concierge system, which requests quotes from the appropriate trades and services. 
By the end of the visit, Tanya is able to provide Rebecca with a detailed quote on the work that would need to be done to the property, the time it would take, and a schedule for the sale, including an accurate estimate of the price Rebecca can expect with Tanya’s clever marketing approach. 
Rebecca’s other alternative is that Robot Real Estate buy the property outright and provide her with the funds in just 48 hours. Such an approach means a sale price that is below what was quoted, but some clients like the speed and certainty of the approach, especially if they have personal circumstances that mean they have to move by a deadline.
End work: Tanya ends her day with another round of phone calls to clients, finalising negotiations and giving contracts the once-over just to ensure she’s across the details. A couple of days a week, she has evening appointments scheduled with vendors. Tanya’s REVA gives her an update on all the reports and contacts that have been sent and actioned across the day and allows her to set any new tasks. 
Sometimes she does this by reading the report, sometimes if she’s busy or in the car, she’ll ask REVA to read it out and she’ll instruct the bot verbally. 
She loves the AI assisted support that she’s offered by Robot Real Estate – it’s really changed her life by removing so much of the busy, repetitive work that used to stress her out. It allows her to focus on the human connections that are the most important part of her job at a price point and uptake level that she would never have been able to afford, or get her brain around on her own. 
Robot Real Estate supports its sales teams and its AI strategy with regular training offsites and sales rallies. These provide Tanya and the Robot Real Estate team with the opportunity to learn new skills, re-energise their sales focus, and hear about new trends and the systems the franchise is trialling. 
There are also always personalised intensive training times in the schedule, when Tanya is taught to become proficient in the new skills needed. Her training is tracked and is tied to her commission levels. 
While the additional money that comes from doing the training is nice, Tanya feels that the value really comes from segmenting the time this way as it is extremely effective. It’s made her feel more secure about trying new things and gives her time to practice and become familiar with new systems. This makes her more confident about using the coaching tools in the system which step her through whenever she is out on the road and needs a quick refresher. 
Since introducing the AI, Robot Real Estate’s profits have soared, buoyed by reduced running costs, increased agent retention and significantly improved customer loyalty and brand value awareness that has really driven their sales and revenue. 
It’s also opened up new revenue streams to the franchise, which has now significantly increased its referrals revenue from mortgage brokers, financial institutions, insurance and credit score companies. 
The new approach by Robot Real Estate has removed the stressful “busy-ness” from the life of Tanya and their other agents. This lets them get more done in less time, while at the same time providing a significantly higher level of personalised service to buyers and sellers that has won awards.
Agents have reported feeling significantly less stress and love that the REVA support and back end systems allow them to genuinely switch off and focus on family time when they are home, while feeling secure that the details are being taken care of.
Could this be the future? What do you think?
Kylie Davis is the head of marketing for property services at CoreLogic.
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