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Losers in real estate will cloud perception

Losers in real estate will cloud perception

by Michael Davoren 0 comments
Michael Davoren

Roy Morgan Research has been polling Australians about the trustworthiness of different professions since 1975. In the first year that real estate agents were included, the profession had just an 11 per cent rating of ‘very high’ or ‘high’ for ethics and honesty. Real estate agents have always polled poorly.

In the 2015 poll, nurses, doctors and pharmacists were #1, #2 and #3. School teachers were fourth. At the tail end – 28th, 29th and 30th – were real estate agents, advertising people and car salesmen.

In this year’s poll, real estate agents had a 9 per cent rating, after having peaked with 12 per cent in 2012. The only professions to have fared worse than real estate agents on some occasions were newspaper journalists, especially pre-2000; union leaders, especially through the late 1990s; and to a lesser extent, insurance brokers.

This year CoreLogic RP Data conducted its Consumer Perceptions of Real Estate survey, wanting to test the stereotype by going directly to people with experience of agents and their performance. Almost 300 recent sellers responded, rating their experiences and ranking the behaviours and skills that they thought their agents had excelled or done poorly in.

On one hand, the results threw up a pleasant surprise.

The survey identified that the untrustworthy, smooth-talking, self-interested agent stereotype was not as bad as we may have thought.

The majority of vendors reported positive experiences with their agents, with 31 per cent rating the experience as ‘excellent’, 35 per cent rating it as ‘good’ and 68 per cent saying they would recommend their agent to friends or family.

There is a side to the real estate industry that often goes unrecognised.

That is the millions of dollars raised for charity, across Australia and across the world. Since 1992, the RE/MAX brand alone has invested in the wellbeing of local communities to the tune of well over $150 million, and most real estate groups have their charities of choice.

If real estate people are committed to community engagement and helping others; if 66 per cent in CoreLogic RP Data’s survey rated their overall experience when selling their home as either ‘excellent’ or ‘good’; and if, for example, the majority of the 980 customers interviewed by LJ Hooker in its own survey this year responded that 'real estate agents do add value’, then why are real estate agents so unpopular or at least generally perceived to be?

Could it be because there are always losers in real estate transactions, and the agents are usually held responsible?

A percentage of real estate consumers will feel they have lost – including the buyer who missed out on a property, the person who thinks they paid too much or sold for less than they want, and the landlord sitting with an empty investment property.

Property managers feel the ire as much as sales agents. Who do the tenants turned down for a rental or asked to vacate a property generally blame?

A gap between the buyer and seller is always likely, with the seller wanting more and the buyer wanting to spend less. The skill of the real estate agent is in closing that gap and bringing these parties together.

Today, a significant percentage of investment properties are being sold by marketers, a group typified by people with big campaigns, generally selling projects, and offering low deposits and attractive repayment plans. In the end, the prices they ask are way over what the local real estate agents may determine those prices should be. The simple way investors can avoid the price trap is to ring a local real estate agent and check a similar property/price range before buying.

We find that the marketers are often talking 20 to 30 per cent over the mark, and this is tarnishing the reputation of the real estate agent. Third-party marketers are not ‘real’ real estate agents.

And while everyone generally points the finger at the agent, it is predominantly the market itself that drives the outcome. Consumers can easily have a false perception of the market through misinformation and wrongly believing that every headline relates to their own micro-market, for example.

In a red-hot market such as Sydney has experienced, you have satisfied sellers and frustrated buyers. In many cases, auctions attracted huge numbers of registered bidders. For every 10 registered bidders, for example, nine will have missed out.

In markets that have been damaged by the mining and minerals downturn, you have sellers with properties worth far less than what they paid for them. It is the real estate agent that usually has the job of breaking that news.

In the CoreLogic RP Data survey, 34 per cent said their real estate agent’s service had either underwhelmed or angered them.

Not all agents have the ability to make everyone feel good but the really good agents stand the best chance. That’s because the best agents can make even the ‘losers’ feel good. This is not a trick but a matter of being honest and delivering a better service, which generally occurs because the agent accesses regular quality professional development.

So what are the 30-odd per cent of agents doing wrong? Whatever it is they must address it and lift their game. They must be 100 per cent committed to their professional development, seek out the best and be engaged.

Like every industry, real estate has its bad eggs – but this is a very small percentage because the industry is extremely regulated at all levels and the bad eggs get caught out. So they should; and depending on the severity of their wrongdoing, possibly removed!

The CoreLogic RP Data survey identified that agents needed to demonstrate honesty from the get-go to build customer trust, which comes through regular communication, and dependable and accountable behavior.

It is easy for anyone to deliver good news. Often the real estate agent needs to deliver the ‘bad’ but deliver it they must, because only then is there honesty and trust.

The good news is that I personally see and hear ample stories where consumers applaud agents for good service and good results; and strangely, a lot who say they don’t trust real estate agents will also say that they are very happy with their own agent. Perhaps it is the perceived but unknown ‘untrustworthy, smooth-talking, self-interested agent’ who they wouldn’t recommend!

Overall, we are an industry of skilled professionals who give to our communities, deliver to our clients and customers, and receive good support from our peers and the industry itself. We should be unequivocally associated with trust. I’d like to see any future survey reflect that.

Losers in real estate will cloud perception
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Michael Davoren has been in real estate for around four decades and held senior management positions and directorships with major real estate groups in Australia and New Zealand. Michael has also held leadership positions in the industry, having been president of both the Real Estate Institute of Queensland and the Real Estate Institute of Australia. He was an executive board member of the Chicago-based International Consortium of Real Estate Associations for five years.

Michael is an Australian Property Finance (APF) director, a New Zealand Property Finance (NZPF) director and a director of SQUIIZ.com.au.

He co-owns RE/MAX Australia and RE/MAX New Zealand.

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