‘Virtual’ agency offices can be successful although face-to-face contact with clients remains critical in certain situations, a number of agents have said.
The agents were responding to a recent Real Estate Business article entitled, ‘Shop fronts vs virtual offices’. The article attracted a strong response from numerous industry professionals, the majority of which lauded the benefits of virtual offices whilst acknowledging a continuing need to provide face-to-face time with clients, either at the office or relevant property.
Benefits ranged from lower costs through to a more personalised service, according to some industry professionals who posted comments on www.rebonline.com.au
Jens Raun, principal of Gold Coast-based online home office agency raun.com.au, told Real Estate Business he had operated a “true” virtual/online-only real estate agency for more than seven years – named place2live - where he wouldn’t meet the seller or the buyer in person. Only recently, however, he decided to revert to a more traditional real estate approach.
This sees him now having a home office and meeting sellers and buyers, “due to the fact that I was getting more and more requests for a meeting in person”.
“People are nervous, and they want agents to hold their hands through the home buying process,” he added. He said this allowed agents to show their worth to clients.
“Jens Raun will, in this set-up, be servicing clients on the Gold Coast, meeting sellers and buyers in person at the property and doing all paperwork in the field or at the home office,” he said in relation to his raun.com.au business model.
“I have no doubts that the true virtual model has great potential in the future when the market gets back to normal and that a home office based operation will have great merits until then.”
Suggestions that property managers needed shop fronts in order to properly service landlords and tenants were partly disputed by Geraldine Brunner, principal/director of GB Realty.
Ms Brunner, who has operated her virtual office on the Gold Coast since 2004, said while she agreed that landlords and tenants needed regular personal contact with an office, this didn’t mean they wanted “to actually get into a car and travel to an office to make contact”.
“As a real estate business owner, this is my job to keep in contact with them,” she said.
“What I have found these days is most people are time poor and prefer the convenience of contact by regular email updates, text messages and a simple telephone call. It has been my experience that the tenants actually prefer the option of a direct deposit system for their rent payments, which they can do in the privacy of their own home, rather than withdrawing the money from the bank and travelling to an office to pay their rent in cash.
But Ms Brunner said tenants are required to visit her in person before the start of their lease.
“All tenants come to my home office to sign their leases and they comment on enjoying the relaxed atmosphere of dealing with a home office,” she continued. “I am always very particular about taking time to explain their responsibilities to them. Their children watch the TV, which allows the parents’ time to concentrate on the lease details.”
One comment, however, questioned the role virtual offices could play in undermining demand for agents:
“With this sort of approach, how long will it be before home owners start asking themselves, ‘Real estate is simply advertised and sold online, do I really need to pay an agent $1000's to do that for me?’,” one comment to the article said. “With that in mind and no perceived added ‘value’ from an agency because they no longer need to appear as a business or appear to need any sort of shop front - is this a precursor to home owners asking the question ‘is technology negating the need for a real estate agent?’.”
According to Kevin Hockey of Real Estate Agency Sales, it's not surprising that businesses will continue to seek new ways to reduce costs so as to become more profitable. But he feels large offices will continue to operate from premises.
"Those businesses thrive off the energy and momentum that teamwork and the business culture provides," he told Real Estate Business. He has noted though how some offices have been successful at expanding using off-site (satellite) offices.
At the very least, Mr Raun said technology will influence how real estate offices are managed and run.
“One thing is for sure the traditional franchise and shop front-based real estate agency model will have to change,” he said. “The uptake of mobile internet, social media, cloud computing, smartphones and tablet apps will be factors that will forever change the way real estate agents do business in the future.”
Mr Raun still plans to relaunch his place2live business as a true online real estate agency when national licensing for agents takes effect, which is due to occur in July 2013.
“Business partners will not only be agents operating from a home based office - offering traditional real estate agency services at a reduced cost - but also local (non real estate agency) retail shops, so marketing channels will be via local shops, internet (SEO & SEM) and most importantly via social media.”
Ms Brunner said her decision to head the virtual office route was made more than 10 years ago.
“I could see the writing on the wall for the end of shop fronts back in 2000 when I noted the majority of marketing being internet driven and large companies employing satellite workers to reduce running costs,” she said.
“However, there is a trade off,” she added. “Running your business from a home office means you need to be very structured with your time. An office front allows you to lock the door and head home to your family for the night.
“It can be more of a challenge to close the door to your virtual office and enjoy quality time with the family.”