Listings websites let potential buyers search for properties with just a mouse click, so are the days of the physical office numbered? Real Estate Business’ Stacey Moseley Investigates
Shane Evans operates a real estate business, but not as some of us know it. His company, Finesse Property, located on the Gold Coast, is a virtual office, and that suits Mr Evans just fine.
“I don’t believe a shop front is a necessity for my business,” Mr Evans said. “The proof is in the pudding:
this year alone I have sold 14 properties in 14 weeks.”
“According to statistics, there is a 96 per cent chance a buyer will look at an online source before they buy a home. People aren’t walking into offices anymore.”
Mat Steinwede, principal of McGrath Central Coast and Mat Steinwede Pty Ltd, agrees. In a recent blog, he told his subscribers that the internet has taken the place of the window display.
“Gone are the days when a buyer will walk around from real estate office to real estate office and register their name,” he blogged on matsteinwede.com.
“Buyers don’t even want to go into an office at all. They want to look on the internet, or flick through the paper themselves or go to an open home. Technology has made it very easy for buyers to sit in their home and search through all properties available, from all agents.”
Connecting with clients
Mr Evans operates Finesse Property with an executive assistant who runs the back end of his business from a serviced office, but all selling is done online or in person, in coffee shops or at the property for sale.
“I find ways to connect with clients in other ways,” he said. “I find that when you meet a buyer at the home they are purchasing, it really cements the deal. About 80 to 90 per cent of the paperwork, like signing the contract, is done in the home they are purchasing and I have never had any of our contracts fall over. There is zero buyers’ remorse because they are there when they sign on the dotted line.”
According to Mr Evans, low overhead costs allow him to offer clients a better deal.
“I have low overheads, so that means the costs I save from being a virtual office can go back to my customers,” he said.
But Mr Evans also admits he has lost business due to his decision to work remotely.
“I’ve lost listings indirectly because I don’t have a shop front, but it was something that I was prepared for when starting out,” he said. “We are a small company of two people and we are selective about the properties we list.”
Virtual offices, however, don’t work for everybody, or in every area. When Lawrie Livingstone, director of Atlas Realty Melton in Victoria, started out five years ago, he wanted to offer customers a different experience. With online listing sites he knew he could save money by not having a physical shop front.
But after 12 months of “giving it a go” working from home, he concluded the virtual office was not working for him.
“Starting off as an independent is always hard, so the option of working as a virtual office and offering a cheaper service due to having low overheads was very appealing,” he said. “However, we lost a lot of business because we didn’t have a [physical] office.”
The internet’s impact
According to Mr Livingstone, the consumer has a specific idea of what a real estate agency should be, and that includes having access to a physical retail presence.
“There has been a quantum leap in the way agents interact with vendors,” he said. “The internet has empowered buyers with information, giving them access to Google maps and virtual tours, but the internet can only take you so far. A physical presence is just so important. You can’t work from out the back of your car, it just does not appear legitimate to a consumer. Other industries may be able to operate without a shop front but in the real estate industry consumers want to know they are dealing with someone reliable and experienced. A shop front says we are here for the long run.”
With this in mind, Mr Livingstone decided to bite the bullet and purchase a shop front. He now works out of an office “big enough to swing two cats around” and believes he is now securing listings that may have gone begging when he just worked virtually.
While having a shop front is one thing, how you use it is also very important, according to Sam Bonkowski, managing director of digital display company iVisual. Real estate businesses have to be clever with their window displays or risk
“If you are going to have an office front you need to ensure you are utilising the space to engage a consumer,” Mr Bonkowski said.
“The internet has meant anyone can access your listings, but buyers are still talking to local agents. A buyer wouldn’t use an agent 50km away, so it is important to have an office that reflects a message about your brand.”
Virtual property management
It is one thing to meet a client at a coffee shop to sign off on a sale, but when it comes to property management, is a virtual office really viable? Not according to Ewan Morton, managing director of Sydney-based Morton & Morton, who believes that without a physical presence, running a successful property management division will be difficult.
“When you have an office in the local area, tenants come in to sign leases and do admin – even pay rent,” he said. “It is an efficient and transparent way for clients to contact you and know you are there. If you don’t have a physical office, that makes a big difference.”
Mr Livingstone has found the same thing and was only able to operate a property management section after setting up a shop front.
“As soon as we established ourselves in a physical office, we could offer that extra service and over a period it just grew and grew,” he said. “As a virtual office we would be unable to offer that service.”
Mr Evans also admits that if he wanted to expand his company into property management he would need a physical presence.
“That is just another reason why I don’t think it is feasible for me to take on a shop front,” he said. “I am passionate about selling; it is what I love to do. I have no desire to get into property management, so as my business is structured – without a property management section – I don’t need a shop front.”
According to Mr Evans, costs was one of several reasons why he chose to open his business as a virtual office.
“I had to weigh up my own experiences and the cost of renting an office was one reason,” he said. “After six years with a franchise I couldn’t remember the last sale I had from a window display, but it was very easy for me to recall the last sale from the internet.”
Mr Morton, however, believes the rent for his company’s four Sydney offices is justifiable:
“Obviously a lot of consumers are on the internet doing their research and getting answers but that doesn’t bring them into our office,” he said. “We do feel clients like to know you are physically there and that you are perceived as the local agent.”
Mr Morton said the company had considered merging all four offices to save on costs but recognised the significance of having a local presence.
“It is so important for an agent to have a local presence and knowledge of that market, so that is why we have kept all four offices and we won’t be moving to a virtual presence in the near future.”