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As technology tries to make a real estate agent’s job redundant, agents need to turn to auctions to deliver vendors the best result.
David Stewart believes the real estate industry is in severe danger, and that the main reason is many agents do not understand what their modus operandi is.
“If I ask an agent, ‘What is your role?’, many wouldn’t be able to answer,” the iTRAK Real Estate director told Real Estate Business.
The key to an agent’s role is to establish the most competition for a property, which would allow the vendor to accept the best price.
“Any agency doing private sales in the years to come are doing no more than the vendor can do themselves,” Mr Stewart said.
This is why he believes auctions will keep real estate agents relevant.
He believes a good agent needs to have three qualities to ensure they deliver the best result for their vendor.
They include: creating a scenario where multiple buyers are competing for a house; work with buyers, so they have trust in the process; have thick skin to deal with critical comments.
The relationship with the vendor is central because they are who the agent works for.
“It is our responsibility to identify who is interested and to make sure they fight together for the home to meet the vendor’s interest, not the buyer’s interest,” Mr Stewart said.
He believes there are too many agents with thin skin who worry about what is written about them online, and that does a disservice to getting the best price for a seller.
“There are so many agents who refuse to put buyers into [a competitive] position ‘cause they are scared of the keyboard warriors.”
By prioritising the vendor and creating that competition, Mr Stewart can put extra and unexpected money into his client’s bank account.
As a result, he believes if the auction process is not harnessed to create competition, vendors will start to reconsider using an agent to sell their home.
“In five years, vendors will do one of two things: they will say, ‘I need to sell my house, but am I going to do it myself by putting it on eBay and see what happens; or ‘Am I going to employ an agent to do an auction campaign?’,” Mr Stewart said.
Most people can take photos and list their home online, but the bulk of vendors who try to sell their own home will undersell it because of the lack of competition, he said.
“A good real estate agent will get a better result seven out of 10 times compared to those who sell their own homes.”
With the rise of vendor selling, Mr Stewart believes that in a decade, real estate agents will be in a position where they will approach people trying to sell their own homes to get business.
Part of the process to get competition is not to overprice a property and then having to lower a price later on. It is better to start at a reasonable price and build up, he said.
When it comes to real estate in the metropolitan/suburban market, Mr Stewart has a saying.
“If your home is on the market longer than 25 days, either your real estate agent is giving poor advice or you want too much money, or both.”
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