Are our ideas around brands and how much they cost wrong? Are Australia’s real estate groups the cheaper alternative? We look at the issues.
An ongoing perception with brands in Australia, is they cost you more. We all know we pay for that recognition, association and marketing budget that enabled them to push the new product down our throats as we tried to just watch The Bachelorette in peace, free of brands encroaching on our private time.
Sometimes we’re willing to pay extra for brands and other times we’re not. Sometimes we want the association and are willing to part with extra money to have that clout. Other times, we just really want to save money.
What about real estate branding? How does it work anyway? Are they even the more expensive alternative to going it alone?
LJ Hooker’s Grant Harrod says Australia’s real estate networks, well, the good ones anyway, represent good value for money, and could ultimately be reducing your costs. Not only that, but they could be making you more too.
“We did an exercise with CoreLogic, it would have been about 18 months ago, looking at the average performance of a network office. It wasn’t just looking at just our office, it was looking at those within a network and those that were independent,” Mr Harrod told REB.
“We took out the bottom 10 per cent of the independents because we wanted to not catch those who were probably sole traders, and on the average, performance increase was as much as 35 per cent.
“I think while clearly there has been a shift, or a trend, towards independent operators, I think some of that is climatic. The market has been quite favourable.”
When the market is less buoyant, agents, sellers and buyers tend to err on the side of caution, Mr Harrod said.
“There’s no doubt that when we look at the history of our business that we outperform in the down cycle because we are a quality brand. We are able to work more closely with people in terms of getting them through and building their business in tougher markets and certainly enabling them, to come out the other side to be much more successful.”
Agents looking for value for money also need to consider their exit strategy,
“A strong point of interest here is you can sell an LJ Hooker office. You can’t sell a ‘John Smith’ office,” Mr Harrod said.
“You’ll consistently get more value in a branded office… Most business owners don’t necessarily think about their exit strategy, but they need to.”