CoreLogic NZ Vendor Perceptions of Real Estate Agents 2018 by CoreLogic Asia Pacific

Vendor Perceptions of Real Estate Agents New Zealand

Contents Executive summary �� 4 Reasons for selling, sales methods and final results ��10 How vendors selected their agent �� 12 Vendor knowledge and market awareness ��14 How well agents know the market �� 15 The skill levels of agents �� 16 Vendor satisfaction levels with the price achieved �� 18 How vendor feelings about agents changed across the sale period ��20 The importance of vendor recommendations about agents �� 22 How vendors rated their overall experience �� 24 Preparation and the impact of data on the quality of vendor experience �� 25 Male and female agents: is there a difference? �� 26 What did agents do that delivered impressive service? �� 28 What agents did right �� 29 What vendors say agents should do better ��30 Other ways to improve �� 31 What vendors will do differently the next time they sell a home �� 32 Next time I sell �� 33 6 behaviours that improve service ��34 8 behaviours that offend vendors �� 35 Conclusion ��36

CoreLogic Vendor Perceptions of Real Estate Agents New Zealand 2018 | 3 © Copyright 2018. CoreLogic and its licensors are the sole and exclusive owners of all rights, title and interest (including intellectual property rights) the CoreLogic Data contained in this publication. All rights reserved.

Executive Summary The 2018 Vendor Perceptions of Real Estate Agents New Zealand survey gathered both quantitative and qualitative data about the quality of customer service offered by real estate agents from more than 900 survey participants who had all bought and sold properties recently. The data reveals that while the majority of vendors had a positive experience (64%) with their agent, there is room for improvement. The survey finds that overwhelmingly, agents are excellent practitioners of the practicalities of their craft. They receive high scores on how they present properties, their marketing materials and their sales patter. But where improvement needs to occur is in empathy, relationship building, communication, delivering on promises and just plain listening. Only 35% of the industry truly excel in this area. The survey reveals that sale time is when vendors feel hugely vulnerable – the future of what is generally their biggest asset hangs in the balance, major life decisions are in the process of being made, plus there’s the stress and work involved with getting a property ready for sale. The data shows in these instances, too many agents focus on the skills required to win the listing in the short term, rather than winning the relationship – and all the referrals that the relationship will bring them over the long term.

64%

of vendors rated the overall experience of selling their home as positive.

The survey reveals that agents regularly throw away more business than they need to. Dissatisfied vendors number two in every five, leading to low referrals to friends and family and even lower repeat business. Yet it is on these latter elements that agents are overwhelmingly judged – and it is this gap that damages both individual reputations, businesses, and the industry as a whole. Seen in the context of potential technological disruption, over the last 12 months to 31 June 2018, across New Zealand there were 91,176 sales at a gross value of $58.3 billion. The survey reported 18% of vendors experienced poor or disastrous service. Put into market context, this represents 16,412 sales or $10.5 billion annually and (based on 2%) commission just short of $210m. This is a market sizing that any disruptor would be glad to win. To avoid commoditisation, the industry needs to move permanently away from being product-led in its outcomes (getting a property sold which can be easily delivered as a technology) and towards the delivery of sales service excellence (providing a trustworthy and valuable advisory relationship that makes selling a property for the best price stress free). What is also clear from the data is just how simple it is for any under-performing agents to lift their game. CoreLogic Vendor Perceptions of Real Estate Agents New Zealand 2018 | 4 © Copyright 2018. CoreLogic and its licensors are the sole and exclusive owners of all rights, title and interest (including intellectual property rights) the CoreLogic Data contained in this publication. All rights reserved.

Key Statistics 70% of vendors sold for their expected price (or above it). 42% sold in less than 30 days, with a further 27% selling in under 45 days.

41% of agents had more than 10 years experience.

35% of vendors accessed a property report.

38% of vendors interviewed just a single agent.

17% of vendors said commission was not important in their decision making.

61% of vendors said they would recommend their agent to family or friends.

56% of vendors chose their agent after seeing them successfully sell a local property.

35% of vendors said their experience selling their home was excellent, while 29% said it was good.

66% of vendors felt they were well prepared before the sales process, but only 44% felt their agent gave them great guidance. 37% said they expected to stay in touch with their agent or use them again. CoreLogic Vendor Perceptions of Real Estate Agents New Zealand 2018 | 5 ÂŠ Copyright 2018. CoreLogic and its licensors are the sole and exclusive owners of all rights, title and interest (including intellectual property rights) the CoreLogic Data contained in this publication. All rights reserved.Â

8 lessons for service excellence

The key finding of the perceptions survey was that the majority (64%) of vendors reported experiencing good or excellent service from their agents, while 36% said the service levels had underwhelmed or even angered them. When we examined the types of behaviour that made vendors delighted, key themes that all agents could benefit from were identified, including:

01 Be Professional

The number one behaviour highlighted by vendors as essential was professional behaviour demonstrated by being proactive, pre-empting their needs and delivering as promised.

02 Regular Feedback

Vendors stressed highly the value of agents who were proactive about communication, who delivered a transparent sales process and who used databased insights to support their processes.

03 Listening And Empathy

Vendors appreciated agents being easy to talk to and with whom they felt safe to ask questions at any time, and who understood the stress of what they were going through.

04 Know Your Market

Vendors felt confident they were in good hands when agents demonstrated their market expertise, showed them the data that they had used to determine price estimates, took the time to explain market behaviour and showed they had good connections and relationships locally.

05 Provide Advice And Support

Vendors highly valued advice on presenting their homes in the best possible light, especially when it was supported by recommending and helping coordinate tradesmen or through personal touches from the agent.

06 Be On Their Side

Vendors felt championed by agents who negotiated hard on their behalf and managed the headaches created by difficult buyers.

07 Be Thoughtful

Vendors were impressed by agents who demonstrated thoughtfulness and recognised their stress and anxiety around the sale and took steps to alleviate that.

08 Consistent Service

Many vendors flagged they felt dumped by their agents as soon as the listing was signed, while those whose agents delivered consistent service were more likely to use the agent again and recommend them to friends.

CoreLogic Vendor Perceptions of Real Estate Agents New Zealand 2018 | 6 ÂŠ Copyright 2018. CoreLogic and its licensors are the sole and exclusive owners of all rights, title and interest (including intellectual property rights) the CoreLogic Data contained in this publication. All rights reserved.Â

CoreLogic Vendor Perceptions of Real Estate Agents New Zealand 2018 | 7 ÂŠ Copyright 2018. CoreLogic and its licensors are the sole and exclusive owners of all rights, title and interest (including intellectual property rights) the CoreLogic Data contained in this publication. All rights reserved.Â

Who took part in the survey? “We sold to help invest in our company, but we also had to relocate for family reasons.” – Survey Respondent

The 2018 Vendor Perceptions of Real Estate Agents Report New Zealand is based on the responses of 912 vendors who sold properties across the country. Each region was represented, with a high volume of responses received from vendors in Auckland and Wellington. Respondents were sourced from promotions via the QV.co.nz website, emails and social media, with 716 fully completed surveys received. The majority of respondents (53%) had sold within the past two years, with 33% selling their home within the past 12 months and 20% having sold in the past six months, ensuring their experiences with agents were fresh in their minds.

How long ago did you sell your home?

Within the last 6 months

6 - 12 months ago

1 - 2 years ago

More than 2 years ago

20.4%

12.8%

20.4%

46.4%

The final report was written highlighting the stories within the data. To make the report easier to consume, the data focuses on the results that deliver insight for the industry. All percentages in this research have been rounded to the nearest whole number.

CoreLogic Vendor Perceptions of Real Estate Agents New Zealand 2018 | 8 © Copyright 2018. CoreLogic and its licensors are the sole and exclusive owners of all rights, title and interest (including intellectual property rights) the CoreLogic Data contained in this publication. All rights reserved.

In which region did you sell your home?

Northland

33%

Auckland

Bay of Plenty

Waikato

0.6%

Gisborne

Taranaki

Nelson

Hawke’s Bay

Manawatu-Wanganui

Tasman

17%

Wellington

0.1%

West Coast

Marlborough

10%

Canterbury

Otago

Southland

CoreLogic Vendor Perceptions of Real Estate Agents New Zealand 2018 | 9 © Copyright 2018. CoreLogic and its licensors are the sole and exclusive owners of all rights, title and interest (including intellectual property rights) the CoreLogic Data contained in this publication. All rights reserved.

Reasons for selling, sales methods and final results “We wanted to get out of Auckland. We couldn’t stand the traffic any longer.” – Survey Respondent

The most common reason stated by respondents for selling was to ‘upgrade’ (23%), with ‘family reasons’ cited by 20% of respondents, while 13% were investing and 12% were downsizing.

Which of the following influences helped you decide which agent to choose?

What was the main reason for selling your home? Upgrading Making the most of strong prices in my area

22.8% 5.8%

Moving for work

10.5%

Downsizing

11.9%

Family reasons

20.1%

Investment decision

12.4%

Other

16.6%

Making the most of strong prices was cited by just 6% of respondents while an additional 10% were moving for work. In all, 17% cited ‘other’ reasons for selling. An analysis of the responses showed mainly lifestyle reasons including retirement, divorce, getting away from neighbours or Auckland traffic, moving overseas or moving away from earthquake prone areas. The majority of respondents (65%) chose to sell by private treaty/normal sale while auction was the preferred method for 23% of respondents. A further 12% of vendors sold by tender.

Recommendations

43.1%

Seeing the agent successfully sell a local property

55.7%

Newspaper advertising

4.9%

Seeing the agent’s website/ listing on a real estate portal

19.5%

Local signboards

7.0%

Seeing the agent on social media

3.0%

Speed of sale was notable with 42% of those surveyed selling in less than 30 days and 27% selling within 30 and 45 days, followed by 17% taking between 45 and 90 days. Only 15% of respondents took more than 90 days to sell their property.

What was the final result of your sale?

22.2%

48.1%

Sold above Sold for your expected around your price expected price

24.8%

4.9%

Sold below your expected price

Did not sell

Sales results were good or excellent for 70% of those surveyed with 22% stating they had sold above the expected price, while 48% sold for around their expected price. A total of 25% said they sold below their expected price, while 5% did not successfully sell. CoreLogic Vendor Perceptions of Real Estate Agents New Zealand 2018 | 10 © Copyright 2018. CoreLogic and its licensors are the sole and exclusive owners of all rights, title and interest (including intellectual property rights) the CoreLogic Data contained in this publication. All rights reserved.

How long did it take to sell your home?

1 YR

1-3 YRS

>3 YRS

Less than 30 days

30 - 45 days

45 - 90 days

Between 90 days & a year

1 - 3 years

More than 3 years

42.3%

26.7%

16.7%

9.5%

3.5%

1.2%

CoreLogic Vendor Perceptions of Real Estate Agents New Zealand 2018 | 11 © Copyright 2018. CoreLogic and its licensors are the sole and exclusive owners of all rights, title and interest (including intellectual property rights) the CoreLogic Data contained in this publication. All rights reserved.

How vendors selected their agent “We first tried to engage our agent a year ago and she told us to wait for the market to rise. I reckon her guidance created an extra $100k in profit for us. She’s got a massive track record of doing the same for other families in our area. She’s epic!” – Survey Respondent The sale of a property, as one of the most valuable assets in most families, is arguably one of the most important transactions many of us will ever undertake. This can make the sale process highly stressful even before you think about the effort and time it takes to prepare a property for sale and the myriad of decisions required.

The insight is important because when vendors were asked what they would do differently the next time they sell, a significant number stated they would interview more agents. Even more concerning was the high number of respondents who said they would sell the property themselves next time.

The approach taken when selecting an agent therefore offers insights into how vendors are now assessing agent behaviour, and provides comparison points for agents to measure their conduct. While most agents assume it is their ability to convert listing appointments to listing engagements as the measure of their success, the data shows that vendors have already conducted a significant amount of research before they invite an agent into their home.

When asked to choose which influences had helped them decide upon their agent, 56% were influenced by seeing an agent successfully sell a local property and 43% relied on recommendations by friends.

Put simply, agents who only measure the conversion levels of their listing appointments to engagements are measuring too little, too late in the process. The data shows that vendors are relying much more heavily on personal recommendations, seeing agents in action at open homes and researching the digital presence of their agent. This is shown by the fact that a substantial – and somewhat surprising – 38% of respondents to the survey said they interviewed just one agent before making their decision on who to use. A further 31% chose to interview two agents, while 23% interviewed 3, and just 7% chose to interview more than three agents.

How many agents did you interview/meet with before you chose who to use?

38.2%

31.4%

23.4%

7.0%

Just one agent

Two agents

Three agents

More than three agents

These two elements were significantly more influential than traditional marketing such as seeing the agent on a property website (20%). Traditional marketing such as newspaper advertising was influential to just 5% of respondents, compared to 7% for signboards. Only 3% of vendors said they were influenced by an agent’s social media.* Respondents had an approach to commission that will hearten many agents, with the majority of those surveyed saying it was not the most important part of the transaction. 17% of vendors said that commission was not important – rather they wanted the agent to prove she or he was committed to getting the best price possible. A further 40% said that while commission was a factor, the emphasis was on the agent proving their value. Of those surveyed, only 13% said it was the most important element as they wanted the cheapest commission possible, while 30% said they wanted a competitive commission. The majority of agents selected by vendors were highly experienced, with 41% of respondents stating that their agent had more than 10 years’ experience and 29% stating their agent had between five and 10 years’ experience. Only 14% of those surveyed chose an agent with less than 5 years’ experience, while 16% stated that they did not know the experience levels of their agent – an interesting statistic in itself.

*Responses add up to more than 100% due to allowance for multiple answers. CoreLogic Vendor Perceptions of Real Estate Agents New Zealand 2018 | 12 © Copyright 2018. CoreLogic and its licensors are the sole and exclusive owners of all rights, title and interest (including intellectual property rights) the CoreLogic Data contained in this publication. All rights reserved.

How important was the level of commission that the agent charged to your final decision to go with your agent?

40.1%

A factor. But the emphasis was on the agent proving their value.

How much experience did your agent have?

Don’t know

Less than 5 years

Up to 10 years

More than 10 years

15.7%

13.7%

29.2%

41.4%

CoreLogic Vendor Perceptions of Real Estate Agents New Zealand 2018 | 13 © Copyright 2018. CoreLogic and its licensors are the sole and exclusive owners of all rights, title and interest (including intellectual property rights) the CoreLogic Data contained in this publication. All rights reserved.

Vendor knowledge and market awareness “I did loads of research myself before I even considered selling and then I partnered with the right agent.” – Survey Respondent

Vendors surveyed identified the importance of doing their own homework on the market as part of selling their home, with the overwhelming majority of vendors conducting their own research to some degree. Nevertheless nearly one in five were completely reliant on their agent for insights into their local market. When asked what type of research they had conducted, 76% said they had looked at similar properties online to see the competition, 68% read up on local market conditions and 37% attended open homes of properties similar to their own.*

Vendors were most likely to be reliant upon agents for time on market information with 69% stating that they were somewhat or completely reliant upon their agent for the insight. When asked what they would do differently the next time they sold a property, a significant number of respondents nominated “more research” as a key activity they would undertake or spend more time on. Many vendors nominated their own research as the best way to feel confident that their agent was performing properly and telling them the truth or as a way to hold them to account.

The survey also flagged the rising importance of property reports with 22% purchasing a property report and 13% receiving one from their bank or mortgage broker.

“I’m not going to trust advice from real estate agents next time, especially with regards to price expectations,” wrote one. “I’ll be very careful choosing an agent too – they’ll have to work to gain our trust. I’ll do an interview process – the works.”

The survey showed that 11% of vendors surveyed said they were completely self-reliant when it came to research and trusted their own data above what they were told by their agent.

What types of research did you personally do before you put your home on the market, or while it was on the market? 80% 70% 60% 50% 40% 30% 20% 10% 0% Bought a property report

Researched similar properties online to see the competition

Spoke to friends and family

Attended open homes of homes similar to yours

Read up on local market conditions

Received a free property report from a bank/ mortgage adviser

*Responses add up to more than 100% due to allowance for multiple answers. CoreLogic Vendor Perceptions of Real Estate Agents New Zealand 2018 | 14 © Copyright 2018. CoreLogic and its licensors are the sole and exclusive owners of all rights, title and interest (including intellectual property rights) the CoreLogic Data contained in this publication. All rights reserved.

How well agents know the market “We’ll be asking a lot more questions the next time we sell, and expect data to back up the answers.” – Survey Respondent

The survey identified a high level of market knowledge and skill in presenting key data to vendors while at the same time highlighting the slowness with which real estate agents appear to be embracing technological change.

Less than half (48%) of agents delivered information about the suburb generally such as median prices, growth rates etc and only 33% of agents delivered information on the current time on market to vendors as part of their presentation. While 23% of vendors surveyed said they had chosen to sell by auction, only 12% said they had been shown local auction clearance rates.

Information the agent presented to show their market knowledge Recent sales in your area (general)

82.2%

An estimated value of your property

79.3%

Recent sales by their agency

48.3%

Recent sales of homes similar to yours

64.4%

Suburb information - median prices, growth etc

47.7%

Local auction clearance rates

12.4%

Average time on market (time it takes for a home to sell on average)

32.9%

How did you rate the presentation from the agent you finally chose?

38.8%

37.6%

18.9%

4.8%

Excellent

Good

Average

Poor

77% of vendors rated the standard of presentation given by the agent about their property as good or excellent and only 5% stating it was poor. The gift of the sales gab is still a prevalent agent skill however with 64% saying their agent demonstrated their knowledge about their local market mainly by talking about it and 51% delivering a high quality printed presentation.

When asked what information the agent had provided to show their market knowledge when seeking to win the vendor’s business, 82% said they had been shown information about recent sales and 79% were given an estimated value of the property in the presentation. Nevertheless this does call out the surprising finding that one in five vendors were not provided with information about their property value during the presentation.

The survey showed real estate agents are slow to embrace even now common technology to demonstrate and share their market knowledge only 10% use a computer or iPad as part of their presentation. A tiny 3% used video while just 14% of those surveyed received market information in an email. But when they did, it truly impressed vendors.

Even fewer agents (48%) demonstrated to potential vendors recent sales their agency had made (rather than the market in general) and 64% demonstrated their ability to sell homes similar to that owned by the vendors. CoreLogic Vendor Perceptions of Real Estate Agents New Zealand 2018 | 15 © Copyright 2018. CoreLogic and its licensors are the sole and exclusive owners of all rights, title and interest (including intellectual property rights) the CoreLogic Data contained in this publication. All rights reserved.

The skill levels of agents “Our agent really knew the market and made good suggestions to obtain the best possible price. They identified and suggested presentation improvements that we would never have thought of. And they had so many people able to help with the work without it costing a lot of money.” – Survey Respondent While New Zealand’s real estate agents may exude confidence, their skill levels do not always walk their talk, according to survey results. 18% of vendors had poor to disastrous experiences, and a further 18% stated they were average.

Agents were consistently rated very highly by vendors at their ability to handle open homes (47% rated as excellent and a further 30% rated as good), followed closely by 46% who said their agent’s ability to follow up potential buyers was ‘excellent’.

The survey showed that those surveyed said the confidence levels of their agent was excellent (52%) or good (29%), and agent skills were weakest at negotiation with just 40% stating they were excellent and 28% stating they were good. Negotiation was also the skill most rated as poor by respondents with 12% stating their agent completely failed in this regard and 20% stating the skill level at negotiation was average.

Across the board in sales skills, the research found that between 23% and 32% of vendors have average to poor experiences in how their agents communicate with them and keep them in the loop about their sale.

Customer service and response times were rated as excellent by 45% of respondents, with a further 29% stating they were good but - just over one in four – said customer service was average (17%) or poor (9%). Agents were rated as having excellent knowledge about the market by 49% of respondents, while 31% said it was good.

The survey found 29% of those surveyed said their agent was poor or average at keeping them up to date with what to expect, while 26% were poor or average at providing regular feedback about the sales process. The data around ability to handle the sales process demonstrates most clearly the disparity between agents. While 47% of vendors stated their agent’s skills in this regard were excellent, it also had one of the highest poor scores at 11% and a further 19% stated that their agent’s ability was average.

How well did your agent handle the following elements of the sales process? Excellent

Good

Average

Poor

Marketing

43.9%

33.2%

17.2%

5.7%

Open Homes

47.0%

29.6%

16.1%

7.2%

Providing regular feedback to me about the progress

44.4%

29.6%

17.2%

8.9%

Follow up of potential buyers and leads

46.3%

28.2%

16.9%

8.7%

Negotiation skills

41.3%

27.1%

20.0%

11.8%

Keeping me up to date with what to expect

41.6%

29.4%

19.5%

9.7%

Handling the sales process

46.6%

24.0%

18.8%

10.6%

CoreLogic Vendor Perceptions of Real Estate Agents New Zealand 2018 | 16 © Copyright 2018. CoreLogic and its licensors are the sole and exclusive owners of all rights, title and interest (including intellectual property rights) the CoreLogic Data contained in this publication. All rights reserved.

How did you rate the skills of the agent you finally chose to sell your property? Excellent

Good

Average

Poor

Agent confidence

52.2%

29.4%

13.2%

5.2%

Agent knowledge about the market

49.4%

31.1%

16.3%

3.2%

Marketing materials and presentation

37.2%

36.2%

20.6%

6.0%

Follow up

41.1%

29.0%

18.1%

11.8%

Negotiation skills

40.0%

27.9%

20.3%

11.9%

Agent experience

46.1%

31.2%

17.99%

4.6%

Track record of sales

42.7%

34.8%

19.6%

2.5%

Customer service/response time

44.7%

28.7%

17.0%

9.6%

Comments in this space were plentiful with 490 out of more than 900 respondents providing feedback. “Agents need to listen, listen, listen to what the seller needs from them,” wrote one respondent. “They need to communicate well and keep the seller informed. Once a week is too long and seems like forever when you are waiting for some feedback.” “Better written proposals, better written reporting throughout the campaign is needed,” wrote another. “The reports don’t have to be long but show me that the agent is working on buyers and presenting and protecting the value of my home.”

“They need to take the time to get to know the client and be consistent about giving feedback to the client about how everything is going. This is our home we’re selling!” wrote a third. These insights reveal that agents have mastered the product-delivery elements of selling a property – the photos, the marketing, the ad bookings and the open homes. But there is a skill gap when it comes to building relationships and making human connections. Yet it is the relationship delivery upon which vendors rate as the most important.

“They need to take the time to get to know the client and be consistent about giving feedback to the client about how everything is going. This is our home we’re selling!” – Survey Respondent CoreLogic Vendor Perceptions of Real Estate Agents New Zealand 2018 | 17 © Copyright 2018. CoreLogic and its licensors are the sole and exclusive owners of all rights, title and interest (including intellectual property rights) the CoreLogic Data contained in this publication. All rights reserved.

Vendor satisfaction levels with the price achieved “The level of communication before and after the sale was fantastic. They negotiated the best price on the day, despite the fact they had only one bidder.” – Survey Respondent The survey identified that while price does play an important role in vendor satisfaction, it is not the only thing that agents are judged on. Vendors can be impressed with service levels when the price is as expected or even below the desired amount. Equally, vendors can be dissatisfied with the service level when they achieve the result hoped for. Let’s examine this in detail. The survey shows that 70% of vendors were satisfied with the results of their sale in relation to the price achieved. 22% sold their property above the expected price, while 48% sold for around the expected price. Only 5% of those surveyed failed to sell, with 25% stating they sold below their price expectations. If price had been the most important element of the sale, these numbers would correlate more closely with those that asked how respondents rated their overall experience when selling their home. But what we see in the data overall is that a higher number of respondents said their experience selling was ‘excellent’, in comparison to those who sold above the expected price. This indicates that an agent can achieve the expected price but demonstrate behaviours that make them stand out as delivering excellent service. Equally, an agent can achieve the expected or higher price, but demonstrate behaviours that will result in the vendor being unhappy with the level of service. This is most evident when we overlay the insights about overall experience with the price achieved.

The data reveals that 72% of vendors who achieved a higher than expected price said their overall experience selling was ‘excellent’ with a further 20% stating it was ‘good’. For those who achieved the expected price, 35% said their overall experience was ‘excellent’ and 38% stated it was ‘good’. What we can conclude from this is that when a higher than expected price is achieved, vendors are much more likely to rate the experience as positive, although this is not guaranteed. Equally, we see the opposite is true when vendors fail to sell, they are much more likely to regard the experience as poor or disastrous. So if achieving a good price is an important part of good service, what are the behaviours that make vendors feel the best price possible was achieved? Not surprisingly, it’s all about the information that was shared with the vendor. The research showed that vendors who received additional market data from their agent, were more likely to have sold above their expected price than general respondents. While the survey showed that 22% of respondents generally achieved a higher than expected price at sale time, 37% of respondents who had received local auction clearance rates from their agent sold for more than expected. Likewise, 30% of those who had received information about the time it took for a home in their area to sell had higher than expected sale prices, compared to the 22% generally.

What was the final result of your sale?

22.2%

48.1%

24.9%

4.9%

Sold above your expected price

Sold for around your expected price

Sold below your expected price

Did not sell

CoreLogic Vendor Perceptions of Real Estate Agents New Zealand 2018 | 18 © Copyright 2018. CoreLogic and its licensors are the sole and exclusive owners of all rights, title and interest (including intellectual property rights) the CoreLogic Data contained in this publication. All rights reserved.

Overall Experience Selling Your Home

Excellent

Good

Average

Poor

Disastrous

35%

29%

18%

13%

Compared to:

Sold above expected price

Sold for expected price

Sold below expected price

Failed to sell

22%

48%

25%

CoreLogic Vendor Perceptions of Real Estate Agents New Zealand 2018 | 19 ÂŠ Copyright 2018. CoreLogic and its licensors are the sole and exclusive owners of all rights, title and interest (including intellectual property rights) the CoreLogic Data contained in this publication. All rights reserved.Â

How vendor feelings about agents changed across the sale period “The price estimated by our agent for the sale was overly high. My feeling was I was promised a high price just so he could win the listing. But once listed, all the disappointment started.” – Survey Respondent One of the most important findings of the survey was the significant decline in confidence that consumers of real estate agent services experience as they go through the sale process.

How did you feel about your agent during the sales process?

The issue of “managing down” vendor price expectations was flagged across comment sections in the survey, identifying the need for agents to have “hard” price conversations earlier with vendors.

How did you feel about your agent before the sales process began? (i.e.: just after you had signed up and begun working with them)

Confident they would do a good job and get a good price

57.2%

Hopeful they would sell the property and get a price close to what you wanted

39.0%

Dubious that they would succeed in selling the property and meeting your expectations

3.8%

(Once you had signed up and started open homes, marketing) Confident the agent was doing a good job and would get a good price

50.5%

Anxious they would sell the property and get a price close to what you wanted

32.8%

Dubious that they were going to succeed in selling the property and meet your expectations

16.8%

During the sales process, this level of confidence slipped to 51% with the number of vendors becoming dubious jumping to 17% of respondents. Once the property was sold, only 42% reported being delighted with the performance of the agent, 37% feeling okay about the experience, and 21% unhappy with the final result. In this way, the survey identifies that a significant number of vendors experience agents who “over-promise and underdeliver”.

The survey identified that vendors had high hopes and confidence in the skill levels of their agents at the time of selecting the agent, however this declined significantly during the campaign, and was most marked when compared to post-campaign.

Of all the things agents do poorly, managing down attracts some of the most angry and upset comments from sellers. The research identifies that it is one of the biggest things agents do to breach trust with their clients.

Before the sale process began, 57% were confident the agent would do a good job and they would get a good price; 39% were hopeful and 4% dubious that the agent would succeed in selling the property and meet their expectations. Interestingly, these numbers are identical to the Australian experience.

CoreLogic Vendor Perceptions of Real Estate Agents New Zealand 2018 | 20 © Copyright 2018. CoreLogic and its licensors are the sole and exclusive owners of all rights, title and interest (including intellectual property rights) the CoreLogic Data contained in this publication. All rights reserved.

How did you feel about your agent after the sales process? (Once the property was sold) Delighted that the agent did a good job and got the price you wanted

42.4%

Okay. They sold the property and got a price that was pretty close to what you wanted

36.5%

Upset. The agent did not meet your sale or price expectations

21.1%

“The price estimated by the agent for the sale was overly high. My feeling was that I was promised a high price just to get the listing, but once listed, the disappointment started,” wrote one vendor. “Agents need to tell you the expected price up front and support the vendor rather than continually giving negative feedback to lower your expectations,” wrote another. “Agents should offer a consistent service across the entire sales period, rather than offering a great one to get your business and then not bothering to continue the same way once you’ve listed.”

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The importance of vendor recommendations about agents “Our agent was wonderful to deal with, kept us informed, took away the stress and achieved a great result. I’ve told all my friends to use her.” – Survey Respondent “Your brand is what your clients say about you when you are not in the room,” says real estate coach, Tom Panos.

However, underpinning the fact that price is not everything, we still see that 37% of those who sold for less than they expected said they would recommend their agent, and even 16% of those who failed to sell at all said they would still recommend their agent because of behaviours the agent exhibited during the process that they found valuable and worthy of endorsement.

If that’s the case, there is a significant proportion of real estate agents in New Zealand who need to know that what their clients say about them when they are out of earshot is damaging their business. In fact, the research shows that for every five sales the average real estate agent makes in New Zealand, agents destroy their relationship in two of them, with vendors walking away from the service committed to never doing business with them – or their kind – again.

On the negative side, 39% of vendors surveyed said they would not recommend their agent at all. Selling below the expected price or failing to sell plays a big role in this with 87% of those who failed to sell saying they would not recommend their agent, while 63% of those who sold below the expected price said they would not recommend their agent.

First, let’s look at the positives. The survey found 61% of vendors overall would recommend their agent to friends or family.

But again we see that price is not everything. Even though they got more than they wanted in terms of price, 13% of vendors said they would not recommend their agent, while 33% of those who sold at the price expected said they would not endorse their agent.

The price achieved does play a role in this. The data found that when the property sold above the expected price, 87% of vendors said they would recommend, compared to 67% of those who sold for around their expected price stating they would recommend.

Comments articulating these sentiments included: “Our agent was so completely dedicated to doing a professional job. There were no short cuts, no excuses. I developed enormous respect for her and still keep in touch.”

“Our agent always offered excellent service. While we did not get the price that we all felt was reasonable, it was not through her lack of negotiating skills. She did everything she could with a very difficult purchaser.”

“Our agent always gave us honest feedback – even when it wasn’t what we wanted to hear!”

“Our agents were professional, empathetic and understanding – always important if you are recommending.”

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Negative comments were equally consistent in their themes. Read the following comments and ask if you would be happy if you knew your customers spoke about your business in the following ways:

“Agents need to make it less about the money and more about the people – many agents just come across as greedy.”

“He was all for a quick sale and bringing us down in price.”

“Because of him, I will never trust another agent.”

The importance of delivering good quality service to the long term value of a real estate agency was further underpinned by the responses to questions about staying in touch with their agent. The survey found that 37% of vendors said they would like to use their agent again and stay in touch with him or her. This compares with 44% who said they did not expect to stay in touch with their agent, and 19% who said maybe. Going deeper into this question, we asked those who answered ‘no’ or ‘maybe’ to explain their reasoning. It found that 54% of those who said they did not expect to use their agent again said it was because they did not expect to buy or sell in the same area – so hardly the fault of the agent. However 36% said they did not wish to stay in touch or use the agent again due to the poor level of service, while 26% said their agent had made no effort whatsoever to stay in touch with them. This last figure identifies that a quarter of the industry has a lackadaisical approach to repeat business.

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How vendors rated their overall experience “Our agent had a very high standard and I was confident that he was committed to doing the best for me as a client.” – Survey Respondent

As we saw in the previous chapter, 35% of vendors had an excellent experience selling their home and 29% said it was good. This compares to the 31% who said it was average to disastrous. And we know that those vendors who achieved a higher than expected price were more likely to have an excellent experience. But is it just about the money for vendors? We see indications in the data that while achieving the expected or higher than expected price plays a significant role in vendor satisfaction, the real

answer to this question is ‘no’. Price is just one factor that plays a role in how agents are perceived by vendors. The heartening thing about this insight is that it reveals that there are skills and practices that agents can demonstrate regardless of market conditions to ensure vendor satisfaction. It reveals that in markets where prices are coming off the boil, agents should still be able to practice professionally and in a way that leaves their vendors feeling they have been well looked after.

The survey identifies the skills and practices that top performing agents use to support achieving a better-than-expected price AND a better-than-expected vendor experience. These include:

High quality marketing materials

A quick sale

They were given more data by their agents

The survey revealed that vendors who experienced excellent service were more likely to have received high quality printed marketing materials (68%).

Vendors who experienced excellent service were most likely to have had a quick sale (regardless of whether they chose auction or private treaty).

They were also more likely to have received support and information over email (19%) and were more likely to have received a video presentation, although this number was still small at just 4%.

The survey revealed that 63% of those vendors who rated their experience as excellent sold in less than 30 days while a further 26% sold in less than 45 days.

The survey revealed that those vendors who experienced excellent service were consistently shown significantly more information about their local market than those who experienced average or worse service, and even more than those who experienced good service. Vendors who experienced excellent service were more likely to have seen data including time on market, suburb information including median prices, recent sales like their own homes and property valuations.

The survey showed that experience counts with Kiwi real estate agents, with vendors whose agents had more than 10 years’ experience most likely to have received excellent service. CoreLogic Vendor Perceptions of Real Estate Agents New Zealand 2018 | 24 © Copyright 2018. CoreLogic and its licensors are the sole and exclusive owners of all rights, title and interest (including intellectual property rights) the CoreLogic Data contained in this publication. All rights reserved.

Preparation and the impact of data on the quality of vendor experience “There should be more agents like the one we had. He took the time to give a sales price estimate and present information in professional quality documents, had in-depth local knowledge about the suburb and specialised in sales in that area.” – Survey Respondent

The survey showed that 66% - two thirds – of vendors felt very well prepared before they went through the sales process, while 30% felt prepared but would have liked to have known more. Just 4% felt not at all prepared.

time on market were significantly more likely to be rated as having delivered an excellent service by their vendor. The data also showed that local auction clearance rates and average time on market are key data points that are shared by agents who deliver excellent service across the eight real estate skill sets of confidence, market knowledge, marketing materials and presentation, follow up, negotiation skills, agent experience, track record and customer service levels.

How well prepared did you feel before you went through the sales process?

66.0%

30.3%

Very well prepared Prepared but would have liked to have known more

3.7% Not at all prepared

If you answered no or maybe to the question above, why?

36.2%

53.8%

The agent’s I won’t be buying service was poor or selling in the and I don’t want to same area deal with him/her again

25.9% My agent never asked to stay in touch or made any attempt to follow me up

One of the most important things agents can do to deliver high satisfaction levels for clients is to share more information about the property market with them in their listing presentation, the survey showed. The survey showed that agents who were more open and transparent and provided their vendors with local auction clearance rates and the average

The data showed that 48% of those vendors who were given local auction clearance rates by their agent reported their sales experience as excellent, as did 47% of those who received average time on market information. This was 12-13% higher than the general response where 35% of vendors rated their overall experience as excellent. The value of sharing important market information was underlined by additional results which demonstrated the role of data in helping agents develop trust and an understanding of the sales experience with their clients. Agents who provided their clients with local auction clearance rates and average time on market information were more likely to stay in touch with their agent or use him or her again. The survey showed 50% of vendors who received local auction clearance rates from their agent reported they would definitely stay in touch or use their agent again, while 48% of vendors who received average time on market information said they would use their agent again. This compares with 37% of vendors on average who said they would stay in touch with their agent.

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Male and female agents: is there a difference? “We have bought and sold with our agent, and even sold my mother’s house through him. He’s good at his job, he knows a lot of people and his results speak for themselves.” – Survey Respondent Gender equality is a reality in the New Zealand real estate industry with 49% of respondents saying their agent was male, and 51% using a female agent when they sold. (This compared to 70% male and 30% female in the Australian version of the survey). The data revealed that sex plays virtually no statistically significant role in customer satisfaction. Male agents were only slightly less likely (34%) to deliver an excellent customer experience, compared to 36% for female agents. And vendors were equally likely (37% each) to stay in touch with an agent regardless of their gender. The only areas where there were some differences was in the degree of agent skill.

about the progress of the sale was excellent, 47% of vendors with female agents experienced an excellent level of service in this regard. Similarly, 44% of vendors with male agents reported that the ability of their agent to follow up potential buyers and leads was excellent, slightly lower than the 48% of vendors with female agents.

What gender was your real estate agent?

51.3%

48.7%

Female

Male

While 41% of clients with male agents said the ability of their agent to provide regular feedback

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What did agents do that delivered impressive service? “Our agent was very kind, professional and gave us a personalised service under difficult circumstances.” – Survey Respondent

410 of the surveyed vendors shared comments on the service their agents had offered that had surprised and delighted them. However, a significant proportion of those responding to the question wrote “nothing” – nothing the agent did could be considered impressive service. By the time these responses are included, the number of positive comments correlates with the original finding of the survey that just 36% of vendors had excellent experiences. But while disgruntled vendors enjoyed the opportunity to vent about their experiences, those vendors who identified what did impress them provided insights into just how basic and simple most vendor’s expectations are.

fears of a client, showing empathy, being kind and connecting as a human being. Themes were unanimous and consistent – open and honest communication, empathy, trustworthiness, professionalism and reliability and the human connection of recognising that selling a home can be a time of stress and that vendors overwhelming need help – these stood in stark contrast to the slick agents who had mastered sales patter who left clients feeling used and abused.

Delighting vendors does not have to be expensive or time consuming for agents. Vendors are impressed when agents are thoughtful and help them solve the problems they know they have in selling the property. But really standing out omes from doing things as simple as demonstrating that you have really heard the needs, concerns or

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What agents did right ff Our agent was able to supply the names of reliable tradesmen such as carpet cleaners and window cleaners who were available at short notice. They also arranged a meeting with the auctioneer prior to the auction day. ff The level of communication our agent did was impressive – he did exactly what he said he would do.

ff Our agent offered a complete package that was clear and easy to understand. ff Our agent went above and beyond with the communication so I was never left in any doubt and never had any questions that were unanswered. ff The range of analytics on their website showing web traffic, hits, time spent looking at the property was impressive. It also showed a comparison with other sales to see how our marketing was performing.

ff It was the personal touches – such as bringing his own vacuum cleaner and giving the property a quick tidy.

ff She brought in my washing when it poured with rain at an open home!

ff Our agent changed the lightbulbs presettlement that were blown that we weren’t even aware had gone out. It was that level of detail!

ff Our agent had excellent communication and negotiation skills. She was friendly and we received a significant thank you gift after the sale.

ff He mowed the property’s lawns to keep them presentable voluntarily and without being asked. ff When a sale fell over just before Christmas while I was away, my agent went in and got the property presentation-ready again so he could show it. I was very impressed. ff My agent had great follow up – she answered the questions before I even had time to ask them. ff Our agent was honest and listened to what we wanted, which was not the experience we’ve had with agents previously. ff She was genuine and I trusted her. I really didn’t expect that in an agent.

ff I was impressed with her professionalism and honesty – that’s not something I’ve seen a lot of in most real estate agents. ff We were given a delightful photo book showcasing our home after it sold which we will always treasure. ff He lent us his weed trimmer and leaf blower to help get our garden looking perfect for open homes and photographs. ff The process was incredibly well managed even when things went wrong with our tenants. And the price they achieved was exceptional.

ff It was mainly the after-sale communication that impressed us. It feels more like we entered into a relationship with her rather than just a monetary transaction.

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What vendors say agents should do better “What should they do? Communication, communication, communication!!!” – Survey Respondent

Out of the 912 respondents, 490 commented on ways that agents could improve their service levels. Common themes included the need for honesty, communication, being empathetic towards what sellers were going through, better training for agents and making sure sellers genuinely understood the process. Despite the fact that commission was not the primary way vendors chose an agent, a lack of clarity around commission and disgruntlement about its structure was a strong theme in the research. While some of this comes from vendors comparing Kiwi commissions to their experiences overseas (especially the UK) what is clear from the comments is that the commission structure and marketing payments require better explanation from many agents.

“To receive a percentage of a purchase price which has obviously gone up substantially with the cost of housing these days is now an outrageous fee for the service provided,” wrote one respondent, summing up the sentiment of many. A significant number of comments referred to the feeling that the structure of commissions actively discouraged agents to work harder to achieve the highest price for the vendor. “Agents need to structure their commissions on a more realistic basis with the percentage to increase as the price increases rather than decreasing,” wrote one respondent.

While property prices have risen – especially in markets such as Auckland – agent service levels have not necessarily improved. So while agents are earning the same commission percent of past years, the higher base is often interpreted as agents ripping off consumers.

“They should start off by charging a commission that is commensurate with the amount of work involved,” wrote another with a third stating: “They should introduce commissions based on the time invested by the agent. They all charge fees and commission rates that are too high for the work they put in.”

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Other ways to improve The following comments identify other common themes of respondents Be more open and honest. Tell the truth and be genuine. They should do what they say they are going to do and be engaged in the process – not just skim over the top. They should be more honest and not set unrealistic price expectation. They need to be more regular in their contact and quicker about getting feedback to their clients. Be totally transparent. When a couple is selling the house due to a separation, they should provide two gift baskets instead of just one for them to fight over. They should be more up front and honest and stop trying it on by saying they will get a better price than is realistic to just get the listing. Restructure the fee structure so that it is truly in the agents best interests to get the best price for their seller. The model seems to be based on sheer turnover of properties and diminishing returns on effort beyond just selling versus doing the work to get the best price which negates any incentive for the agents acting in the best interests of the vendor. This was a big eye opener for us. Agents need to change their mindset to begin with. When they are given a listing, someone is entrusting their biggest nest egg to them. Respect it and keep it secure. Be more genuine, less sales-focussed, and show genuine interest in the vendor as a person, not just focus on the sale and making money out of them. Better communication, better follow-up, listen more, be proactive and justify their commission fees. Stay in touch and deliver all news and feedback – the good and the bad – without sugar coating. Be human! It’s not just about a quick sale to line their pockets. More honesty to vendors about how much realistically they should expect for their homes.

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What vendors will do differently the next time they sell a home “We will not be so naïve and trusting and arm ourselves with more information and stand up for ourselves more and not cave in to pressure to sell way below the asking price.” – Survey Respondent More than half of survey respondents left comments about what they would do differently the next time they sell. Common themes included negotiating harder on commissions, doing more research about the market, doing more research about which agent to use, being more assertive with agents about their expectations and taking more time to prepare the home for sale. Of these comments, an even 100 identified that they would not use an agent again – nearly 19%. This number is in alignment with the other findings of the survey that show 18% clients felt their recent real estate experience was poor to disastrous. This is of huge significance for the real estate industry in New Zealand; for with technological innovation fast identifying solutions that connect buyers to sellers without the need for an agent, there are 18-19% of recent customers who are now determined never to use an agent again. How big a deal is this really? Let’s examine the numbers. CoreLogic data shows there were 91,176 sales at a gross value of $58.3 billion over the past 12 months to 31 June 2018. The survey shows that 18% of vendors experienced poor or disastrous service. Put into market context, this represents 16,412 sales or nearly $210 million annually in commissions (based on a 2% commission rate). This is a market sizing that any disruptor would be glad to win. Looked at in this light, it is not so much that the technology is going to lure people away from using an agent as much as the industry is consistently destroying its relationship with nearly one in five people it deals with – and this body of people represents a significant opportunity for newcomers to enter the market.

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Next time I sell Below are a selection of comments from respondents that captured common sentiments

I will probably use an agent as I don’t live near my properties. But I will be more assertive on some of my recommendations and suggestions which were not considered last time.

I will do more research and not rely on advice from family and friends. I would explore more options for agents.

I’d potentially do a private sale and not use an agent. We’ve been lied to and misinformed by so many that we have very little trust in them.

I’ll get a building inspection done before listing to identify any issues that may need to be resolved before the stress of potential buyers coming on board.

I’d insist on better photos and a floor plan.

Get more prepared in terms of the presentation of our home and getting it ready earlier. I’d think more about potential buyers and what they are interested in and cater the layout of the house to that.

I’m not sure if I’d do anything different except choose a selling method to suit the times. Auctions have gone off the boil now, so that’s not a method I’d choose today.

I’ll get the agent to prove their abilities at actually selling homes, not how good they are at winning listings!

I’ll be going to a lot of open homes before I decide to sell so I can see my potential agent in action.

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6 behaviours that improve service

1 2 3 4 5 6

Be honest, open, transparent and realistic – especially when discussing price expectations.

Listen and understand the needs of your vendors. Take their anxieties and

personal circumstances into account when determining a sales and marketing strategy. Don’t force fit people into your model.

Be accountable and trustworthy

– do everything you say you will do, when you say you will do it.

Communicate. Regular contact and follow up is essential, especially if the news is not good.

Tell vendors what to expect.

Selling is stressful, things sometimes go wrong. While you’ve seen it all before, they probably haven’t. Let them know how you handle typical problems in advance so they are forearmed.

Focus on the relationship, not the sale.

Vendors remember the feeling you leave them with and they will share that experience - good or bad - with friends and relatives. Done well, it should be a source of referral for your business.

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8 behaviours that offend vendors The following were highlighted consistently across the survey as behaviours that offended vendors and delivered a poor service experience. Agents who engage in these behaviours experience low repeat business, a bad reputation in their markets and perpetuate unhelpful stereotypes about agents in general.

1 2 3 4

Telling vendors a price to win the listing and immediately managing them down once the paperwork is signed. Pushing vendors into sales methods such as auctions that they are uncomfortable with. Encouraging vendors to take expensive advertising packages across the expected sale period, selling in record time, and refusing to refund unused marketing dollars. Refusing to reshoot or redo marketing materials when the vendor is not happy with how their home is presented.

5 6 7 8

Failing to explain the commission structure clearly and demonstrating how it will help the vendor achieve the result they expect. Patronising, dismissive, disrespectful and arrogant behaviour. Failing to respond to requests for information, failing to keep vendors up to date with the progress of their campaign, or the settlement, failing to do what the agent said they would do. Appearing to place the interests of the buyer ahead of the vendor in the negotiation.

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Conclusion Selling a property is an activity most people do only a few times in a lifetime. This means that by definition, real estate agents have a high ‘churn’ rate and need to constantly find new properties to sell, and clients to service.

The survey shows that vendors define an excellent real estate experience as a trusted relationship where their needs are understood, their interests are protected and they achieve the result they expected – or better – from hiring such a service.

But the Vendor Perceptions of Real Estate Agents identifies that poor service levels from just over a third of the industry mean agents are throwing away many more potential clients than they need to. This high number of dissatisfied vendors (two in every five) leads to low referrals and even lower repeat business. Seen longer term in the context of technological disruption, this poses a real risk for a significant proportion of the industry.

To this end, they are looking for empathy, great communication, and expert guidance through the process, which due to its high stakes, feels fraught with danger. Delivering this behaviour consistently is the challenge for real estate agents and the businesses they work in.

However what is also clear from the survey is just how basic and potentially easy it is for agents to lift their game. When a big picture view is taken of all of the statistics and data points, we see some key trends start to emerge – that if agents treat their vendors as a product where the key outcome is ‘sell the property’ and the focus is short term dollars, the vendor experience is likely to be poor. However, when agents take a longer term view of the relationship and see every vendor as an opportunity to demonstrate excellence, they win in both the short and longer term, build their reputation and significantly boost their referral business.

The data clearly shows that going forward, the emphasis on real estate training needs to move away from convincing vendors about the rightness of choosing a marketing model or sales process and the scripts and dialogues that seek to close more than connect. Rather, it is in connecting with vendors, communicating genuinely, recognising and being prepared to work to protect their interests, sharing knowledge and building their trust that will ensure our businesses thrive and flourish.

The survey reveals just how ‘basic’ some of these expectations are when delivering great service. They are rooted in the need for real estate agents to be more human and less sales machines.

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