Until recently, only real estate agencies and banks had access to the latest sale data via industry-only databases. Even though sale data is a matter of public record, only industry organisations had access to it via their memberships with the Real Estate Institute or by subscription to database providers like RPNZ and Property Guru.
Vendors were reliant on their agent to estimate the market value of their property, properties generally went to market unpriced so that the agent could feel their way and extract the best dollar as they went and buyers had to educate themselves on value by attending auctions, calling the local agents or by having an offer rejected by a vendor. It’s fair to say there was a good deal of guesswork involved all round.
Since then we’ve seen online valuation tools like Homes.co.nz and Property Insights from TradeMe hit the market and provide free and unlimited access to local sale data. Personally I sometimes find these sites a bit hit and miss and the estimated price range sometimes too wide to be of much use. For example, we recently sold this property in Glendene for nearly $100,000 more than it was ‘valued’ on Homes.co.nz and Property Insights and a good agent can usually get a higher price than it’s estimated online. However, these tools are a useful start and most users understand that the data doesn’t take into account any special features or improvements the vendor has made and that the data is by nature historical so it’s best taken with a pinch of salt.
Just recently, banks and brokers have started providing buyers access to Valocity. Valocity is an online valuation tool for banks so what’s interesting about this is that for the first time the bank, the buyer and the real estate agency acting for the vendor are now accessing the same data when it comes to the sale of a house.
This means there’s even more transparency on price and less room for speculation than ever before. Sure, a stonkingly good property with unique features and benefits could still sell above its market value, but generally the gap between buyer and seller has closed and property is becoming more of a commodity with a market price just like any other product.
For me this begs the question, should we use this as an opportunity to change the way we sell? Should properties be measured and valued and require vendors to get a building inspection before going to market so that this information can be handed to buyers? If we now know what a property is likely to sell for, should we bite the bullet and analyse its structural aspects up front as well?
The big question then would be, how does this change the role of real estate salespeople? As the focus for our role moves away from price, I can see that we will become less salesperson and more legal and financial advisor. Already, we find ourselves asking ‘Have you got a letter of pre-approval from the bank?’, ‘Do we need to word your finance clause in such a way that you’re not tied to one institution?’ and ‘Are you familiar with a vendor warranty?’ before we have a conversation about price. My guess is that the hustlers and old sales dogs in our industry won’t love the shift in their role and that real estate sales will become a younger person’s game and a more traditional career path than it has been in the past.