What is the single most significant ‘point of difference’ setting Barfoot & Thompson apart from other real estate companies?
It appears to be a common assumption that all real estate companies operate in fundamentally the same way. The reality is that there is one standout point of difference in the way Barfoot & Thompson operates when compared to almost every other provider you could name. Is this the reason we have received the REINZ award for Best Large Agency of the Year (all disciplines) for the last ten consecutive years? Is this the reason that more homeowners choose to sell with Barfoot & Thompson than any other real estate company? We don’t know, but it is a factor you should consider before deciding which company to entrust your most valuable asset to.
How do most real estate companies operate under the franchise model?
Firstly, what do we mean by a franchise real estate business? This is where an independent business owner pays an annual franchise license fee to be included under the ‘brand banner’ of a recognised real estate name. Some examples of this model are – Harcourts, Ray White, Mike Pero, Professionals, First National, Century 21, Harveys, and the list goes on…
Your listing is exclusive to the particular franchise business you list with. It is not shared with other franchises, even though they are all trading under the same company banner. For an agent from one of those other businesses to access your property listing, they must pass through the ‘gatekeeper’ of the listing agent/office, even though they have the same agency logo in the front window.
The financial reward for an agent from another franchise to introduce buyers to your home is minimal (usually 20% of the commission). For this reason, agents under the franchise system don’t tend to be supportive of listings from other franchises. Their prime focus is listings held within their own business.
The end result of this system is that franchised-based agents tend to sell more of their own listings (great for the individual agent’s income). It also means that your listing is less likely to be supported by agents from other franchise offices, even though they are all supposedly working for the same company (not good for you – the seller). Competition is key when looking to achieve the best price for your home. Fundamentally, it seems obvious to us that the franchise model is great for the listing agent/franchise but is not geared to maximising the potential buyer introductions and competition for your home.
How does Barfoot & Thompson do things differently from the franchise businesses?
Barfoot & Thompson does not use the franchise model. It remains a wholly family-owned business with all 73 Auckland branches and 1600+ agents being part of a huge, open sales network.
Your listing is held in a central listing system and is fully available to any agent working with buyers on their database. There are no barriers placed in the way of interested parties, and all agents and branch offices are actively encouraged to support every listing and every vendor (seller). Your property becomes a company-wide listing rather than an individual office listing.
The selling commission percentages (the commission earned by the agent introducing the buyer) are incentivised to encourage agents to introduce customers from their database to the listings of other agents. These rates are so much better than the franchise rate; we have many agents who work exclusively with buyers to find homes from within our huge database of company listings.
The end result of our system is that the listing agent tends to sell less of their own listings, as the premium buyer introduction is very often via another agent from within our company network. The other outcome is that we ensure maximum buyer competition for our vendor’s property (great for you).
This system works to our client’s benefit in all market conditions; however, when the market is in a cooler phase, it becomes even more important as it ensures that every possible buyer for your property is discovered. Traditionally the market share held by Barfoot & Thompson strengthens during a cooler market, as more sellers recognise that our unequalled market reach will be a key factor to their success. The power of our branch/agent network simply can’t be matched by any of our franchised-based competitors or small ‘boutique’ real estate companies providing only one or two offices and a modest-sized sales team.
Barfoots’ digital lockboxes use cutting-edge technology with each Barfoot salesperson having a unique e-key using their smartphone to access your property. Security of your property is paramount to us and importantly, should an offer come through on your property, the data registrations from the lockbox enable us to identify every possible purchaser to give them an opportunity to own your property.
Also very important, please read on.
DOES THE ‘DISCOUNT AGENT’ REALLY SAVE YOU MONEY?
There are several disadvantages for a homeowner engaging in business with a real estate agent offering ‘discounts’ and ‘giveaways’.
Marketing: If an agent offers to cover the cost of advertising the property, please consider:
Many agents who say they will cover the cost of advertising don’t properly advertise the property. It’s vital to see a breakdown of how and where it will be advertised.
More importantly, a salesperson who invests his/her own funds into the advertising of your property now has a personal financial interest in the sale. It makes sense that they will want to recoup this cost and will only get their money back if they make the sale. For this reason, their motivation has shifted to making any deal happen rather than the deal best of you. Avoid having your agent as a financial partner. Your agent needs to remain objectively neutral and be there to represent you professionally whilst delivering you the best possible price achievable.
Commission: If an agent offers a discounted commission, please consider:
If an agent is prepared to negotiate away his/her professional fees, often without you even asking, are you confident that this person will be the skilled negotiator you need to achieve a premium price when working with buyers for your property?
If your home is listed with a discounted commission, and there is a similar home listed by the same company at a standard commission rate, which property do you think agents will be more motivated to introduce buyers to? Why would you risk introducing a factor which may potentially be a disincentive to agents introducing buyers to your home?
Have you selected this agent to represent you because you are confident that he/she will deliver the best result or because he/she appears to be cheaper?
If an agent is confident in his/her professional skills and service, why have they felt the need to utilise the tactic of discounting their commission rates to secure new clients?
The really big question is – Do you want a premium result or a discount service? The ‘perceived savings’ you make dealing with a discount agent is often quickly lost by a poor sales result. It’s the money that you take away at the end of the process that counts – not the commission level or marketing investment. Unfortunately, the reality is that when owners list with one of these ‘discount agents’ they don’t know how much money they may have in fact lost, as they never see the result they could have achieved by working with New Zealand’s leading Real Estate Company.
We have found in life that the old adage “You get what you pay for” invariably prevails. Barfoot & Thompson offers the same fair rates to all our valued clients and consistently delivers premium results. We believe that this is why more homeowners continue to select us to represent them than any other real estate company in Auckland.
Contact us for a chat anytime. Thanks, Lisa & Mark