Wednesday, April 4, 2007

Measuring effort

Austin Hughes told Property Partners that "Once growth is sustained, declines in property values are fairly unusual, occurring with only a 1 in 4 probability." But if they were your odds of surviving a storm you'd be worried, wouldn't you.

With such increased volumes of houses on the market (up 50% in Dublin this quarter on Q1 2006 according to our data), and such reduced numbers of buyers apparently putting their money down on the table, there's a whole new dynamic in the market.

In new homes, marketing services providers can expect to be asked to go to even greater lengths to promote their clients' developments. A grand piano was brought into the showhouse in Cairnbrook at the weekend release & a pianist hired to play for gathered hunters.

In the second-hand market, things are a little more difficult because most of the marketing tactics that new developments can utilise are not appropriate.

Agents are certainly having to work a lot harder to find and hook buyers right across the residential board, to be more careful about leads and follow-through. The question is will some start to think they could do better in some other sector of business, with the same or even less effort.

The bottom line is, if the fees are not paying the bills, cutbacks will ensue and people will start to (or be forced to) look elsewhere for a decent living.

Having written ourselves recently about the time agents put into each sale, we were pleased to see Mr Day in Lisney saying something similar to the Business Post at the weekend: "it was more a case of agents turning away work, based on the fact they didn’t believe the fee justified the amount of work involved. Day said the saleability of the property, coupled with the amount of time an agent expects to devote to a property, dictated the fee."

But is it amazing that a statement like this can end up in the same article: "
Currently, people have to pay on average 1 per cent, which means an agent earns about €3,000 when he or she sells a house for €300,000. That’s a lot of money for little effort, especially in recent years."

"Little effort"? What does that mean? Where's the footnote for the research indicating how "effort" was measured? Does it take into consideration time? Attention to detail? Thoroughness of follow-up? Market knowledge & expertise? Skill at reading people, at negotiating?

How much "effort" has gone into creating companies & brands like Lisney, like Sherry FitzGerald that can sell homes in style? Does the Business Post's defintion of "effort" here include any aspect of how much over the vendor's ideal price the agent achieved for them? How much over the price they'd have been able to get for themselves? How much over the price another agent would get?

Or what about how much less stress the vendor experiences by not having to deal with all kinds of buyers themselves, from nosy neighbours to professional tyre-kickers to hard-nosed investors to nit-picking innocents? Or how much less stress one agent causes than another?

Art by Porter Mason at

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