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 http://bassistwanted.com/

How much do you earn per hour?

Did you know that senior counsel at the planning tribunal earn €2,250 a day and juniors €1,500. That’s around €280 per hour for senior and €190 for junior.

Now, here’s an exercise for you if you're an estate agent: Divide the fee your company got for the last property sale you achieved by the total number of hours spent by different people in the company on bringing about that sale (starting from the day the instruction was won).

So, did you manage to make anywhere near, say, €100 per hour, or was it more like €8.30 (the minimum wage rate)? Perhaps you don’t know how many hours were spent on the sale of that property, and of couse it varies considerably from property to property (and vendor to vendor, more revealingly!). It’s something agents should keep records on – a job diary for each property that vendors could see and from which they would maybe begin to understand for the first time the many, varied and time-consuming tasks that are required to sell a property properly.

And wouldn’t it be interesting to perform this on a macro level – that is, that a number of property firms would perform this analysis on a large enough scale to produce a report that reveals how much on average estate agents are making per hour selling client properties.

This could be an important part of the so-badly-needed public awareness campaign on the work of estate agents.

Of course, most would agree the average rate should not be equal to that of barristers at tribunals or consultants in operating theatres. But the (somewhat less arduous) training, the inate skills, the considerable experience and the specialist knowledge that a good estate agent offers vendors access to, is certainly worth equal to the rates charged by other business professionals offering similar levels of service.

Anyway, something agents might discuss at the IAVI get-together this weekend perhaps?