Reports of an increasing trend towards selling homes in secret have emerged in Australian media since January. While many journalists cite buyers agents becoming a more influential in the marketplace, some have grasped the dominant reason – a rise in buyer database marketing.
The use of buyer or tenant databases by real estate agents is no new phenomenon, but the greatest challenge agents have always faced is keeping the information contained in their databases fresh and up-to-date. There are several reasons why.
Firstly, there’s a fundamental tendency for buyers to provide agents a description of their dream home and desired budget at the very beginning of their search phase. This description or data, once it becomes part of an agent’s database, often changes within weeks as buyers discover their budget needs to be increased or they adjust their wish list to stay within their budget. They rarely inform the agent of these changes so the agent’s database soon stops being a reflection of their needs. Likewise, when they buy a property, they’re unlikely to inform all estate agents they’ve met during the process that they no longer need an agent’s services.
Secondly, agents are businesspeople and chiefly entrepreneurial by nature. They rarely relish the idea of hours of data entry or paperwork so will invest their time where they see the best return. This means that in order to keep a database well maintained and accurate, they need to employ somebody within the business to look after that function. Many agencies are small businesses, not well enough resourced to do so. Agents find that phoning buyers on their database is, at best, labourious and time intensive, and at worst, an inconvenience for buyers who either find the agent’s approach a waste of their time or worse, an invasion of privacy.
For both sides of the equation, there is little gain.
In today’s marketplace, the trend of property owners who prefer not to open their house for public inspection or advertise in traditional print media is on the rise. In upper price ranges, there may be security concerns with an open home as most home insurance contents policies are void in such circumstances. Or, in an economic downturn, the owner may wish to avoid creating the impression of suffering financial problems and being forced to sell, preferring to simply announce their sale to friends and family afterwards. In middle market price ranges, some owners just don’t want, in some instances, more than 200 buyers walking through their home and bedrooms.
Enter the buyers agent. It seems that with time poor Australian families, the willingness to pay a buyers agent to find their next property has grown in appeal. With more and more listings being kept ‘in the drawer’ and marketed quietly, the attraction is obvious. The buyer feels they won’t be exposed the competitive conditions of the open market and they’ll be able to close their purchase with less stress and, potentially, faster.
In a recent Daily Telegraph report, Real Estate Buyers Agents Association of Australia president Byron Rose said the association had been fielding a surge of interest from real estate agents wanting to become buyers agents over the past six months, due to increased demand for such services.
However, what is increasingly clear is that new, smarter, buyer database systems are in use across the profession, particularly by large networks who are taking advantage of their large scale and market penetration. The agents who are using them effectively are winning on all fronts. With systems that effectively resolve the problem of data freshness, suddenly customers are being notified of properties that suit their needs in a timely, convenient fashion. With buyers responding rapidly, agents are winning new customers, providing better customer service and selling properties faster than ever before – without print advertising.
In the case of First National Real Estate, the Utopia buyer/tenant matching system introduces methodology that guarantees data is kept fresh. It also places customers in control; allowing them to update their search criteria through websites, choose the information they receive, and, the method by which they receive it. So, with customers receiving newsletters, just listed notifications, price reduction notifications, new vacant rental property notifications by email, SMS or MMS, they don’t feel any pressure and can take action when it suits them.
Win, win!
While print advertising can still play an important role in the overall marketing mix, agents are finding that the new generation of databases mean they no longer need to advertise because they can send exclusive listings to buyers who are ready to purchase via text message or email.
