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Stacey Moseley
Real estate agents are fast becoming irrelevant to consumers, according to one leading real estate professional, and in order to combat this he has set in place what he believes is an innovative business model.
“There is a thin line between a real estate agent and a vendor,” Barry Goldman, general manager of LEDA Real Estate, told Real Estate Business.
“If you can sell your own car online why can’t people sell their own home?”
Mr Goldman, who has 40 years' experience in real estate, believes the industry is not giving consumers what it is they are after - value for money - and thus, over the last three years has developed a new real estate business model.
LEDA Real Estate operates out of one central office in Sydney and employs sales staff to work remotely from home offices. The staff are ideally parents who are very connected with their community (real estate background is not compulsory). LEDA Real Estate charge a 0.5 per cent commission fee no matter what the home is, and a $1,450 cost for marketing and an extra $500 if the vendor uses an auction campaign.
“We are not a discounting agency, we do not discount our fee - we ask for one flat commission rate and one marketing rate, there are no hidden fees. We are upfront with our consumers,” he said.
However, the biggest difference in his model is that the vendor operates the open home.
“Who knows their home better than the vendor?” Mr Goldman asked.
“LEDA staff will set up the open home and train the vendor in what they need to do, but the actual face-to-face relationship is developed with the possible buyers and vendor.
“They can tell them about the best place to put certain plants in the garden, or where the kids like to play.
“As a business, you are saving on overhead costs of having 10 open homes running every Saturday. If we wanted to we could have 1,000 open homes occurring every weekend.”
According to Mr Goldman, the way LEDA Real Estate is structured means the consumer receives a hybrid model.
“Consumers are not interested in paying some kid to stand at their front door and write down names,” he explains.
“I went to an open home recently and asked a young employee to tell me a story about the home - he said he couldn’t.
“If I were that vendor I’d be furious that I was paying people who know nothing about the property.”
Mr Goldman warns that agents need to start thinking differently or risk being left behind.
“The industry really needs to start thinking outside the box with how they run their business or they won’t survive in the current business climate,” he said.
At the moment LEDA Real Estate operate with seven sales staff in Sydney, with plans to grow into Brisbane and Melbourne in the next year.
LEDA Real Estate is also trialing a new model for property management, however it is yet to be launched.
- <p>A good agent is part of your profit, not your costs!! <p class='break'>&nbsp;</p>It's all about negotiation skills; relationship building with your buyers & excellent marketing! For Goldman to have the notion that a kid at the door taking names is the typical role of an agent astounds me! What the?? Who the heck did he spend 40 years working for?? Clearly an example of maybe how he worked??<p class='break'>&nbsp;</p>I certainly take the time to make sure I know EVERYTHING about the home and often include commentary from the owners themselves in my marketing. <p class='break'>&nbsp;</p>So many times, we agents have to come to the aid of the 'private sellers' who's homes languish unsold in the marketplace for months! <p class='break'>&nbsp;</p>As I said, a good agent is part of your profit, not your costs!! <p class='break'>&nbsp;</p>PS I'll give his business a year!!</p>0
- <p>Mmm, wonder if the sales agents are licensed ? If they're running an office from home surely this would be deemed to be a separate place of business which should be under the supervision of a licensee? They'll no doubt get a reasonable amount of business from the penny pinchers who think they're saving themselves money when in fact most of them lose out by thousands more through not having an experienced negotiator representing them throughout the process. Not convinced of this group's longevity though.</p>0
- <p>Simple : It doesn't work - as my grand father used to say with private sellers - the buyer doesn't want to seem anxious and the seller wont call back interested parties in case they seem desperate hence nothing happens. This model is simply to make money out of the advertising rather than focussing on the selling process. Unfortunately the sellers see the reduced fees and its a race to the bottom to see who can sell the home for less.</p>0
- <p>I don't know where you work, Paul, but in my agency, in Brisbane, we do open homes, and may get 20 or more through each one a weekend, if that's not competition, driving the price of the property up then I don't know what is, fear of loss is a great motivator! Prime example last weekend of a property with 71 groups through over two open houses, 10 offers and $30,000 higher achieved on the sale price than the vendor's expectations. DON'T TELL ME OPEN HOMES DON'T WORK! And yes my database is full of qualified buyers, guess what, my homes sell for top dollar in under 14 days usually to buyers on my database. Another one of the major reasons to use a Professional Agent!</p>0
- <p>Why do we do open homes in the first place? For our own buyer database & the chance to get more listings? A motivated buyer will not be put off if there is not an open home & probably would not want to wait for the open anyway.<p class='break'>&nbsp;</p>England for example do not conduct open homes and most buyers go to the home without an agent but property still sells and agents still earn good commission.</p>0
- <p>Barry, you're charging too much. There are other services like this that have been cropping up over the past few years.<p class='break'>&nbsp;</p><p class='break'>&nbsp;</p><a href="forsaleforlease.com.au/" rel="nofollow">forsaleforlease.com.au/</a> Starts from $149 <p class='break'>&nbsp;</p><a href="www.forsalebyowner.com.au/" rel="nofollow">www.forsalebyowner.com....</a> Starts from $699<p class='break'>&nbsp;</p><p class='break'>&nbsp;</p>...and whilst they look like Private Seller sites, these services are being run by real estate agents (otherwise they can't list on <a href="realestate.com.au" rel="nofollow">realestate.com.au</a>)<p class='break'>&nbsp;</p><p class='break'>&nbsp;</p>Agents definitely need to be mindful about this Paradigm Shift, (it's already having an impact on the income pie) and whilst up against these competitors you're not a discount agent, in fact, you seem to be expensive compared to them. Is there something special that LEDA provide that I'm missing?</p>0
- <p>For years there has been numbers of would-be's with cock-a-name ideas trying to replace professional real estate agents who provide knowledge - experience and most importantly the ability to unemotionally negotiate the price. <p class='break'>&nbsp;</p>It is almost a GUARANTEE that the few thousand saved in the commission is more than offset in the reduction in the end selling price negotiated by the professional agent.</p>0
- <p>It was tried in Toowoomba by a well know agent but it failed due to following up and attending to all the inquiries which the sellers don�t want to do and the reduced commission just did not stage up to. I sell more property during the time driving to the property then at the inspection itself.<br>Many of my negotiations failed where the sellers were present due to the way they saying things.<br>The agent also taking the �emotions� out of the selling process.</p>0
- <p>"the vendor operates the open home" it says nothing about them dealing with enquiries at all #3 - I like the idea as a buyer that I can meet the owner and ask some questions.</p>0
- <p>A kid at the door taking names and numbers?<p class='break'>&nbsp;</p>When Mr Goldman visits his GP, does he seek advise on medication or treatment etc from the receptionist or does he seek advise from the Doctor?</p>0
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