How do we make real estate sales more efficient, and therefore, cheaper?

Saturday 17th August 2024
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If you’ve sold a house recently, you’ve probably been a bit gobsmacked by what your real estate agent charged. 

Here in Queenstown, commissions of 3% plus GST or more are common.  An agent will charge approx. $41,400 plus marketing to sell a $1.2m house.

The problem with commissions is that real estate agents have a lot of unbillable time.  For your average agent, the 20% of successful time needs to fund the 80% of unbillable time – time spent prospecting for new listings, networking, appraising houses, servicing their European cars etc.  We don’t think it’s fair that house sellers get charged that way.

At Weka, if a staff member spent 80% of their time on unproductive work, we’d have a problem.

Here’s what we are doing to make selling real estate more efficient, and therefore, cheaper:

  • We don’t prospect for listings.  We don’t drop flyers into letterboxes or door knock.  If a vendor wants us to sell their house, they approach us.  Prospecting isn’t a good use of our time, so we don’t do it.

 

  • 80% of our work is legal work that produces fees.  We fit our real estate work around our legal work.  We are in our office Monday – Friday, 8.30am – 5pm, working.  Weka is a full time job.  We don’t expect our real estate clients to pay us unless we’re working on selling their house.

 

  • There are times when we market a property that doesn’t sell and we don’t charge a fee.  That time teaches us lessons (what does and doesn’t sell) and regularly introduces us to new clients.  We aren’t a one trick pony – you might not want to buy this house, but you might need a will or a divorce!  There’s enough fat in our system that this time doesn’t need to be subsidised by another client who does sell a house with us.

 

  • We use “Lean Technology” skills taken from our legal practice to increase efficiencies.  After four years of selling houses, we’ve got a very efficient real estate workflow process.

 

  • We don't have expensive offices or spend a lot on marketing our brand.  We pay our receptionist with chicken sticks and pet milk (Good boy Harry) and our work car is a Toyota.