The Prospects Are Good… mybusinessinrealestate.com

Every agent worth even half his salt knows the basic value of comparative sales data. Having access to good data from a decent research provider is not a differentiator or a luxury any more for Australian real estate businesses – it’s a critical part of doing business.

Not only do vendors expect to see comparative sales in a listing appraisal, there’s been increasing legislation from the ACCC and the Department of Fair Trading over recent years around hook pricing and underquoting in general. It means every agent needs to have a good comparable market analysis in their files to back up everything they do that has a number attached to it – appraisals, agency agreements, print ads, on-line ads, flyers and exchanges with prospective buyers just to name a few.

But according to Director of Property Data Solutions (pricefinder.com.au) Tom White, many agents are missing out on the other possible uses for historical sales data and the other information available from research providers. And in many cases, the data and information they’re already paying for is not being used to maximum benefit.

It’s becoming more obvious that prospecting is a fundamental key to real estate sales success. Not just at the beginning of a sales career, but always and forever. Agents who don’t prospect will quickly find themselves with a declining business and eventually, a declining income too. Prospecting has to be underpinned by a good database which is used for regular, useful communication. You can read more about that in this month’s article from Mark McLeod.

It’s also clear that any sort of mainstream marketing has become less effective over the years as consumers become more immune to traditional methods. Putting an advertisement in a paper or magazine is no longer sure to generate the level of enquiry it once may have and it’s not unusual to have a zero response rate from this type of approach.

Tom says via some research providers, it’s possible to search any particular area for properties that have been owned by the same person for longer than the average ownership in that area – a time frame which will of course vary from place to place. The resulting list will show those owners who may be more likely statistically to be selling in the short to medium term, as well as their names and the address for services.

Although privacy laws restrict agents from sending those owners direct mail-outs specifically addressed to them, Tom says there are other ways in which the information can be used effectively. Mail outs to these owners simply entitled “To the home owner” (or door knocking) do not breach any privacy laws and are far more targeted than the traditional method of just blanketing a geographical area.

Although some real estate agents believe that anything not specifically addressed to an individual will not get opened, the reality is, the success rate is as much about how compelling the information is as to whether or not it has a name on the front. Uninteresting information or information that’s not useful will get thrown away regardless, just as interesting information has a good chance of being read and possibly acted upon even if it’s not personally addressed.

Tom says pricefinder has recently introduced a new mapping tool which allows agents to effectively draw a boundary around the area they want to target, which could cover more than one suburb or bisect particular suburbs as well.

“Many agents still door knock – drawing up a list of the most likely prospects before you start is an excellent way to use that prospecting time effectively. Doorknocking a particular owner because you are aware they are statistically more likely to require your services does not breach any privacy laws” Tom said.

“Although we see many agents dismissing the opportunity to use this information for whatever reason, the ones that use it get great results and we’ve heard excellent feedback about success rates. Using factual data is a great way to sharpen up your prospect list.”

Tom says on top of prospecting, many successful principals and salespeople use data to manage their businesses as well as their customer’s expectations.

“When you understand what has really happened in a market, it’s easier to work out where the market might be heading. When you pull apart the data into quartiles, you’ll see different price segments with different trends and this starts becoming really powerful information.”

“It’s possible to compare what the most expensive house prices are doing compared to the middle of the range. You can also use market share tools to see how your business or personal market share is tracking against the local market.”

“All in all, when you’re paying a flat fee for data as our customers do, it makes sense to use every feature that can help your business. We run various continuing education programs, as would most data providers, to help our customers get the best out of their service. But not everyone is interested – as they say, you can lead the horse to water, but whether or not he drinks is up to him” Tom says.

“Data is not just a legal necessity, it’s about working smarter. Most agents use about 10% of what’s on offer and don’t even realise what they’re missing out on. It’s worth dedicating some time to looking at what is available – it just might be a pleasant surprise.”

Tom White has a strong international technology background spanning almost 20 years. Returning to Australia in 2001 to take the role of Chief Information Officer at the Ray White Group, Tom left to start Property Data Solutions (pricefinder.com.au) in 2004. PDS is Australia’s fastest growing real estate data provider.