The real estate industry has been in an uproar the last few weeks over the big increase in price announced by Trade Me. It’s actually a change in price structure - rather than a cap on monthly fees to agents it changes to a per listing fee (uncapped). For larger agencies it is a very significant increase in costs.
The public debate on this has not been well handled by the industry - the $183 price per listing pales as an insignificant cost against a $20,000 commission. That is an inaccurate comparison, but this time the obfuscation the industry relies on with commission fees has bitten it (couldn’t resist using the word).
The change has also been poorly handled by Trade Me. It looks for all money (pun intended) like they had a revenue problem - the last annual report discussion outlined flat growth in their core business areas, so they needed extra dollars and fast. Bam, whack it to real estate agencies.
There are two main buyer property websites in NZ - www.trademe.co.nz/property and www.realestate.co.nz. After that it doesn’t matter. So if your main competitor had just announced a major price increase, with their customer base in an uproar you would be making hay - right?
It seems www.realestate.co.nz is out to lunch. Maybe they’re on a golf day, playing bowls, fishing, or attending whatever pre-christmas industry event is underway. Maybe they are waiting for Brendon to start. Whatever, they’ve been deadly quiet.
So without actually being responsible for running it or the insane challenge of managing the industry ownership politics (best wishes Brendon), here is my prescription.
First the differences and there are some important ones...
Trade Me is the big daddy when it comes to traffic. But if you boil it down that is the only, admittedly major, strength Trade Me has. www.realestate.co.nz has some important advantages - time to tell someone about it.
Let’s start with the basics. The most important aspect of real estate - location, location, location. Bottom line - Trade Me Property search sucks. Trade Me has been hoovering cash for profits and the lack of technical development shows. The ability to accurately search for a specific property on Trade Me is so basic it’s terrible, it’s just an online newspaper. The lowest level of search on Trade Me is suburb - www.realestate.co.nz has a huge advantage with their map search capability.
Just work on getting agents to actually put addresses on their listings!
Don’t even talk about lifestyle properties. They just disappear on Trade Me, www.realestate.co.nz wins hands down.
Modern real estate selling is not just about a poor quality picture and short boring description. The internet provides the opportunity to wow the viewer - floor plans, video, whatever. Guess what - none of that is possible on Trade Me.
Trade Me has other artificial restrictions - the number of photos you can include (20) and the length of the description. www.realestate.co.nz does not. With Trade Me you are using a system set up to sell unwanted $20 christmas gifts to market your $500,000 home.
Finally, the real estate industry owns www.realestate.co.nz. It is not just a profit maximising public company.
So here is the prescription…
Get every listing on the www.realestate.co.nz site. Give every private seller a free listing. Charge them nothing, nada, $0. The opportunity to list on www.realestate.co.nz makes absolutely no difference whatsoever in the decision to choose an agent or sell privately. It’s completely irrelevant. Trade Me says it has all listings - chop that off at the knees, www.realestate.co.nz does too.
Market the crap out of the advantages. The industry is supposed to be the experts at marketing property, yet the industry owned website sits on the sideline. Hit it, now, hard. Tell someone, everyone, about how good the site is to find their new property.
Leverage the foot soldiers. There are 10,000+ agents out there every day pitching their services. Give them the tools and incentives to sell your services. They want www.realestate.co.nz to win - but only after they win. Show them how they win with www.realestate.co.nz and why the $183 to list on Trade Me is not required.
Starve Trade Me of content - listings. You aren’t looking ComCom, right? Pitch the benefits to agencies, take it one location at a time if you have to. Trade Me has exposed their intentions, use Australia as an example - look what has happened to the cost of listing property there. The cost isn’t going to go down. Agencies control content - make it worth their while to not list on Trade Me.
The internet rule of thumb is if you have traffic you win. But, Yahoo was the main internet search site before Google came along. Better search won. Sitting on the sideline is not a strategy for success. There is an opening for www.realestate.co.nz to change the battlefield. It takes courage, conviction and some luck to prevail.
Trade Me is vulnerable.
Does the industry portal have the Cojones to win?