Restate was founded to help clients NET more. You can imagine our concern when we discovered that some people were saying that we “undersell” property.
The first time I heard it, I laughed it off. After all, you expect that when something new threatens the status quo, rather than rising to the challenge and improving themselves, some of the incumbents may resort to using underhand tactics.
Still, after hearing it more often, then having a member of the public post it in a Facebook comment, I became annoyed. Even angry. How could they stoop so low? I wanted to track down the source to give them an ear-full.
But what good would that do?
On reflection, we can’t control what others say or how they choose to act. We can only control ourselves. Improve ourselves. Hold ourselves accountable.
And that starts with looking in the mirror. Asking ourselves the tough questions:
Does our new model leave clients better-off? Or is there truth in the rumours?
For my peace of mind, I had to know.
Our fees are already proven to be more efficient. They’ve saved hundreds of clients, on average, close to $5,000 (compared to what they would have paid us in traditional commission).
But what about the other important metric? Is our model up to scratch on the sale price achieved?
Because saving clients on fees is only of ‘added-value’ if they also get at least the same or a better sale price as the old model.
The only thing to do was look at the evidence, to study the numbers.
I was confident our approach achieves the highest possible price because it’s designed to do so. But it’s a difficult thing to prove. There is no way of creating what, in scientific terms, is called a ‘Control’ (the same property, in the same market, sold by a different agent). So it’s impossible to honestly state what price another agent using a different approach may have achieved.
However, what we can do is look at the ‘Sale Prices’ achieved compared to ‘Rateable Values’.
To be clear: Rateable Values are not an accurate benchmark. But they are the only benchmark we have. And with a large enough data set, they should at least show a general trend.
Here is what we discovered after analysing all the residential sales in Timaru* from 1st January 2019 to 31st July 2019:
Excluding our clients, on average, properties sold for 6% above Rateable Value.
While our clients sold for an average of 7% above Rateable Value. (1)
Phew. The relief. I’ll be sleeping much easier from now on. Because it appears our model, on average, helps clients achieve a sale price of 1% more. Which may not seem like a lot, but multiply it by the value of your property, then add the average savings of around $5,000 in fees… You can do the math. So we’re pretty safe in stating that our model is achieving the desired results.
But that’s not all.
Another interesting statistic divulged in the data was the average days on the market:
Properties were on the market for an average of 63 days.
While our clients sold on average in only 45 days.
So I suppose I should thank whoever started the undersell rumour. They’ve done us a big favour – encouraging us to self-reflect and to look deeply at our results. Without them, we may have never discovered the truth…
Based on the evidence, one could argue that:
Clients who engage our model not only save thousands in fees but also sell for a higher price, in less time.
So it’s true. We do leave our clients better off. In more ways than one.
Now you may be wondering exactly how that is achieved?
Whether you’re a homeowner wanting to sell, or a real estate agent wishing to help your clients get similar results, either way, we are happy to talk.
(1) VERY IMPORTANT TO UNDERSTAND:
This does not mean your property is worth 6-7% above Rateable Value. This figure is an average from a data set of close to 500 transactions. Individual property sales varied from 39% under RV to 62% over. So please seek professional advice before making any budgeting plans.
* Sources: Corelogic – All residential property sales in Timaru City (Excluding bare land) from 1st January 2019 to 31st July 2019. Plus our own transaction database.