Time for free advertising, says agent

By Anne Gibson

A real estate agent who specialises in selling North Shore mansions has questioned the future of cut-priced agencies.

Tom Kane, manager of Premium Takapuna, said low-cost real estate sales businesses were a flawed model.

He cited the liquidation of The Joneses as evidence that low-priced techniques were often doomed.

"To find a salaried salesperson willing to work long hours, taking on the vendor's stress and putting their lives on the back-burner, is highly unlikely unless they are seeking a sainthood in a future life.

"What's not taken into account is the huge sums of money spent in international marketing that is a part of the agency's overheads and not passed on to the vendors," Kane said.

Top agents worked hard to produce results and if they achieved a sale, they were well rewarded, he said. Others in the industry fared poorly.

"Currently, agents provide their time and expertise free of charge with no remuneration or cost recovery until an unconditional sale is achieved. However the advertising bills are still paid every month. Perhaps we could look at a model whereby the advertising is free until a sale is achieved," he suggested.

There are still agencies who work for a set fee.

Russell Malcolm of Kiwi Real at Orewa charges $6900 for a sale, Jeff Brill of Rental Homes on the North Shore wants $5000, and the Go Gecko chain offers low commission rates.

Traditionally, agents sell houses for 4 per cent of the value of the house up to $300,000 and 2 per cent after that.

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