Still many poor agents in rich market
January 28th, 2014 by Geoff Baldwin
There is no argument that today’s property market across Australia is either strong or improving rapidly however there are still many agents who are not making money despite what seems to be prosperous times according to RE/MAX WA Managing Director, Geoff Baldwin.
“It is not unusual in the current environment, for properties to attract multiple offers and many top agents are achieving double and even triple the sales they were making a year ago however closer analysis shows that Pareto’s 80 – 20 principal continues to apply with 80 percent of the sales being made by 20 percent or less of agents”, he said.
“Listings are much easier to sell with buyer demand at its highest for many years but the critical ingredient for agents to enjoy this market is for them to have a good stock of listings.
“Many weaker agents are finding out that long term success is not about selling properties to buyers but more importantly, being able to earn the trust and confidence of sellers.
“Agents who lack the ability to demonstrate their skills, experience, knowledge and ability to a property owner will often resort to drastically discounting their fees to attract listings however sellers soon realise that any perceived saving in commission pales into insignificance compared to what is lost through the weaker agent’s inability to attract and negotiate the optimum price.
“In 2013 there were approximately 450,000 house and apartment sales in Australia and there are approximately 40,000 real estate salespeople which is an average of around 11.5 sales per salesperson or one sale per month.
“When you take into account the number of sales made outside of the real estate industry and you also consider that the top echelon of salespeople are selling up to 8 properties a month, it is obvious that a large proportion of agents are still battling despite the strengthening market.
“Agents who cannot consistently list properties simply can’t survive regardless of the strength of the market but more importantly, if they don’t have the required attributes to impress a seller then they are very unlikely to have what it takes to achieve the best selling price”, Mr Baldwin said.