Take a look in the Nelson’s Property Weekly and you might notice Brent Palmer. He’s one of several agents with a solid handful of listings around Richmond.
It turns out he’s a nice guy, too — grew up in the region, has a wife and two children, and recently joined the Richmond School board of trustees. For the last five years he has made a “decent living” from selling properties under the Ray White Richmond franchise.
The media and real estate agents don’t have the easiest of relationships — some agents have become increasingly bitter as the property market tightens — so it is a relief to find Palmer is open to talking about his job, and even to have a reporter tag along for a day.
“I’m happy to be upfront and tell it like it is, I’ve got nothing to hide,” he says.
Darting from one property to the next in a brand new diesel-fuelled Hyundai car that he’s just bought that week, Palmer fits in seven open homes between 11.15am and 4.45pm on a Sunday.
He says the open homes are quieter than usual, even in today’s market. Four fail to attract any lookers, while others get a smattering of interest. Then there’s the last one, listed a week before, and one of the day’s least-attractive properties.
A steady stream of people file through and there are three offers on it by the end of the day.
Palmer is still working at 7pm that night dealing with the offers and by the end of the week, he has it sold, not to the highest bidder but to the one who offered the most favourable conditions.
No routine, no pattern. Palmer says that’s typical of real estate and the work that it involves. “I guess you always wonder where your next business is coming from. Nothing’s certain or set in stone.”
Salespeople aren’t employees of the agencies whose brands they work under they each run their own business and personally pay for things like petrol, computers and paper.
They claim commissions on sales they manage of usually 3 to 4 percent and Palmer has to pull one of those each month just to cover his overheads. Of the full commission, there’s GST to pay and a marketing or franchise fee, and the agency itself will take something like half. If another agent has been involved in the marketing or sale, further sharing will be done.
Recent years have seen more agents employing personal assistants, who sometimes also earn a slice of the commission. Palmer has chosen to employ a PA on a salary. He also started the year with a buyers’ assistant who earned a share of his commission but the arrangement ceased when the market slowed down.
Selling real estate is not a job for the “risk averse”, he says. Agents need to be hard-working, outgoing and business-minded to make it work.
It’s not unusual for him to work 60 hours a week with “no guarantee of getting paid”.
“In this market, you definitely have to work harder to earn less. I think everybody is down a bit, but you find the top agents are down less than others.”
Agents can’t afford to drop their commissions and vendors seem more interested in just having someone who can get the job done, he says.
“Negotiation is becoming more and more important, and I’m trained in that to help. It’s like being a doctor and providing different prescriptions to solve problems, as opposed to a hot market where anything sells.”
What about image? The smart car, the suit, the outward trappings of success? He says it’s not essential, although admits it “probably helps. “It comes down to a lot of basics asking people the right questions, being confident and proficient and being a very good listener.”
Not everyone has those qualities. Yet the numbers of registered salespeople in the Nelson Marlborough region has grown from 433 in March 2002 to a peak of 670 in March last year, then fallen to 645 in March this year. It makes sense that agent numbers follow market trends, as does their income.
An article on the website Realestate.co.nz reports the average earnings for New Zealand real estate agents peaked in 2003 at $47,000, falling back to $41,000 last December. They are tipped to fall to less than $37,000 this year.
Few figures are available for Nelson-Tasman — the best Statistics NZ can provide is 2006 census data showing 213 people in the region identified themselves as real estate agents and 126 of those had personal incomes above $56,000 a year. Twenty-one had an annual income of less than $20,000.
Some in real estate like to talk about an 80/20 rule, that being 20 percent of agents handling 80 percent of sales.
Bayleys Nelson agent Daniel Reed is the sixth-best performing Bayleys agent in New Zealand this year. He says the 80/20 rule is much more pronounced in this region, estimating that 5 percent of agents are making 95 percent of the deals.
The slowing market is “really good” for buyers and sellers, he says. “It will cull out the non-performers, big time.”
A lot of agents “don’t have the minerals” to tell people the truth, which is what is needed in this market, he says. “The quality of service will improve.”
Nelson, like everywhere else, has always had a fair turnover of salespeople but the core group of high-profile sellers remained reasonably constant throughout the property boom.
One of the few big names to bow out was Ray White agent Mary Burke, who took leave last year to go overseas. Having notched up numerous sales awards, she decided it was time for a break, but many are predicting she’ll be back before long.
Summit operations manager Vaughan Borcovsky says he’s noticed no great change in the number of agents coming and going. Summit has about 15 salespeople in each of its offices in Nelson, Richmond, Stoke and Blenheim, with smaller teams in Motueka and its commercial division.
“For us, it really comes down to office space and getting the right people.”
There is no right number of agents to service a region like Nelson, he says. “The market will dictate.”
Haven Realty principal Darryl Marshall, a stalwart of the Nelson industry, declined to be interviewed without the right to vet what was printed. He’s upfront about his reasons — he doesn’t like the media, and thinks it always focuses on the negative and is driving the market down. So surely that means it also drove the market up during the property boom? He’s reluctant to agree. Instead, it just focused on how unaffordable housing was then, he says.
Marshall isn’t alone in his views. Another long-serving agent exiting the industry expressed a similar opinion when she was approached for comment. Harcourts Nelson principal Paul Hedwig has previously asked the Nelson Mail to never seek comment from any of his salespeople and this month condemned its “sensationalist” reporting of the market.
Real Estate Institute Nelson Marlborough branch president Jenny Dickie is also annoyed by recent media reports. The prospect of another story clearly doesn’t impress her and she suggests the Nelson Mail needs to maintain a good relationship with the industry because “we’re paying a huge amount of money in advertising”.
“The thing is, I think the public and real estate agents are sick to death of the negative and they just want something positive.”
The industry “is always sort of changing” and some agents who leave will probably return when the market starts climbing back, she says.
“There’s still positivity out there.”
But Dickie admits it is a “very unsettling time” and says there are “murmurs” of further changes on the local scene.
There are also proposed law changes before Parliament that the institute strongly opposes, as they strip the industry of self-regulation.
It is unknown whether these will get passed before the election and a change of government could see them scrapped altogether.
But Green Door South Island master franchiser Gary Le Petit says the growth of his business offering “commission-free, vendor-assisted sales” is proof that the industry is facing change, whether it likes it or not.
“People are increasingly looking for a viable, cost-effective alternative. Irrespective of the value of their home, no one wants to pay more money than they have to.”
Green Door charges a flat fee for a marketing package starting at $995, which people have to pay even if their property doesn’t sell. Founded in Nelson in 2001, the franchise was rebranded to become Green Door in 2004 and branches have since sprung up around New Zealand.
“Interestingly, many of the franchisees are ex-real estate agents,” Le Petit says. “They’ve converted across from the dark side. Unfortunately, the malpractice of some has tainted the entire industry.”
Le Petit says the merger between First National and LJ Hooker in Nelson and Richmond earlier this year was just a “nice way of saying one company has gone under” and he puts the Century 21 and Ray White merger into the same category. Summit took over the LJ Hooker office in Blenheim at a similar time.
It is not all one-way, though. A new Professionals agency has opened in Stoke during the last couple of months, and Haven Realty last year established a new branch in Richmond, which some of the more prominent and experienced salespeople switched allegiance to. The Ray White Mapua office has had a change of ownership.
The industry changes have been partly responsible for former policeman Andrew MacDonald having a slower start to his real estate career than he might have liked. He took up the profession last year with the aim of achieving “specific financial goals” for his family.
“I think out of 18 people on my real estate course in May last year, only two of us are still selling.”
MacDonald started with Bayleys, then switched companies to train under Mary Burke for six weeks and took over “farming” her Atawhai patch. He says he “lost it for a bit” after the death of his sister and he decided to switch to Ray White Richmond after the Nelson office merged with Century 21. “I just wasn’t sure what was going to happen.”
MacDonald was forced to surrender his three listings and told he could expect to lose up to 30 percent of his business switching offices. He says he has made some sales and is keen to stick with his plans in the meantime, believing it takes time to build up the profile and reputation needed to be successful in the industry. “Give me another year or two to see whether I’m suited to it,” he says, while noting, “you can’t force an economy”.
Back in Richmond, Brent Palmer says he didn’t deliberately set out to become part of the industry. It “just happened” after he and his family returned to Nelson from 12 years overseas, where he had worked in various management and consultancy roles.
“I did a real estate course because I was looking at investment.”
The course consisted of six half-day classes, a few assignments and a practical exam. That’s all he needed to do to enter the industry. Palmer says that’s set to change and he’s all for seeing the levels raised.
“I think, as a new agent, you don’t know what you’re doing. You’re way under-qualified for dealing with people’s biggest asset.”
He chose to further his education by doing his AREINZ papers, which took about two years to complete. It cost him about $8000 and is one of the highest real estate qualifications available, allowing him to become an agency principal.
But Palmer says he still gets his share of business and is content just doing what he’s doing for now.
“I really do love it, but I certainly wouldn’t do it if I couldn’t make a decent living.”
Karen Goodger – 26/07/2008 – Nelson Mail
http://www.stuff.co.nz/nelson-mail/features/weekend/550577/Looking-for-the-next-sale
TIME OUT: Richmond-Waimea Men’s Shed members Allan Brown, Fred Stade, Ray Deadman and Alan Kissell at their new home, the former kennel association rooms at Richmond Park.
