RiotACT business profile # 4 – Elders Real Estate Belconnen

johnboy 7 June 2010 27

This is Penny Hyde and Troy Reddick from Elders Real Estate Belconnen.

And this is the outside of their office in Jamison.

Last Sunday we had a chat about what’s involved in running a real-estate business in the ACT. The audio of the interview is available for those of you who want the whole story (and the dulcet tones of a maltese terrier woofing).

We started with Troy making the point that real estate is an unusual business in that they start a business with nothing to sell. They don’t really sell houses, they sell their services to people who want to sell or rent houses. Troy estimates that most people who form a low opinion of real estate agents are disgruntled buyers or renters who don’t realise that the agent is working for the person who owns the property, not for them.

They were positively glowing about the industry reforms of 2004. Aside from driving shonks out of the industry it has also made life much more difficult/complicated for property owners trying to sell their own property, effectively bringing more business in for the agents still in the industry. However, while happy with the regulations they aren’t keen on the idea of dobbing in other agents they suspect of being in breach of them, preferring to let matters take their course.

The flipside of the regulatory burden is that it costs them roughly $20,000 to train a new agent before they can be unleashed on the public, which when you consider very few new agents make it to a second year in the industry (just 15%), is a major cost for their employers. Fortunately in a commission only business there aren’t any salaries to pay for new agents who aren’t bringing in business. Elders Belconnen hope that with their training and selection regime they can get the attrition rate down to 50%.

Mystery visitors being tricky for the real estate market customer service quality is monitored through surveys which they get a 50% return rate on.

Amongst the current caterwauling over land tax and stamp duty there was an agreement that supply and demand is the ultimate arbiter of price, rather than the individual components. Removing taxes will be good for vendors and real estate agents, but not necessarily make a jot of difference to the price of a house.

Troy also stressed that in this era of low inflation it’s a mistake to think that house prices must always rise and cannot go down. At the moment they find many older investors are getting out of property to take advantage of the new tax treatment of superannuation, not to mention to stellar returns on the red hot stock exchange.

The hours of a real estate agent are not the best part of the job. Saturday and Sunday are the busiest of the week and clients often like to get visited after hours. While the working hours will vary from 40-60 a week it takes an act of will to get a whole day off along the way. Meanwhile 10% of the agents in Canberra are raking in 90% of the money leaving the others to scrape by.

On the subject of allhomes they agreed that it is the undisputed king of ACT real estate websites, but because it is so local it misses out on the interstate buyers who make up a huge part of the market. They estimated marketing the average property would cost as much as $1,000 of the vendor’s money.

Word of mouth and “Sold” stickers are considered to be the best possible marketing methods when trying to convince people to sell through Elders.

Troy loves having the office in Jamison for all that the expanding agency is facing some office space challenges at the current location.

We briefly discussed rental auctions. Troy and Penny expressed an understanding of why some lessors would want to maximise the return, but also noted the risks of getting in a tenant who might be able to pay the highest price (for a while) but not be the best tenant for the long term.

For those of us hoping the units going up all over town will drive prices down there’s bad news, more people living alone are more than making up for that growth and with developers not starting to build until half the units are sold off the plan there’s little chance of a glut to drive down housing costs.

* RiotACT receives no inducements or considerations to produce business profiles (Disclosure: Penny is the better half of RiotACT’s Jazz). If there’s a local business you’d like to know more about email business@the-riotact.com with their details and why you think they’re interesting.

The feed for podcatching the audio of this and future Business Profiles (~30mins) is http://the-riotact.com/wp-rss2.php?cat=46


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27 Responses to RiotACT business profile # 4 – Elders Real Estate Belconnen
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I-filed I-filed 12:43 pm 26 Jan 07

That’s ok Jazz, but as you know, you have to read an article to know what it’s about – and with the advent of advertising on the board, I stand by my concern in the general! 🙂

Jazz Jazz 8:04 am 26 Jan 07

Thanks for your feedback I-filed, however you should know that Johnboy and I approached Elders with the intent of conducting this piece, not the other way around.

The point of this business series is to give punters like you a bit of an insight into what its like to own or operate a small business in Canberra. That it gives the participants an opportunity to promote their business through RiotACT we think is fair consideration for the time offered to us to conduct them, and is true to our goals of supporting our local community. If that article turns out to be a two edged sword, well that is the very nature of RiotACT as well.

Dont like the articles? Then by all means dont read them.

I-filed I-filed 7:06 am 26 Jan 07

Any way of moderating this thread RiotAct, once the agents go into a PR frenzy here? And in any case, is this gone-awry advertorial a harbinger of product placement to come? Personally I’d rather you kept the ads to boxes off to one side. Once the PR harpies decide the RiotAct is a suitable propaganda vehicle, readers with smarts will have to go elsewhere…and that would be the end of a really good thing!

Jazz Jazz 9:15 am 25 Jan 07

luca, in case you missed it, Penny is not Jazz. she was just using my account

luca luca 9:29 pm 24 Jan 07

Thanks Jazz. Yes, that was my understanding when I last looked at the legislation.

I could have checked before asking but my PC is so slow thanks to johnboys extremely large photos that I didn’t want to mess about.

In my opinion this is a flaw in the legislation.

I once raised it with the REI and, from memory, it didn’t seem to share my concerns (I think my concerns are obvious).

But good for you for (a) knowing the answer and (b)answering the question!

Jazz Jazz 9:01 pm 24 Jan 07

Sorry about that – ducking and weaving was not the intention. An agent does not have to have a copy of the building reports available at the property that is for sale. However they are required by law to have a copy of the contract, and as part of that, the building reports, available at the agent’s place of business for potential purchasers to look at.

(From memory Section 89 of the Agents Act – but don’t quote me on that!)

Penny

luca luca 8:33 pm 24 Jan 07

Thanks, Jazz, but it seems to me you sort of weaved and ducked a bit. Does the relevant sale of land legislation say the agent MUST have a building report with him/her at the premises for sale and must produce it if asked?

Jazz Jazz 7:35 pm 24 Jan 07

Hi Luca
It’s Penny here.
Before an agent can market a home for sale they are required by law to have a contract of sale for the property. The contract includes a number of reports, building reports being one of them. It is not the responsibility of the vendor to have a report available unless they are selling privately. All good agents should have numerous copies available for potential purchasers at all times. We are bound legally, and morally I might add, to work in the best interests of the client – by not having reports available, in my opinion, would be against the rules of conduct for an agent

luca luca 7:01 pm 24 Jan 07

Troy/Penny, pleased to meet you.

A question, please. Is it the law that agents must have a building report with them when selling a dwelling or is it that the vendor must be able to produce the report?

I’ve inspected some tatty homes (and, yes, there are some in the ACT) and when I asked for the building report the agent tends to gigle “Oh silly me, I forgot it but if you want to call into the Office…”.

I’m just a tad suspicious.

Thanks

Heavs Heavs 5:14 pm 24 Jan 07

In my experience, Elders Jamison is definitely one of the better agencies for renting. Ben Hall was always a complete gentleman who was totally by the book. They are very rarely complained about in general.

Barbara Costa on the other hand. Second worst agent ever. The worst was Ada Marchant from the dodgy real estate (Salease i think) in Aranda. Made Bonfire’s agent look like a model one. Too many stories for these pages though …

CouldExpire CouldExpire 5:10 pm 24 Jan 07

I met a rotten one once too… Gary somebody-or-other.
Thought he could just pop by at least once a week and let himself in regardless of if my flatmate were in or not and for the silliest reasons more often than not!

GRRRR! overbearing twit!

ns ns 5:03 pm 24 Jan 07

Troy is great. I’ve never rented through Elders or bought through them, but I was on the house-hunting circuit for over two years (with almost a year’s hiatus in the middle). I got to know some of the familiar faces pretty well. In my opinion Troy’s one of the best in Canberra (especially if you’re selling I imagine).

I met some real horror stories too and if I ever get enough time I’m going to start a blog about nasty Canberra real estate agents.

Danman Danman 4:59 pm 24 Jan 07

Jazz – Email me RE DSLR lessons again i lost(read deleted) your email – bac from Vic – plenty of time to spare now 🙂

Jazz Jazz 4:07 pm 24 Jan 07

interesting Jill. we had them manage one of our porperties and have no complaints at all. that was before penny worked there & was one of the contributing factors in accepting a position with the team

jill jill 4:02 pm 24 Jan 07

Worst property manager ever Terese from Elders Belconnen totally unprofessional. Like most who rent at some stage I am now an owner and I would never choose an agency that had been unprofessional to handle the rental of one of my properties!

Special G Special G 3:55 pm 24 Jan 07

AFter hearing many stories of people renting through agents on both sides we manage our properties ourselves. As a result we get no problems with tenants and fix any problems with the unit straight away. The price agents charge for the service they provide is ridiculous.

Nik_the_Pig Nik_the_Pig 3:43 pm 24 Jan 07

I have bought two properties from Elders (both sold by Marg Hall who I belive is now retired) and chose to rent them through Elders as well. In the last 6 years I’ve had no problems at all with them. Having helped manage properties before I found the small cost of using an agent far outwieghed the potentual hassle of fixing blocked toilets in the middle of the night. Having also been a renter for a large part of my life I truely prefer renting through a agent over a owner. Although some owners are gold (fix everything, slightly lower rent, bring beer, etc, etc,) you are living in their baby and they can tend to get a little overbearing.

As for Elders Jamo, I’ve heard other agents mention that Troy is the go to guy when buying/selling in that part of Belco.

Ari Ari 3:38 pm 24 Jan 07

That’s a pity, Bonfire, I’d even thought of a title – Softhead

Jazz Jazz 3:37 pm 24 Jan 07

bonfire, i think you will find in any business you occaisionally get crap service and people who arent interested in providing it. bit rough to still hold it against the business when those people have been asked ot move on.

RandomGit RandomGit 3:30 pm 24 Jan 07

You’d be surprised how much power you would have had in the ‘cleaning’ argument bonfire. Wether you’d win or not at arbitration is merely a question of wether you are prepared to wait for your bond or not, ie. while said arbitration runs it’s inevitable course.

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