In boom times almost anyone will do, properties will pretty much sell themselves. During a bust no agent will be any good. It is every other time where the value of your agent comes into play, especially at the fringes of a changing market. They can be instrumental in launching your development in the early stages of a rising market or completing those final sales that deliver you a profit during the flattening inevitable before a downturn.
Developers in small scale house and land developments typically engage the services of a professional real estate agency. Some smaller agencies will have agents that primarily deal with new subdivisions. Larger agencies often have dedicated project marketing teams focusing exclusively on new subdivision projects.
Experienced developers with a pipeline of projects often bring real estate sales people in-house. The reasons for in-housing agency is to reduce total commission payable and have more control over the selling process. The individual agent may end up getting the same per property commission, but there will be no agent head office brokerage fee payable which ranges from 30–50% of total commission. Control is about brand exposure, brand protection and marketing consistency — elements more important for large developers and large projects.
I advocate to maximise profitability, focus on generating the highest income rather than shortcutting sales costs. At least for your first few projects you should use a professional real estate agency and harness their experience, exposure and branding to sell down your development. If are a real estate agent come developer then don’t underestimate everything else you have to do besides selling, and go hire someone else to do the selling.
Andrew Crosby
+64 21 982 444
andrew@xpectproperty.com
