Grant: New research from the Real Estate Institute of New Zealand has found that more than half – in fact, 51% – of real estate agents surveyed across the country state they have invested in using drone footage to help market their properties, among other high tech tools.
With me is marketing expert Vaughn Davis. Are you impressed by that drone stat?
Full Audio Interview (transcription below):
Vaughn Davis: I am impressed, Grant. And I was surprised because it’s been a while since I bought or sold a house. But yeah, turns out it’s widespread, and the investment in the level of production values in real estate videos has just blown my mind.
Grant: Well, of course, the next level, too, is VR, virtual reality, where you can go to an open home without leaving the comfort of your armchair.
Vaughn Davis: Yeah. I thought that that would be a little bit more popular than it is. Because I thought the idea of seeing inside a house would be a bit more compelling than seeing what a bird might see from 100 feet. But yeah, turns out that the drone is king. But looking into some of these videos that are out there, they’re little movies.
I was looking at one just now, and it featured an entirely made up family starring in this little movie about a house. We used to home stage with a nice couch and a Dick Frizzell print. And now it seems we, in some cases, roll in a Chinese-looking family and use that as a way of marketing our house. It’s impressive stuff.
Grant: When we say, “Over half the real estate agents are using it,” therefore, can you not flip it on its head and say, “Is it not surprising that half aren’t?”
Vaughn Davis: Well, I mean, there’s a cost there, and this is at the premium end of the market.
And drone footage or video walkthrough is the sort of add-on that someone with $1 million house to sell in Auckland would be happy to pay a couple of thousand dollars for, whereas someone with a $200,000 house in Taihape might not be so into.
So I’m not surprised there would be people for whom it’s not worth the investment.
Grant: But I guess you wouldn’t be doing your job now if you weren’t covering all of the social media when you’re selling a house as an agent?
Vaughn Davis: Well, social media is an important gem. And I was surprised in that report, also, that the use of paid social media was lower than I thought it would be. Something like 39% are using paid social media advertising.
When you consider the cost of entry to that is 10 bucks, and you’re getting to 1,000 people, I’m surprised more people aren’t using that.
Grant: Do you believe that when you have that sort of technology, you sell your house quicker?
Vaughn Davis: I think in the early days when only 1 in 10 people was using it, or home staging, or whatever, it would give you an edge.
Now it’s just become table stakes. If every premium house in Auckland, Wellington, Christchurch is using that technology, then it’s hard to see how it would give you an edge. I see how you’d need it to keep up. You need it to keep up.
Grant: Because that survey found that 43% of agents are considering virtual reality and 36 augmented reality. And a handful are already using it as we know. Should they perhaps sort themselves out with the basics, like smartphone apps, before they get into those other areas?
Vaughn Davis: Oh, I think absolutely. I mean, there’s things baked right into Facebook, for example, that cost you nothing to use. If you’ve got a phone, it’s there for you to do, like a Facebook Live video, for example.
You can take people on tour through the house as you narrate it. Have your colleague hold up the phone. You can take questions as people come and go. It’s a virtual open home if you choose to do it. Costs you nothing. 360 video on Facebook costs you nothing.
It’s built right in there. So before getting into things that people are not using quite so much, such as augmented and virtual reality, use the tools that are already there.
Grant: Regarding private sales, if you’re a tech-savvy person, you could probably do all that without even having an agent, couldn’t you?
Vaughn Davis: Yeah, you absolutely could. And if it’s just a question of social media reach, a lot of people are going to do a better job of that than agents might, necessarily. So I can see how it is in so many ways an incumbent sector is under threat from democratised technology.
Grant: Don’t they have to be very careful of disruptive technology that someone doesn’t come in and cut out the agent?
Vaughn Davis: Oh, absolutely. And that’s been the trend for the last 20 years in New Zealand. You saw it first with Trade Me as a platform, and now with direct access to media channels. It used to be that to advertise something, advertise a house, you’d need to book a space in the newspaper.
In recent memory, those Saturday newspapers, I felt like they were six inches thick. Pick up a Saturday newspaper now. Times have changed.
I can access people who might want to buy my house directly via Facebook, or Twitter, or Instagram, or whatever, and I don’t necessarily need an agent to do that. I mean, I might need an agent for lots of other things, but the marketing side of it, don’t know.
Grant: Is it getting to the point, though, where there’s so much add-on available, it’s very difficult for the person trying to sell a home to cut their way through it? Well, I can give you Facebook for $300. I can give you Trade Me for $400, $500.
Then we’ve got the drone. That’s another $200. I mean, how far should you go? Or say, “Enough is enough?” And to that point, how much should you spend on your marketing when you sell a house?
Vaughn Davis: Well, I mean, that’s not something that I’m deeply versed in, but I do know when people are doing the maths and they’re going, “Well, it’s a $1 million house.” The average house is coming close to $1 million in Auckland. It’s very easy to justify, particularly in a tightening market.
It’s really easy to justify 2, 3, 4 thousand dollars if that’s going to give you that edge and make your house sell faster. So you can see why the agents are serving this up as the pay-per-play menu in their services. That’s an easy thing to say yes to as a home seller.
Grant: Well, I guess the agents have got nothing to lose because they’re not the ones paying for it?
Vaughn Davis: Absolutely, they’re not. Although, a lot of them, they’ll make this marketing fee contingent, or reasonably contingent, on sales. So if you do sell, the 2, 3 thousand dollars you pay will fall back into the commission anyway.
It seems like a zero-cost proposition. But of course, it’s absorbed in that commission anyway.
Grant: So what’s next, then?
Vaughn Davis: I think the videos that I’ll be looking at, it’s taking more of a storytelling approach, which is common to a lot of areas of advertising and marketing. So it’s not enough to show an empty house with some trinkets.
You show the type of family you are trying to attract, living their lives in that house. And if that’s not you, you get some actors in to do it. You home stage your video with people, which is a fascinating development.
Source: NBR Radio
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