Chris Hanley owns and runs an extremely successful First National real estate office in northern New South Wales’ Byron Bay. Unlike many in the industry, his business has been thriving in recent times despite challenging market conditions.In 2008 total property transactions in his area were literally halved. During the same period Chris’ business increased its market share by a phenomenal 50%. On top of this remarkable overall growth, the office boasts a low days-on-market average as well as a high average commission.
In talking with him it’s not hard to understand why.
Chris is an intelligent man not limited by tradition. He has the knack of being able to take an accepted common practice in real estate, question the very fundamentals of the concept, and then find a radically different solution. The way in which he has built and utilised databases illustrates his innovative approach - effective database content and management have become key drivers of his office’s success today.
Many agents talk about the importance of their databases and how they work them to sell properties. It’s become a catchphrase for vendors in listing presentations. But when Chris put the whole concept of databases under the microscope, most of the databases he saw were based on quantity of contacts, not quality. Consequently, they had limited effectiveness.
“Most of the names on agent databases are not really likely buyers at all. People do not usually stay in the active buying stage for very long so it’s hard to really make a buyer database effective. Even when a buyer database is relatively clean, often the material that gets sent out is mostly propaganda about the office or the agent and their achievements” Chris said.
“I felt instinctively that this is not what customers were looking for.”
Five years ago on a plane flight 20,000 feet in the air Chris had his eureka moment; he would build a database of property owners instead of buyers. He realised targeting potential vendors could be a more logical approach, given they are the originators and eventual decider of the property transaction, as well as the party who pays the agent’s fees.
Once he had built the database, he decided he would use it to provide owners with free factual, objective and clean information. His intention was to develop a trust relationship with them before they were even at the listing stage.
Next he set about making the whole thing happen.
After four years of working on the database it now comprises 75% of his marketplace, an impressive feat in itself considering more than half of the property owners in the area live somewhere else. But gathering the right contacts for the database was only half of the story - Chris says the other big difference is in what he did with them.
“We send 20 automated documents every year to every one of our property owners. It’s a mix of general and specific information, but all of it is useful. We don’t send any self promotion at all, it’s just a turn-off” Chris said.
Whatever his competitors might have thought of his approach, the proof is in the pudding. Not only has Chris experienced an impressive 50% growth in market share in the past year, his agents have to do less “selling” to get listings than ever before. In seven out of ten listing presentations his office is the only one in the running. 82% of his total office listings now come straight from the database and over 80% of actual sales are from the database as well.
In addition, days on market for the business are half that of the average of competitors in the area. Chris says this is partly because his vendors are more realistic with their price expectations due to the quality of the information he has provided them with prior to listing.
He also invests heavily in external training for the sales team as well as ensuring they’re motivated. Chris says teaming these two factors with educated and trusting vendors are the key ingredients of his success.
Perhaps most interestingly, vendors are happy to pay a premium for what Chris is offering - his average commission is amongst the highest of any real estate business in the country.
“There are a whole host of benefits when there’s trust between us and the vendors on our database and we’ve taken the time to educate them - we have to do less price adjustment, we sell properties quicker for better prices and we rarely have to discount our fees. It works better for everyone.”
“I don’t believe technology is the answer to running a better business; it’s just a tool to make processes easier. Real estate is about relationships and people and it always has been.
f you really want to be successful, it’s actually quite simple; you need to build trust by getting belly to belly with your customers and telling them the truth.”
