ROB MAETZIG

Ian Gundesen vividly remembers the time he was invited to speak to the Taranaki Property Investors Association.

“I thought they’d be all schooled up on buying and selling houses – after all, most of them owned quite a number of properties,” the veteran New Plymouth real estate agent recalls.

“But they weren’t. There were about 60 at the meeting, and instead of spending half an hour talking to them, I was still there an hour and a half later. It surprised me how little they knew.

“Then the thought struck me – if the property investors didn’t know much, then lots of average home owners wouldn’t know much either.”

And then something else happened. A person at the meeting knew of a couple who had listed their property with a real estate company for $695,000 after negotiating a commission fee of $12,000.

The couple weren’t getting any bites, so the man recommended they try Ian Gundesen.

Gundesen had a full meeting with the couple, and they agreed to let him market their property for a price negotiable over $590,000, and in return he would receive the full standard commission of 4 per cent plus GST.

Within 10 days of the property being listed, it sold for $650,000.

All these events combined to start Gundesen thinking: that when it comes to knowledge about buying and selling properties, the average punter has a lot to learn.

So the Harcourts agent, known as Gundy to one and all, wrote a little book.

Called Knowledge Is Power, the 60-page publication promotes itself as offering “what every seller/ buyer and real estate agent should know”.

Gundesen has self-published 600 copies, and said demand has been so strong he might need to do another print run. But he’s happy for this to happen, he says, because there are so many misconceptions, myths and mistakes surrounding real estate that something needs to be done.

So what are some of these misconceptions and mistakes?

A very common early error is for a vendor to simply telephone a real estate office and ask to be put through to an agent, Gundesen said. That action can potentially cost thousands of dollars.

“That’s because in most real estate offices it’s the new agents who are required to do what’s called duty time, and they are the people who the receptionists will put the vendor through to. But the new agents might be very inexperienced.

“The much better way to go is to do your homework. Find out which agents are making the sales, then phone the real estate agent and ask for the agent by name,” he said.

Internationally – and in Taranaki as well – just 20 per cent of real estate agents make 80 per cent of the sales, Gundesen said. This proves that there is no substitute for experience.

A second common mistake is price, he said.

Most vendors have an emotional attachment to their properties and this, plus a comparison of their house to open home fliers from other properties, will often form the basis of their estimations of the worth of their properties. But this can often be badly wrong, Gundesen said.

Yet there are agents who will agree with these estimations simply so they can get the listing – but often, after weeks of open homes, marketing and visits from prospective buyers, the properties will still be for sale.

“It doesn’t matter how good the marketing is, if the price is not right you’ll be wasting your time and someone else’s money,” he said. “The one thing that sells property anywhere, any time, in any condition, in any market, is price.”

A further misconception is that real estate agents don’t have to work hard for their commission, which many consider to be over the top anyway.

Every day, agents and their companies are challenged regarding their fees, Gundesen said. But he answers that with a simple question: If you needed brain surgery, would you employ a surgeon who agreed to do the job at a discounted rate?

“Some vendors place more emphasis on reducing the agent’s fee than they do on the amount of money that goes into their bank account,” he said.

“Would you work for less than you are worth? Agents work during the day, late at night and on the weekends to sell a house.

“This involves market research, phone calls, open homes, letterbox drops, advertising and communicating with the clients the whole way through the process.”

And anyway, real estate agents don’t earn as much as the commission suggests, Gundesen said.

“If a house sells for $300,000, the commission is $12,000. Half of that goes to the real estate company, which leaves $6000 for the seller and lister. The general rule is that 60 per cent goes to the person who listed the property, with the remaining 40 per cent going to the seller.

“So if the person who sold the house is not the same person who listed it, the seller gets $2400. Then they’ve got to pay tax on that. So not all real estate agents drive around in flash cars, you know.”

Gundesen, formerly a dairy farmer, has been in real estate for 30 years. He says he has loved every minute of the experience, and claims he wouldn’t have lasted in the industry if it weren’t for honesty.

“I suppose the general feeling is that somehow people in real estate aren’t honest people. But the reality is that if you want to be a good agent in a small place such as Taranaki, you need to be honest. That’s how I’ve always operated,” he said.

– Taranaki Daily News