Jim’s Real Estate threw in a garden clean-up and building report for its first residential sale, as part of the new franchise’s effort to muscle into an already crowded and competitive market.
Franchisee Peter Raja paid the local Jim’s businesses for the tidy and building inspection in the run-up to the $480,000 sale last week of the two-bedroom unit in Melbourne’s Heidelberg West.
It didn’t break the bank. Mr Raja paid Jim’s Building Inspections $330 for the building report – about half of the normal price – and a similar discount from Jim’s Property Maintenance, both of which he’ll cover with his 2 per cent commission. It was easy to organise and also an obvious network to tap to publicise his new service, he said.
“I want to be able offer a value-add to the client that no-one else does,” Mr Raja said. “That is the drawcard, that carrot that would potentially entice sellers that have an affiliation with the Jim’s branding.”
Falling real estate values in the country’s two largest cities make it a tough time for the newest addition to the branded franchise empire that started with lawnmowing in 1982 to try to break into a new market. The 0.2 per cent price fall in Jim’s home market of Melbourne in March deepened in April, CoreLogic figures to be released on Tuesday will likely show. Sydney home values, which gave up 2.1 per cent in the year to March, are also likely to decline further.
The number of real estate agents in Australia has grown quickly as low interest rates have pushed prices higher across the country’s eastern seaboard. The growing competition has pitted established players against newcomers such as fixed-fee agency Purplebricks. And the need to differentiate has driven novel approaches such as this.
But Jim’s Real Estate co-founder Trish Mewett says the range of services within the Jim’s network give it an advantage in offering property management services, which provide revenue in a slower sales market.
“If you look at it as a whole, in a market where one is slow and one picking up, you can switch between those areas of our business,” Ms Mewett said.
“When we start to look at property management, we definitely have that opportunity to draw on other services from within the Jim’s network.”
Jim’s Real Estate will get its property management business model working and then expand to NSW, which Ms Mewett said would happen before the end of this year.
For now, however, the slowdown is, perhaps ironically, prompting more people to list their homes for sale. Home listings jumped 6.3 per cent in March as owners, especially in Melbourne and Sydney, put their homes up for sale ahead of an expected fall in prices, SQM Research figures show. “Vendors’ expectations have become more bearish and so a number of them who were considering on-selling at the top of the market have decided that … they’d better sell if they want to time their sale to the cycle,” SQM managing director Louis Christopher said this month.
At another house he’s marketing in the outer eastern suburb of Croydon, Mr Raja used the local Jim’s Lawnmowing and Jim’s Cleaning to prepare the dwelling for open inspections.
“It’s important to provide consumers with opportunities that provide them with value-added services,” he said. “That’s a big point of difference in the marketplace at the moment.”
Extra benefits, it seems, are more important than the brand of the agency. Mr Raja said no-one commented on his new franchise during the campaign for the Heidelberg West unit.
“No-one mentioned Jim’s Real Estate,” he said. “Consumers don’t really care who puts the property online as long as they have access to that stock.”
By Michael Bleby
Published in the Australian Financial Review