Just because it can be sold doesn’t mean it is the best seller. Having plenty of stock doesn’t guarantee that it can be sold… It’s easy to be an agent, is it right?
Real estate agents may be viewed as a popular career that attracts many people to try and learn. Also, it can offer a new experience of earning money either independently or in a full-time job due to the “belief” in the story that has already become a myth. For example, doing without investment. You don’t have to stock the products but you can sell them and you will get 3% of commission. You also have a flexible timetable and have plenty of time to do additional work as a second career. You only sell three – four units and then you can set yourself free from a full- time job and new technology nowadays makes it easier to sell. You just stay at home, copy files from the internet to continue posting, wait for customers to contact, period. There is plenty of stock ready to sell. can be sold, etc.
If we go back to 10 years ago, such a story might not be exaggerated. At that time, it was the time when the Thai real estate market, especially the City Condo group, was in a new peak period. As a result, many development agents were born. They were to create a trend to pump up the price for the resale condo market under its own brand to buy and sell to make profits in the short term and use the profit that has been bought repeatedly to extend the Customer LifeTime Value to other new projects endlessly.
I still remember that at that time, being a development agent’s salesperson was a career that many people wanted to do more than selling the Off Plan unit of the project.
Because the commission rate is quite high, around 3%. Basically, if they can , it can be 30,000 baht, even if it is a company’s income, the salesperson has to earn money both from salary and the commission, about 10 – 30% of the total commissions entered by the company. (Three thousand baht per million), which is a figure that is 3 times higher than the commission received by the project sale! Of course, the benefits would inevitably create a conflict between the project salesperson and the agent.
They secretly sell the units themselves, refuse to send consignment to resale and forward it to customers, etc. As a result, all companies have to issue a Loyalty Program package like an idiom, Scratch my back and I will scratch yours, by giving referral fees to project cells at the rate of 1,000 – 2,000 baht per million. If they can close the deal from customers sent from Stock. There are many times that the same stock has closed the deal repeatedly, up to 3-4 times. The owner and the buyer don’t have to sit and open the Listing and look on the website. They don’t waste their time on these issues. It reflects the incomparable invincibility of the developer agent market in a way that can’t be compared…but that was almost 10 years ago. How about today? Please read it in the next paragraph.
While the majority of people are in the same voice that today’s cutting-edge technology has a positive effect on the work of the agent. In terms of finding stock, finding customers, and marketing to create their own distribution channel and distribute the listing to other online channels to reach more customers. But due to our own domestic factors such as the lack of MLS (Multiple Listing Services), which is the central trading database of real estate through brokerages which facilitates the creation of real-time data and the Co-Broker Split brokerage system. No restrictions on the career of a broker, no license required and no applicable Standard Commission Fee, instead, it plays a very important role in creating huge brokerage demand among Thai people and foreigners who’d prefer to live in Thailand than finding demand from customers who want to buy or rent.
It is expected that if you count the number of brokers from both companies and all independent brokers in Thailand, there will be hundreds of thousands of people working in this occupation assessed by professional standards from the Institute of Professional Qualifications, just over three thousand. On the other hand, Singapore requires the presence of a broker with a CEA license in every real estate purchase-sale-rental transaction, with the number of brokers receiving CEA licenses reaching 30,399 in 2021.
Another factor that has brought developer’s agency down more than ever in the past 3-4 years is the end of the golden age of the condo resale market. In the past, it used to be very rich from the fact that there were only a few good stocks of projects or it was difficult to access. There weren’t also many investors in the pre-transfer resale market. There will be only a limited area. The number of demand is greater than the supply. There are no foreign investors and new speculators or Big Lot Investors who buy and sell in volume that can control the market price mechanism.
In addition, most developers compete to build a large number of projects to accommodate foreign demand that is likely to replace the purchasing power of Thais in the long run and support new routes for skytrain, causing a lack of purchasing power in the country. The first-hand units are still left. How will the resale be sold? Except for having a cheaper price… When this happens, the pre-transfer resale market that used to be a piece of cake for many people has turned into a devil of a job which can’t be sold.
Even though the owners of the units have reduced costs, the prices are still more expensive than the project units that are currently being sold. When you can’t sell a resale unit in hand, most people don’t want to spend extra money on a new investment. Plus, the buyer doesn’t have the money to pay a million down payment. It’s not like buying a unit in some projects that pay only thousands to move in. Plus, get various promotions for free … This situation has been looping back and forth until it has reached a critical stage for two years. From both government measures to limit purchasing power for investment and the epidemic economy, the solution for most developers agents is to take the first-hand project units and sell them. Of course, since the project cell already exists. Marketing has already been done. The website page is already accepting customers.
Why would you have to share a unit and sell it with a higher commission? Being a developer agent is even worse than a Sole Agent because the more you resell the final project unit, the more the customer database will belong to the developer who accepts the transfer anyway. An excuse for a larger and unique customer base seems to be a story that doesn’t make sense at all.
When many agents have faced with this kind of question, they (who do not have a network to sell International Overseas (which earns a higher commission), therefore, choose to accept the final offer. And there is no unit to divide the floor to be sold as Exclusive. Also, they have to pay a commission equal to the rate of the project sale where agents have to spend money on marketing and finding clients themselves.
In my point of view, it is like a time bomb waiting for the day to explode because of the income structure and it’s expenses come from agent business commissions at thirty thousand per million, not thousand per a million. In addition, according to the marketing plan, of course, to promote the first-class unit, most customers choose to contact the developer themselves or walk in to the project more. The result is a developer agent who doesn’t adapt and balance the risk, focus on the same customers of presales and resell before the transfer, no portfolio adjustments for both Stock & Inquiry, no organizational restructuring and business strategy. It’s even more difficult for them.
In terms of developers, it must be admitted that it is the time to save costs as much as possible. Sales teams were reduced and rotated as many sites as possible to match incoming leads. More cost-saving sales alternatives were implemented both in terms of selling through online channels and reducing the number of regular sales staff, using brokers who don’t charge Retaining Fee, using Referral Fee strategies, as well as creating a network of independent brokers. By taking the gap from having a group of personnel in hotel business and tourism which had to lose a lot of jobs. It seems to be a better answer than using an agent if it is measured in terms of creating awareness to a new group of clients that may not be available to general agents.
ออริจิ้น พร็อพเพอร์ตี้ ติดปีกให้กับอดีตแอร์โฮสเตทและสจ๊วตที่ได้รับผลกระทบจากสถานการณ์ COVID-19 และอยากผันตัวเองมาเป็นนักขายมืออาชีพ ร่วมเป็นส่วนหนึ่งในครอบครัวออริจิ้น ให้โอกาสตัวเองสู่อาชีพใหม่ในตำแหน่ง PROPERTY AMBASSADOR
What reflects a difficult time in running a business of the developer group is to focus only on the pre-sales of new projects and it should be the performance of each company itself. If we look at the infographic below, we will find out that almost all companies have a decrease in total revenue from 2019 with agents growing against the trend. Most will have a variety of business guidelines rather than focusing on selling presale units alone. Plus Property seems to be very strong in the corporate management group and received a good benefit from the heavy price reduction of the ready-to-move project from Sansiri last year (Plus Property in charge of selling both first-hand units and resale units) or Primo Realtor from Origin which earn a total income around 52 million in 2020 with a profit of 28 million baht. It is not probably from doing just Resale Transactions.