Real estate agents are offering free prizes to vendors to try and stimulate the property market in 2016.
The prizes and incentives range from lottery prizes for new cars and cash, discounted commission rates and free marketing.
Examples of prizes being offered by agents include entry to a $20,000 lottery draw, a new Audi Q3 car lottery draw, free iPhones and frequent flyer points.
Propertybuyers.com chief executive told Domain it will be interesting to watch how real estate agents try to get more listings this year.
“They’ll use a huge variety of tricks to get the competitive edge for people to list with them,” he said.
Agent are especially trying to offer big incentives very early in the year, in the period leading up to around mid-February, when the market is expected to really get going again.
According to Domain, real estate company LJ Hooker are actually cold-calling prospective clients offering them lottery and frequent flyer incentives to list with them.
Christopher Mourd from LJ Hooker spoke to Domain.
“It’s about giving clients an additional benefit, not necessarily something to incentivise people to list with us,” he said. “It’s just about additional awareness, more of a value add.”
Marketing manager Mitchell Farah also spoke to Domain and also pushed the line the prizes were more about giving to clients than to draw more listings.
“There would be a couple of people who might find it a point of difference, but more for our clients’ benefit, something exciting for them when they’re going through the selling process,” he said.
Another popular way agents are attracting listings is to cut their commissions, some have been doing so to as low as 1 per cent and throwing in free marketing as well.
Stuart Jones from Rose & Jones warned vendors to be careful of these free offers.
“Some of the best agents in the business won’t renegotiate their rates,” he told Domain.
“So it can be a false economy to go for an agent who might be a lot cheaper, but who might get you only $1.8 million for your home, when the best agent charging another 1 per cent might get you $2.1 million.”
While there is plenty of uncertainty over the property market in the coming year and some agents are keen to throw in incentives to get business going, there are plenty of agents who remain optimistic about the market and are staying away from free prize campaigns.
Simon Exleton from McGrath Estate Agents shared his bullish market view with Domain.
“Supply is short now but more will come on traditionally around Australia Day,” he said.
“And when people see property selling and good sales results, even more will be putting their properties on the market.”