We take a look at the meteoric rise of this prestige real estate brand
In September 2012, Michael Pallier and James McCowan launched the Sydney Sotheby’s International Realty brand back into the Australian market. Starting with just two PAs and a single office, their operation has grown exponentially. Today, they operate six offices with another set to open, sold over a billion dollars worth of property in 2016 alone and have set 30 suburb records. Here are their unique operational and brand tactics.
Real estate agents Michael Pallier and James McCowan have worked together on and off over the last 20 years, including at McGrath Estate Agents and Raine & Horne. In 2012, the opportunity to pitch for the Sotheby’s International Realty franchise arose, the brand had been out of the Australian market for several years. The duo recognised the enormity of this opportunity and so Michael jumped on a plane to New York beating out the competition. They secured a 50-year franchise agreement for NSW and the ACT with parent company Realogy.
In four years they have expanded quickly and strategically, opening a second Double Bay office, as well as Mosman, Gordon, Barangaroo, Surry Hills and shortly Sydney’s CBD.
“We are doing a billion a year in sales,” Michael says. “We’ve got plenty of room to grow and grow but we still want to keep it exclusive, rather than have an office on every street corner. You have to be very careful not to tarnish the image of the brand.”
They have learnt an important lesson watching other premium real estate brands expand too quickly, to the point where they have lost brand prestige and corporate culture. With 25 sales agents and more on the way, the challenge is not attracting agents, “we have the opposite problem where we are trying to pick the right people,” Michael explains.
Within the Sotheby’s International Realty network of 850 offices and 20,000 agents, the Sydney arm has achieved some amazing results.
“We are currently ranked number one in the Asia Pacific region and Michael is ranked the number one agent across the entire network of 20,000 agents,” James says.
So what is so unique about Sydney Sotheby’s International Realty’s franchise and operational approach? We find out.
1. An extraordinary referral network
“The big advantage is the international network around the world. There is only one operator for every franchise area and so if we get a lead, we refer it to that zone,” Michael says. “There is a 25 per cent referral payment to whoever refers to that zone.
“It’s a huge advantage over other networks, as we really do channel buyers and sellers all around the world. Sotheby’s is by far the most successful luxury real estate brand globally.”
The other major competitive advantage is the sothebysrealty.com website. Sotheby’s International Realty spends millions every year advertising the site through prominent media outlets, including The Wall Street Journal, BBC Online and The New York Times.
“Last quarter the international website received over 73 million page views,” James explains. “The Sydney Sotheby’s office receives the fifth highest amount of traffic from sothebysrealty.com.
“This is a huge competitive advantage in an international city, to have buyers coming in through that website, no other franchise has international access on that level.”
2. Exceptional training and marketing support
A Sotheby’s International Realty representative travels to each region to provide agent training, there is an annual industry conference and training programs available through the website.
“At any time you can pick up the phone to New York, or email them, and they’ll help you get free exposure for properties all around the world. It really is a good system,” Michael says. “When you attend the annual conferences you see that very few agents leave the brand, this is because they would be going backwards not forwards.”
3. Strict service standards
All of Sydney Sotheby’s International Realty agents are licensed and have at least one, if not multiple PAs. “We believe our agents are very well qualified and equipped to give people great service and that’s what it’s all about, right?” Michael says.
Strict standards around open for inspection procedures are a high priority according to James. “One of our pet hates is that a lot of agents try and hold open homes with a single person, I just can’t see how that services the client in the best possible way. We have really strict guidelines around how an OFI is held and have set criteria around presentation.”
This includes security, with a representative in every area of the home, and Sotheby’s floor mats, branded water and umbrellas etc.
4. Geographic freedom
Michael and James have chosen not to promote individual offices within the Sydney Sotheby’s International Realty group. Instead, all agents within their franchise operate under the one ‘Sydney’ umbrella and are not bound to specific suburbs.
“This is a huge selling point for people coming onboard, they can sell prestige property anywhere across Sydney and within our franchise region,” Michael says. “I did four sales on the North Shore this year because I knew the owners, the average sale price was over $10 million. I’d never be able to do that if I was a Double Bay agent with another franchise.”
5. The prestige stamp of approval
“The Sotheby’s brand helps positions the home correctly,” Michael says. “If you have a mass market brand it doesn’t say a lot, but if you have your property listed with sothebysrealty.com, it’s saying it’s of a certain standard – like a tick of approval for that home.
“As the brand is known around the world there is a lot security for people, they know that their deposit money is going to be safe etc.”
James and Michael’s strategy of selling prestige property across Sydney, rather than restricting agents to particular zones, has lead to the group setting sale records in 30 different suburbs. This includes Glebe, Surry Hills, Darlinghurst and Oatlands.
“We’ve had some big sales in suburbs you wouldn’t normally associate with the Sotheby’s brand, it’s just about taking on really good houses,” James says. “Giorgio Koula, who set the record in Oatlands with a $6 million plus sale, made an interesting comment to a vendor – ‘It depends on whether you want a local agent price or a Sotheby’s price’.
“Sotheby’s can offer exposure on an international scale like no other brand can, we’ve got representatives in 65 countries. We can access the widest possible audience at no additional cost to the vendor. For example, we just sold a prominent Mosman home to a Cambodian family who saw it on sothebysrealty.com.”
There is little doubt the brand attracts prestige properties. Michael and James have sold over 40 homes between them for more than $10 million each in just the last few years. The strong association with Sotheby’s Auction House certainly helps.
“We had an agent asked to help sell a painting when he was appraising a home, it turned out to be a Picasso,” Michael says. “It was shipped off to Sotheby’s Auction House in London and the agent received a significant referral fee.”
6. Strategic Chinese connections
Every listing on sothebysrealty.com is translated into 20 different languages. In addition to this, the Sydney office has 13 different languages spoken locally and Michael ensures he has a Mandarin-speaking assistant at every open home.
“Each property we list goes on WeChat, it’s the one form of communication the Chinese can use internally and externally, it works within the Chinese firewall,” James explains. “A lot of people are trying to figure out the best way to access mainland China – something like 98 per cent of Chinese people are on WeChat.
“Michael’s wife discovered that if you set your WeChat account up while in mainland China, it means people can share your posts with their friendship network. Whereas if you set it up here in Australia, it doesn’t let you share.”
According to Michael, if you aren’t putting your properties on WeChat you aren’t serious about accessing the Chinese market.
“Every time we get a Chinese person through an inspection we ask if they are on WeChat. We then scan a barcode and add them to our audience, this adds hundreds of additional people to our WeChat who then receive all our property updates,” Michael says. “Ninety per cent of the mainland Chinese who attend our open homes saw the property on WeChat, and the best thing is, it’s free!”
7. Stay progressive with the right partnerships
“I use Campaigntrack for all my photos, floorplans, signboards, brochures and we book our ads through the system – it’s a one-stop shop and the service is great,” Michael says. “We are also very interested in the new Google advertising product, as it is a way to reach people you don’t normally get access to. Plus it’s cost-effective, which is what vendors are looking for.”
While James is a big proponent of new technologies such as drone video and Matterport 3D tours, he agrees products like Google search and retargeted advertising will be key for the industry moving forward.
“I think there are real challenges in relation to the changing face of how you advertise and market property,” James says. “As print declines it will become harder to position your brand and create awareness around you, this is where Google search optimisation and marketing is going to be important.”
8. Everything comes back to service
The disruption of the real estate industry is something all agencies and agents need to consider.
“Yes disruption is going to happen but where disruption comes into play, like taxis and Uber, is when industries become complacent. So provided people remember it’s about serving people and doing your job properly, disruption won’t have as bigger impact,” James says.
“Remember we are not rockstars – we are service providers and as long as people don’t forget that, there is always going to be a service role. Your client is the most important person in the world, it’s about doing whatever is needed to service that client or that buyer.”
Michael believes it is about sticking to the basics.
“It’s actually a very simple industry and a simple job. Connect buyers and sellers to properties. You then negotiate the best deal for your client and always protect their best interests.”