Property deeds
Family values are a business asset at real estate giant Barfoot & Thompson, writes Susan Edmunds.
For many Aucklanders, Barfoot & Thompson is synonymous with the local property market.
Responsible for just over 40 per cent of the residential property sales in the city by number, the agency recently marked its 96th year in business.
Founder Val Barfoot’s first sale was a bungalow on Maungakiekie Ave, which sold for £1600 in 1923.
The business is still in family hands – thirdgeneration Peter Thompson, appointed in 1997, Kiri Barfoot and Stephen Barfoot serve as directors. Fourth-generation Henry Barfoot is a branch manager in Milford, on the North Shore, and Matt Thompson works in property management.
But while at one point, in 1946, the agency slumped to a low of just six sales in a year, it now deals in very big numbers.
There were 9149 residential properties sold by Barfoot & Thompson agents in the year to October. Since the start of 1999, it has sold 221,076 residential properties in Auckland.
The average sale price last month was $939,132. In 1989 it was $160,209, in 1999 it was $286,444 and in 2009, $511.241.
The agency estimates it sells one in three homes in the Auckland market. Market commentators put it slightly higher.
Managing director Peter Thompson said the business had had a clear strategy of ‘‘doubling over’’ generations as each new one came through so that there was continuity from one to the next.
All directors first had to work through the various sectors of the company to understand what the business was about.
That helped them to earn respect, he said, and to be able to understand the marketplace. ‘‘You need to know your product before you can talk about it.’’
Thompson said there had been significant change in the 38 years he had been working in real estate for the company.
When he started there were no mobile phones, no computers, no internet advertising – but long Friday lunches often followed by a drive home he said he would not consider now.
‘‘Over the years some of the fun has gone out of the industry. In the early days we used to have lots of really fun times.’’
Over the decades new legislation has come in; ‘‘things have tightened up, most probably rightly so’’.
The need for face-to-face communication and true customer service remained as strong as ever, he said. Good photography had always been an important part of the business – it first employed photographers in 1942.
Thompson said the public generally did not understand real estate. All they saw was the big commission cheques and the negative news stories about misconduct.
But given the number of people who interacted with the industry each year, the number of complaints was low, he said.
The commission earnings have undeniably grown. In the year to October, Barfoot’s sales were worth $8.519 billion, earning it $195.944 million in commission by its own calculations.
That’s a drop from the $9b it sold in properties in the year to October 2018.
It charges 3.95 per cent commission on the first $300,000 of a purchase price and then 2 per cent of the rest, putting it just below most of the big-name brands in the market.
Thompson said that over the years the brackets had changed. It used to be a higher percentage rate up to a higher percentage of the sales price but had been pushed down as house prices increased.
‘‘Approximately 20 years ago, it wasn’t uncommon that an average net rate of 3.5 per cent would have been charged and now it is around 2.4 per cent to 2.6 per cent. On top of that, a lot of legislation has come in requiring a lot more work when doing an agency agreement for a place to sell.’’
But Thompson said it was not just the success of the property market that has propelled
Barfoot & Thompson. It now owns 80 per cent of the buildings it has offices in, to provide extra security.
During the late 1970s and early 1980s, it did not pay a dividend to shareholders, allowing it to build up a financial buffer.
It has now resumed dividends, but not at the level of most other corporate firms.
Thompson said the business was wholly reliant on the strength of its 1500 staff.
He was often asked whether it was a help or hindrance to be at the helm of a family business.
‘‘People ask whether there’s extra pressure – the answer is yes, at times, and no, at times . . . every day is different and the further up the ladder you go, the lonelier it is.’’
Bindi Norwell, chief executive of the Real Estate Institute, said the agency showed continued support of the Auckland community.
‘‘The family ethos of Barfoot & Thompson shines through when dealing with the organisation and their customer service is second to none. Additionally, the company spends a significant portion of time trying to improve the impression the public has of the real estate industry and this is demonstrated by the strict ethics the Barfoot & Thompson management team expects of its staff.’’ It fundraised millions for charity each year, and was the inaugural winner of the REINZ Corporate Community Service Award last year.