Introduction

For Developers: Opes Partners vs Real Estate Agent

There are two main ways a developer can sell their new-builds. They can either choose a real estate agency, or a specialist property investment company like Opes Partners.

Both have their pros and cons and aren’t the right fit for all developers. In this article you’ll learn the difference between what a standard real estate agent and a property investment company like Opes Partners can offer developers.

Marketing

How Does Opes Partners’ Marketing Differ From A Real Estate Agent?

Once a real estate agent lists a property, they will begin advertising the project. They’ll use a variety of outlets, such as Facebook advertising, print media and open homes.

This strategy tends to work better for properties that are already built or have a show home (so they can run open homes), and more expensive properties that are high-spec and where the market is more limited.

Opes takes a different approach. We have a service that builds a property plan for investors, and then we match them with properties that fit that plan. This means we don’t advertise properties at all, because we are already working with investors who will potentially purchase them.

Once we find new-build developments we think make sense as investments, we can show qualified investors the properties the very next day. Our diaries are full with meetings booked with investments, 2 to 4 weeks in advance.

Currently, Opes markets this service using The Property Academy Podcast; Property Live – our monthly webinar series; Informed Investor magazine, of which we are the proud owners; the Property Academy video course; The Deal video series (NZ’s property investment TV show) and, of course, this website. These programmes offer in-depth and free information to potential investors.

Potential investors clearly want our advice. So, when we genuinely believe a development makes a good investment, they trust that recommendation. After that, it becomes a matter of matching the right property to the right investor, at a price they can afford.

Just to be clear, a real estate agent is great, especially for a vendor selling one property to an owner-occupier. But a real estate agency may not be the right fit for a developer building 40 units off-the-plan. This is where Opes Partners specialise.

Targeting

How Will Opes Partners Target My Development Compared With A Real Estate Agent?

Real Estate agents typically advertise a property the same way to the whole market. They place a similar ad on Facebook, in the papers, and in their leaflets. This is a useful and successful approach if you’ve got one property to sell. But it’s a bit different when it comes to larger developments – where all the units need to go.

Developers need a high proportion (75 - 100%) of their properties to be pre-sold before the banks will give them finance to complete construction. That creates massive pressure for the developer to get buyers to go unconditional quickly.

That is why Opes has three different brands that directly target a separate part of the market:

  • Opes Partners (directly deal with investors)
  • Opes First Home (only works with first home buyers and KiwiBuild)
  • Opes Real Estate (only targets existing owner-occupiers, like a regular real estate agent)

Three different brands mean three different teams, specialising for each type of buyer. This means that a wider pool of potential purchasers is likely to see the development with a message that is relevant to them.

Types of Development

Will Opes Partners Work With Any Development Project?

In short, no.

To compare it with real estate agents: An agent will generally take on any listing, starting from family homes right through to apartments and off-the-plan builds.

Opes is a bit more niche. Our core property planning service specialises in off-the-plan properties from developers.

But we also won’t work on any development. Because the properties need to work as suitable investments for residential landlords.

Opes investors tend to be most interested in mid-tier properties that have a reasonable yield, such as townhouses in Auckland or Christchurch, or high-yielding properties, such as room-by-room rentals or apartments.

In Auckland, investors are usually most interested in 2-3 bedroom townhouses in the lower-mid price range, sitting around $750,000 - $1,100,000.

Quite simply that’s because anything more expensive often won’t achieve a yield that’s attractive to investors.

So, Opes would not be the right fit for a developer selling $2 million + townhouses in central Auckland, simply because the numbers wouldn’t work as an investment.

Speed

If You Only Work With Investors, Will All The Properties Move?

In any large-scale build, a developer needs to ensure all the properties move. Especially if they’re needed for the developer to get finance.

Some developers worry that if Opes only targets investors, not all properties might be snapped up.

To tackle this, we do two things.

First, we reach a wide scope of investors around the country. Real estate agents are based in one market and will tend to favour their home city or suburb, working with buyers in person most of the time.

Opes property advisers are spread across New Zealand’s main property cities: Christchurch, Auckland, Wellington and Queenstown, and primarily deal with investors online. This means that a developer can get their project in front of more people than they otherwise could.

This suits Opes clients because, more often than not, investment purchases are made on whether the numbers stack up as an investment, rather than what the property looks like.

Opes property advisors are flexible in working with investors. They often use Zoom meetings and telephone conversations, rather than meeting in person.

The benefits of a virtual relationship with investors also meant sales were still able to be completed during the Covid-19 lockdown.

Secondly, we are also realistic that most large development projects contain a range of properties. Some may work as investments. Others may not.

That’s why we have the additional Opes First Home and Opes Real Estate services, which can market properties that aren’t suitable for investment.

Cost

How Much Does It Cost For A Developer To Work With Opes?

Real Estate agents charge a percentage of the property value once the property has sold.

Opes charges a flat marketing fee to all developers, per property.

Primarily, this is of benefit to the investors we work with. It means our property advisers aren’t incentivised to sell one property over another just because one is more expensive and earns more commission.

Financially speaking, because of this flat fee structure, Opes tends to be more expensive than a real estate agency for properties under $510,000. However, we tend to be cheaper than real estate agents for properties sold over $510,000.

Opes also doesn’t charge marketing fees and doesn’t ask developers to pay for advertising, like real estate agents do. After all, we don’t advertise the properties to our investors at all.

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Ed McKnight

Ed McKnight is the host of the Property Academy Podcast – NZ's #1 business podcast. He is an economist, having studied at the University of Auckland and the University of Waikato. He's a frequent writer for Informed Investor Magazine and has contributed to NewsHub, Stuff, OneRoof and Property Investor Magazine.