Real takes stock after three months

Media release 15 September 2000

Real takes stock after three months

Real Ltd MREINZ has just completed a successful three months in the highly competitive real estate business.

National Project Co-ordinator Warwick Brown, responding to an article in this morning's NBR, said that the Real venture was running ahead of revised budget projections, despite a 15 -20% market downturn of the market.

“Because of the market decline we revised the budget, and are more than pleased with the way the business is operating,” he said. “We have 25 businesses operating from Whangarei to Timaru and there is a high level of commitment among branch members.”

Mr Brown says that members of the Real co-op had been levied for a further membership fee to keep the management vehicle liquid, and the extra funds will see the project comfortably through the pioneering period.

Mark Tingey, spokesperson for Real in the Western Bay of Plenty, says that the comments about the funding did not provide a real perspective on the situation.

"It would be very unusual to find a start up business that did not experience cash flow
difficulties during the first 12 months. The Real real estate initiative is no exception. If anybody thinks starting a nationwide real estate company from scratch in a sluggish market is easy, then they are deluding themselves.

”Very simply, additional short term funding was required because: original budgets were planned around a buoyant economy, we launched in the middle of a property slump; some law firms chose to pull out at the last minute (reducing expected membership income) and some law firms in Auckland have been slow to promote the concept to their clients.”
Mr Tingey adds that in his opinion, Real had been an unqualified success, especially in Tauranga.

“Support from the law firms in Tauranga, Whakatane and Taupo is rock solid. Real offices in the Bay of Plenty are on target for eight sales in the last ten days and are now close to 250 listings, so locally Real is posing a significant threat to the existing industry.

“The benefits to the consumer in having their lawyer involved at an early stage and from
cheaper property sales costs of up to 30%, continue to re-write the rules as to how real estate is sold in the Bay of Plenty.

”As far as Real is concerned, it is business as usual," says Mr Tingey.

Mr Brown said that Real law firm members were being asked to pay this year's subscriptions which are due now anyway and to pay next years subscription in advance.

"It was thought better to borrow the money from member firms rather than from the Bank - it’s as simple as that.”

“There are always people who knock new initiatives, especially those with vested interests in the former and traditional Real Estate industry.”

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