Tuesday, February 27, 2024

Voice of rural real estate signs off

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Brian Peacocke is stepping down as REINZ rural spokesperson.
Brian Peacocke is stepping down as REINZ rural spokesperson, a role he has held since 2011.
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Being a top rural (taiwhenua) real estate agent requires the ability to establish and cultivate relationships with people through integrity, professionalism and communication.

It’s also job not for the faint of heart because of the pressure that comes with it, Brian Peacocke says.

“If you’re acute at each of those, you’ll do fine.”

As rural spokesperson for the Real Estate Institute of New Zealand, Peacocke’s stated opinions have had to walk a fine line between farmer morale and the marketplace.

Later this year he will step down from the role that he has occupied since 2011.

“It’s better to pull out that be kicked out,” he laughs.

His previous career as a farmer in Waikato, King Country, Gisborne and the Central Hawke’s Bay helped build up his connections and contacts. Over the years he has developed a large network of sources across the country to keep him informed of the issues – and every sale that takes place. 

He studies that sales data and if it has a potential point of interest, he may comment on it in the monthly wrap, The REINZ Release. It’s a time-consuming process, but if there is something unusual, he may reach out for an explanation. 

“We don’t know which company provides the stats when I get them, they come through en masse and the people I ring will be representative of the industry. It could be any one of the companies,” Peacocke says.

This removes any perception of bias towards any of the real estate companies.

Peacocke set up Pastoral Reality, which he operated from 1992-2020, before selling it to Property Brokers and setting out on his own, operating as PRL Rural, working out of his home in Tamahere on the outskirts of Hamilton.

As an agent, he is also an independent operator rather than belonging to any of the major companies. This, he says, enables trust among other agents that he is not favouring one business over another. 

He also, as a rule, never talks politics, referring to the government as “central government” rather than by its party name.

“My role as a commentator is putting forward an industry perspective, not a personal perspective,” he says.

It’s been a decade of huge change in the farming industry with the emergence of dairy and horticulture as major industries. 

In recent years, the Overseas Investment Office has also been a major influence on the sector, particularly in recent years as more people and companies look to purchase land for forestry conversions to offset emissions.

Tighter land use rules from local and central government – mostly as a response to dairy industry expansion – means a lot of due diligence is required for every rural property sale. 

It is also the main source of pressure that agents face because they have to ensure any data that may impact on the buyer’s decision around land use is transparent and verified in the sale process.

That data includes nitrogen leaching rates, production, biosecurity information (particularly related to Mycoplasma bovis), soil type, fencing and slope gradients, which could affect what class of livestock can be used.

“You learn to make no claims on anything. You get asked the question, you provide the information, you don’t provide the answer,” he says.

“We’re very exposed to the consequences to the lack of due diligence.

“If you don’t disclose or if you’re incorrect then the exposure to litigation is dramatic. So, we have a very demanding requirement for the collection of information.”

In future, that diligence will also include some form of data related to carbon emissions.

The degree of information required for a typical agency agreement is huge but is a necessity, he says.

“It doesn’t take much for a purchaser to turn back to a real estate agent, often at the prompting of a solicitor, for a lack of information or erroneous information. Hence, the scrutiny the sector is under is much greater than it used to be.”

Agents also cannot sell any land that has not been scrutinised under anti-money laundering rules.

“This clarifies the source of wealth, in essence stopping farm sales from being a money laundering opportunity for criminal proceeds,” he says.

However, going through that process can be time consuming – particularly if the land has multiple owners. This is largely because the data collection process is antiquated and cumbersome.

But failing to follow the rules could mean the loss of the agent’s licence and fines.

The industry has also worked hard over the years to bring a higher level of professionalism into it, he says. 

“This has improved the image of the industry – and the industry needed to have an improvement in its image.”

Land values have peaked three to four times during Peacocke’s time in real estate, with fluctuating farmer incomes having a big influence.

Farmers tend to hold onto their land when incomes are strong and look to sell if prices ease – but they want those peak prices.

The banks and their lending policies also have an influence on land values because they either approve a loan or they do not.

Equally, if a person has high equity, low debt levels and good cash flow, their security position might enable them to buy more property. This kind of transaction has resulted in neighbours absorbing neighbouring land and has increased dramatically over the years.

“Quite often you’ll hear farmers say they are never looking for land to buy until a property that adjoins them or is within close proximity [goes on the market] and all of a sudden it triggers their interest and they realise they have the ability to purchase.”

It all makes first farm purchases much more difficult because of the level of equity required, he says.

In recent years there has been the emergence of exceptional cases where benevolent farm owners go into equity arrangements with younger farmers resulting in increased equity or a buyout.

However, this takes diligence and commitment from the farm employee.

Factoring through all of this is the issue of an aging farm-owner population, and succession. It’s an increasing problem where no solution has been found – and that solution has to come from the farming industry, Peacocke says.

Through it all, good agents focus on maintaining a relationships with the landowner.

Critical to the role is being fair both to the vendor and the purchaser – because today’s purchaser could be tomorrow’s vendor.

“Your priority is your vendor but you can’t do justice to your vendor without doing justice to your purchaser because in doing justice to your purchaser you create that climate of trust, and if you have that trust you be able to get a better price out of them.”

One of the biggest mistakes agents can make is blurring the lines between selling property and being a farm consultant.

Agents must be there to represent the interests of the vendor and in doing so they are fair to the purchaser, he says.

“Due diligence is the underlying factor – and total disclosure. That’s your basis of operation.”

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