This month, we introduce our new series, ‘Coping with the Cool’ from industry reporter, coach and digital marketing expert, Lisa B. As the market continues to change, Lisa will provide valuable advice and ideas about how, as agents, you can capitalise on this shift and use it to your benefit.
When the market changes it can feel like someone turned the tap off. Things are suddenly very different. The phones aren’t ringing as much. There’s hardly anyone coming through open houses. The properties that are on the market are not selling as fast as they used to. The days on market are much longer. Agents are holding a lot more listings. Buyers are becoming difficult with negotiations. Sellers don’t want to accept the market has changed and they are becoming restless.
Agents are ripping their hair out!
So, what can you do to combat the effects of a market change, so you can use it your advantage and to the advantage of your seller? Let’s talk about a few things real estate agents need to be conscious of when operating in a softening market.
It may sound obvious but HONESTY AND INTEGRITY are imperative. In a rising market, agents can get away with not telling owners the truth about the price of a property, as over time, the market can catch up to their lies, and the owner is none-the-wiser. In a declining market, they can’t hide. The market will not save them.
They may, however, still take the risk.
At listing presentations, agents need to be very clear, they need to be very matter-of-fact. They need to explain to sellers they’ll be very honest, even to their own detriment.
The major thing to remember in real estate, is no matter what the market is doing, people will always need to buy and sell. Sales will never completely dry up! There will always be people needing to sell for a multitude of reasons.
People will need to sell because they are relocating to another area. They have a job transfer. Their marriage has dissolved. They have financial problems or they want to liquidate assets.
There will always be sales. You just need to be the agent that secures the listing.
Focus on one seller and one buyer at a time. Don’t worry about what everyone else is doing. Focus on finding someone who wants to sell, then find a buyer for their home.
Over-service the sellers and remember preparation is everything. Research extensively before you appraise a property. Show you know what you’re talking about. Know what’s sold and know what’s for sale.
Show VALUE in your proposition! What can you offer that no one else can? What are your true points of difference? Here are some ideas:
- Marketing strategies
Strategise your marketing. Identify who the target market is for the property. If the property is located near a hospital, then target employees of the hospital, whether that’s through Facebook ads, notice boards etc.
- What they lose, they may gain
Explain to sellers that if they are buying and selling in the same market, they may actually be better off selling now.
If the property they own is worth $550,000 and they plan to upgrade to a more expensive home, the adjustment in the market now, may have made the upgrade more affordable. It may move out of reach if they wait for the market to go up to increase their own sales price.
To give another example, if a home your client was looking to buy was $1.2M and now it’s $1M, that property has adjusted $200,000. If the house they want to sell was $600,000 and now its $550,000,the price of their home may have corrected, but overall they are $150,000 better off buying the next property now.
- Over-service buyers
I can’t stress this enough. When it’s a buyers’ market, you need to work with the buyers more. Show you are different by providing exceptional service. You must follow up buyers like a demon. You must follow up with the intention of helping them, meaning you must contact them in a non-pest way. Agents need to build a relationship remembering they are working for the seller to get them the best possible price.
I asked EAC director, Michael Garside how agents may need to change their pitch in a softening market.
Michael said an agent’s pitch now needs to be much more about their activity and marketing.
“We can’t rely only on the portals anymore, we are now focusing a lot more on working closely with buyers.”
“We have changed our marketing to a more staged outcome — previously, for example, we would have a four-week marketing campaign, whereas now, we may instead have a four-month campaign.”
When dealing with sellers, Michael advises, “Agents really need to be upfront with sellers. We need to let the owner know this price is not their property underselling, we need to explain the reality of the market and set realistic expectations. Owners need more communication, even when you’ve got nothing to say. A well-communicated vendor is much more educated and will respond to the market a lot faster.”
Greg Toner, Chairperson of EAC’s Board of Directors said he thinks the big point of difference in this market will be how an agent can demonstrate their extra services; their marketing and also their network of professional contacts and the skills of these professionals in making the vendor’s property more saleable.
“Agents need to be able to demonstrate their value. Commission rates have come down somewhat over the last three years and it seems everyone is offering a discount. I believe it would be better to charge a bigger commission and offer a more improved service.”
EAC INDUSTRY REPORTER