When it comes to real estate, the media has never been afraid to print market projections, build drama or invest in ‘the sky is falling’ theories and stories.
Lisa B, real estate expert, examines how media can influence the market, creating self-fulfilling prophecies.
She investigates what you, as an agent, can do to manage vendor response to negative media about the property industry, so you can continue to build success in the face of hyped-up headlines.
I remember one particular day when I was working in real estate. I remember it vividly. I went to the news agency to buy a newspaper and I saw the headlines of both the major papers. One paper said the market was falling and the other said the market was booming.
I couldn’t believe this was the reported news on exactly the same day! I remember it so clearly, because, to me, it was so funny to see.
For a while after that, I would take both front-page headlines to my listing presentations.
I would ask the sellers how they thought the market was doing. When they answered, I showed them the corresponding front page of the newspaper that applied.
I then showed them the other front-page headline from the same date. I asked them which paper did they believe and which one did they want to believe? I asked which article did they think the buyers would want to believe?
Of course sellers like to believe the market is booming so they can achieve a higher price. Buyers want to believe the market is falling so they can secure a lower price.
A buyer can type these words into Google: ‘Why is the market the worst it’s ever been?’ and a seller can type into Google: ‘Why is the market the best it’s ever been?’ and receive pages and pages of results that don’t contradict their question.
Both are out to justify and to prove their story. It’s our job to get them to see reality.
At the end of the day, it doesn’t matter what the newspapers say. It doesn’t matter what anyone ‘wants’ to be true, all that matters is what’s factually accurate today.
A newspaper’s job is to sell papers and sometimes, unfortunately, they don’t let the truth get in the way of a good story.
Testing newspaper headlines: fact or fiction?
It’s our job to demonstrate and test the accuracy of the media and find a way to help sellers and buyers see the true story.
The sellers need to see we can’t just take headlines at face value. We have to determine what’s an accurate representation of the market in their area.
To help them, we guide them through what has recently sold in their area, what’s for sale, and the buyers we have on our books right now who are looking for a property like theirs.
We also need to let them know what we believe those buyers will PAY for their property. We need to analyse what’s really happening in their street and in their suburb.
It’s important to also reference any other relevant and factual information such as the total number of buyers we have in our database, statistics of visitors to our website and the statistics of visits to the portals. We can also include statistics with regards to the average days on the market.
Ultimately, what we need to do is fight ‘fake news’ or hyperbolic headlines with fact. As agents who have access to a lot of data, sellers and buyers can’t access, we have everything we need with just a few clicks of the mouse!
When approaching this potentially challenging conversation, discuss what the genuine market activity is like, then explain the theory of supply and demand as it relates to real estate. The most beneficial scenario for a seller, of course, is when there are limited properties for sale and therefore multiple buyers.
Demonstrate factually what’s happening in their area. Then show them why it’s a great time to sell.
If prices have taken a nose-dive in your area, if sales have dropped, and the media is reporting accurately, then confirm the reporting. If the sellers agree the market has turned, and they understand, then you are much better off having a seller who is informed about the market rather than someone who’s unrealistic about their asking price.
If they are serious about selling and they trust you, the benefit is you won’t have unrealistic sellers and you won’t have overpriced listings.
What else to consider during your presentation
Within this conversation — your listing presentation — you can also ask questions to gain more information you can use to inform your summary of how the market may be beneficial or challenging to a seller in their particular situation.
Some of these questions, focusing on their motivations not price, may include:
- Why are you selling?
- Where are you moving and why?
- What is your real motivation?
Answers to these questions can help you frame what is happening in the market in a way that makes sense to them and helps set realistic expectations.
When presenting, your discussion of the market is only a small portion of what you need to communicate in order to work around negative property market media. You also still need to convince the seller you are the right person for this job, regardless of current conditions. To do this:
- Make sure your energy is high
- Explain your marketing ability
- Show them your track record
- Show them the track record of your office
- Make sure you are innovative with your approach
- Always look at how you can improve your listing presentation
Finally, remember property will always turn over in your area. People will always need to sell for a multitude of reasons; divorce, financial reasons, job transfer.
Some people will have to sell no matter what.
You just need to be the agent they select to facilitate that sale.
Lisa B
EAC industry reporter