It’s Friday afternoon and I’m doing my rounds checking in on tomorrow’s auctions. A panicked agent picks up the phone and instantly proclaims, “Tim, I’ve lost my best buyer!”
I’d be surprised, but over the course of the last few weeks it’s becoming one of the more common complaints…
If you feel like there’s less active buyers in the marketplace, you’d be right.
The Ray White Australian average is down to five registered bidders per auction with three active. This peaked last September at just shy of nine registered bidders at every auction.
The drop is more significant in our bigger markets of New South Wales and Victoria. Interestingly, South Australia is the most resilient market for the time being.
A few undisputed facts; buyers have more choice and less urgency.
The prospect of interest rate rises and media coverage will add pressure to both sides of the coin which will only continue to accentuate the predicament.
Listen to the chat around the water cooler and you’re likely to hear comments that the market has changed.
There are complaints that open home numbers are low and it’s a struggle to get buyers to commit.
Whilst all of these statements no doubt hold merit whilst coming out of the 2021 property heat wave, the self reflecting question should be; if you have no buyers, is that the market’s fault or is the agent to blame?
A few metrics which are critical to creating a sale:
- Creation: Volume of inquiries
- Conversion: Inquiries to inspections
- Commitment: Inspections to buyers (offers/bidders)
Inquiry levels on a property are a reflection primarily of two things; the level of demand for a given suburb and the quality of the marketing and presentation.
Whilst there is little you can do to create buyers out of thin air, there is a lot you can do to make sure your property shines the brightest amongst your competition.
As the volume of stock goes up in your core marketplace, so too does the importance of high quality marketing campaigns. To put it simply, if you don’t have inquiry, you need to review your marketing.
When you are pitching marketing in the living room, give your owners the choice. To stand out from the crowd, they either need to be the cheapest on the market or the best on the market.
The difference makers in modern marketing extend much further than simply photography and signboards.
Investing money into presentation, landscaping, property styling and simple property maintenance (all those odd jobs) as a core function of a marketing package create essential points of difference and yield great dividends at the point of sale.
We were spoiled with an abundance of buyers over the last year. When the market was cooking the buyers created the urgency, now it is back on us.
Our ability to identify, convert and commit buyers to buying is where we should be buttering our bread.
When reviewing a struggling campaign with an agent, looking at the volume of inquiries to inspections is critical.
If we are getting eyeballs on the campaign, we know the marketing is working. If those eyeballs online aren’t converting to eyeballs at inspections it simply means they ‘aren’t seeing value’.
The first item to review always needs to be how you are handling the price question.
This starts with reviewing all other listings online and how yours compares in price. The next item is urgency, is there a deadline? A reason to act? A unique selling proposition?
And finally, you need to review your follow-up dialogues. What is your follow-up process for an inquiry? What are you saying? How are you saying it? How are you creating the intrigue that requires action from the buyer pool?
It’s fair to say that this is arguably the hardest and most important piece in this current market.
In a market with so much uncertainty, it can be so difficult to convert a nervous buyer into a committed bidder.
This is the rebirth of the sales person. The market is no longer doing the heavy lifting.
When we know that the media, their mother and their friends aren’t filling buyers with confidence in the current market place it becomes our job to fill this void. The best agents do this through evidence and empathy.
What a buyer needs to do to get ready to buy hasn’t changed, however the role that we play in this process has.
Providing sound market evidence of comparable sales, connecting buyers with high quality brokers to build confidence in their finance and working to build flexibility and creativity into contracts to make it easy for buyers to buy are all large factors that give punters the confidence to commit.
Warren Buffett said: “It’s only when the tide goes out that you learn who has been swimming naked” and certainly compared to the 2021 real estate party, the tide is going out.
Market share is made in tough times when a sale isn’t guaranteed. The winner is no longer the agent with the sign board. It’s the agent with the sold sticker, too.