The national real estate market is normalising after a period of high sales and agents need to be prepared for the new conditions.
Here are 10 helpful tips you can implement in your business to give you the edge on your competition as the market evolves.
- Educating your vendors is even more critical in this market. Schedule weekly vendor meetings supported by written reports with new comparable stock on the market and up-to-date sales results.
- Don’t be the reason the property doesn’t sell because you think it is worth more. In this declining market, no-one knows what a property is worth exactly and entertaining your vendor’s high expectations because you want to be the knight in shining armour could be the thing that holds them back from accepting a great price. Even worse, it could be the reason they sell for even less later on.
- The best business is repeat business. In this market it is harder to attract rave reviews, testimonials and referrals, although there are a few things you can do to change that.
Let me tell you a quick story about someone who is currently renovating my bathrooms. He is doing a great job at a reasonable price. That doesn’t impress me because it is what we all expect. It is standard business practice.
Where the renovator has impressed me is with a few small things he has done. He fixed my front garden tap and moved my garbage bins back to their normal spot after they had been collected. He noticed there were two toilet brushes downstairs and after finishing renovations he moved one of the brushes upstairs to complete the job.
He did those three tasks without me asking and without boasting that he had done them. I’m so impressed and will always refer him to others because he has under-promised, over-delivered and gone beyond the scope of our arrangement.
So what “wow” moments can you create for your vendors and buyers? It could be as simple as folding the toilet paper into that fancy triangle at open homes, sending a photo of the property brochures when they are first delivered, or a random Sunday message about the internet hits for a vendor’s property. Make it personal.
- In this market I joke and say there are two types of vendors, one that is unhappy and sold and one that is unhappy and unsold. They are all unhappy when they set their expectations on prices that were achieved when the market was hot.
Yes, I know many of you have happy vendors, and that is because you have done a great job and kept them educated throughout the process. But how about those few vendors that sold and are unhappy? What can you do to change their perspective?
In real estate sales, many agents do the transaction and move on to the next client but you can add value for a client well after the fact when they can’t give you anything in return. For example, sending a prospective client a gift is a nice gesture but the vendor knows why you are doing it.
It can be more impressive if you send a past vendor a gift 12 months after the sale. Or call a vendor six months after the sale to tell them about properties that have sold for less than the price they received. This will change their negative perspective as they realise you encouraged them to take the price because it was in their best interest.
- Focus on relationships and trust. This is achieved by high frequency of contact and making sure you deliver on what you said you were going to do. Some vendors are annoyed when agents give them a market appraisal figure on the high side. Although I don’t agree with agents doing this, the vendor can unintentionally create this situation by interviewing several agents.
The agents are competing on all levels and one of these is the market appraisal figure. In most cases building a trusting relationship removes the need for the vendor to interview multiple agents. In turn, this removes the need for agents to “buy” the listing with an unrealistic appraisal figure.
- If the vendor has high expectations you could be better off negotiating your commission as a percentage at first. Then you can give your vendor a win by working out what that dollar amount equates to based on their expected sale price. You could even lower it slightly to a flat dollar amount fee instead of a percentage. This protects your earnings rather than working out your hypothetical commission on a percentage and sale price that isn’t achievable in this market.
- As the market gets tougher you should renegotiate your percentage split with your office or move to a different structure that potentially works better for you. That way you can negotiate a structure where you keep up to 100 per cent of your gross commissions.
- In this market the number of days on market will extend so ensure you are renewing your soon-to-expire listings. Chase expired listings from other agents. These vendors are likely to have been through an education about the market and are now ready to sell.
Let the listings with unmotivated vendors go. You don’t need that negativity in your headspace. Remember, it is okay to list a property with an unrealistic vendor as long as they have some form of motivation to sell and you have told them what the realistic sale price is.
- Get vendor paid advertising upfront or use a VPA company that pays it for you and charges the vendor a fee to do this. This is especially important for business owners. As days on market increase, the VPA cashflow delay can sink many ships, especially the largest ones. They are most at risk.
- Now more than ever you need to make sure your listings are presented perfectly. This includes advertising copy, photos for marketing and presentation in real life with display furniture, beautiful gardens, natural light, pleasant aromas and music. That attention to detail is essential to give the property the best chance of selling.