Luke Gilford from the Australian College of Property Finance discusses how important it is for agents to understand the buyer’s mindset, and why you should look at starting your own property portfolio.
The first ‘how to’ for keeping up with buyer trends is knowing or understanding the strategies and options available to both buyers and sellers, so that more deals go through rather than sitting stagnant for weeks and months on end.
If you are an agent who already has this knowledge and understanding, and you think outside the square with ways to get deals across the line for your clients, you ought to pat yourself on the back for taking steps to being part of the solution!
If you don’t know how, start by getting educated!
To ramp your credibility as a real estate professional up another notch, you need to be doing what you are telling your clients to do. And, having the advantages of being in the real estate industry, why wouldn’t you be investing in real estate?
THE CASE FOR ACTION
The Importance of Credibility by Experience
The Real Estate Institute / Australian Bureau of Statistics lists the average annual income of real estate agents (from all sources) at $18,000 per annum, and 80 per cent of those who work in the industry do not own any property.
This is as inane as:
- A financial planner well and truly into retirement age without his/her own financial plan, recommending strategies for retirement planning; or
- A personal trainer who is unhealthy and unfit; or
- Skin advice from a beauty therapist with poor hygiene and skin health.
One of the most frustrating complaints I hear from my students (who are both buyers and sellers) is that real estate agents tell them they can’t do the deal this way or that way; or worse, accountants, financial planners and solicitors say the deal can’t be done. Some of the time this is due to the failure of my students to articulate clearly the intention of the strategy, and as a result misunderstandings occur. However, more often than not it is because the professionals don’t know about the strategy, so therefore shoot it down as a possibility without much consideration.
The question that then gets raised is: based on what qualification and experience are these persons telling others that they can’t do something? Is it the piece of paper on the wall? Or is it the many years of supposed experience?
Sure, to be fair, these are both important indicators. However, I am interested in listening to people who have produced results as a consequence of their actual experience of doing, not just of knowing the theory or concept. In other words, they are doing what they are advising / suggesting / recommending others to do or not to do.
Getting stuck in a rut
When asked why they don’t have property (either owner-occupied and/or investment), the answer provided by real estate agents surely isn’t because they aren’t interested in real estate or property. (It would definitely be a concern if they were working in an industry in which they had little interest!)
The answer is simple. Like many everyday Australians, real estate agents are also mistakenly under the illusion that:
- You need to have money to buy property;
- You need finance in every deal;
- You must do it on your own;
- You need to pay your own mortgage.
So, naturally those who don’t have money, can’t get finance (or don’t know how), can’t do it on their own, don’t want the headache of managing debt and repayments – or all of the above – are led to believe that owning property is unattainable or too much trouble; when in fact these myths are exactly what gets in the way of real estate agents having their sellers selling and buyers buying!
DOING WHAT YOU WANT YOUR CLIENTS TO DO IS THE SOLUTION
Creating your own property portfolio will help you sell more and earn more!
Not only will you enhance the credibility of your role as the ultimate real estate professional, you will be more than qualified to overcome objections and obstacles, such as:
- A potential buyer loves a property you are showing them but they lament, “It’s out of our price range… we don’t have enough money!” You say, “Actually, that may not be true… there are a number of other ways you could possibly have the capacity to buy this property. For example, I bought a property last year that I thought was out of my price range too but I employed this strategy to do the deal… You may wish to consult your <relevant professional> about this.”
- A contract of sale is under threat of falling over subject to finance (how many times has this happened to you?) You say, “I had this happen to me before too, but with a little negotiation and tweaking of the structure with my broker / banker I was able to turn it around…” or, “Have you considered getting a debt partner?”
- A seller says to you that they really don’t want to sell but they think they need to. You say, “I know this will sound really strange coming from a real estate agent whose main function is to sell property, but have you considered that you may not need to? I thought I would have to sell too, at one point; however, when I looked at simply restructuring my property portfolio or loans I found I wasn’t in as much of a pickle as I thought, and was actually able to buy more property!”
In all of these scenarios you are making a concerted, educated effort to meet your clients’ needs, and this in itself sets you up as a person to listen to, a professional to whom people will continue to return to buy more!
THERE IS NO TIME LIKE THE PRESENT
If you haven’t already begun accumulating your own property portfolio, or you feel you are stuck or ‘capped,’ start thinking like an investor and learn about other strategies available to get you there, so you can relate to your buyers and sellers from their side of the table.
Property begins with the agent. So if you are not getting the outcomes you want in your own personal property game or in your business, start doing things differently to produce a different result.
Ultimately, if more agents were doing this and more Australians were breaking out of the confines of the common myths of property and finance, we would all be winning!
Luke Gilford is the Founder and Principal of The Australian College of Property & Finance and is also a full- time property investor and developer. For over 13 years, Luke has used his experience and knowledge in Finance and Property Deals teaching others to create positive.