In our industry, and particularly in real estate sales, we guide our clients through periods of change. We are taught to act quickly as agents and, over time, our natural instinct kicks in to often tell us to act urgently.
It’s what we think we must do, which can cause us to adopt a mindset of acting in haste – acting with great urgency and taking others along with us. Sometimes this is effective but sometimes it doesn’t lead to the best outcome.
Sometimes time is our friend and not our enemy. Allowing time to work for us may result in a better outcome for us and our clients, if we have prepared our clients appropriately.
When people are involved in selling and buying real estate, their lives involve change. Within this process, there are also different elements of change that our clients need to be prepared for.
Consider these scenarios. All are delicate situations an agent needs to handle, and their seller may encounter.
- There may be strategy adjustment. (Pricing is just one example.)
- Sellers may put themselves in the position of having a ‘sell or rent’ decision.
- There’s the period of negotiation with potential buyers.
Researchers have noted that people move through a predictable cycle of emotions when they are considering a significant change of course. The scenarios above are by no means all the situations associated with real estate business, but they are examples where facing change requires serious consideration.
As sellers are making changes, they are moving through defined phases. How well you have done your job as an agent can affect the timing and length of these phases.
A seller can cycle through five distinct phases when dealing with change in their lives and in this process and most times, in this order:
- Uninformed optimism
This is where they have an idea of what they want to do but don’t know the details. For example: Should I drop my price or rent the property? If I can’t get the $650k I want, I will hold on to it and put tenants in. BUT potentially the seller hasn’t thought through things like the cost of ongoing maintenance, lifestyle issues, the effect it may have on their borrowing capacity.
- Informed pessimism
Now that they have greater understanding of what is involved with the options of change in front them, they can consider them. This can bring negative emotions about the real estate experience if the process hasn’t been handled well; they can become frustrated and anxious.
For example, the agent may be suggesting a sales strategy the seller had ruled out. This is easily a point where the seller might potentially lose trust and want to withdraw from the agent. This is a very sensitive phase and often one that can lead to fear of one or multiple outcomes.
Here’s where the seller faces what their choice of action might lead to and prepares for acceptance of one of those outcomes, which often may include discomfort or pain.
For example, if they don’t respect market feedback and don’t accept a reasonable offer, the property may stay on the market for a long time or they may not get another offer at all. Once they become more familiar and informed about their situation, they will be more likely to move forward even though they may still feel some discomfort. They will be more open to the reality of the options.
- Informed optimism
In this phase, the seller will begin to feel acceptance and confidence about choices made and feel much less anxious. They have often moved back to, or close to a positive emotional space, which leads to a strong likelihood of commitment and progress.
The seller should feel satisfied their goal has been reached. It is important they understand that the outcome may not be exactly the same as their anticipated outcome, but it is a time to celebrate success. It’s also an opportunity to endorse the value the agent added to the real estate experience.
The seller has passed through emotions of discovery, fear, consideration and commitment on the way to achieving a result.
This cycle of change does not just apply to real estate but knowing and understanding it is advantageous to real estate professionals.
Expectations should be addressed even before entering the first phase. This relies on the agent, at the listing presentation, to explain every potential encounter along the way towards the outcome. With that comes increased credibility and assurance.
The seller becomes more comfortable with the notion of change, which expedites the cycle.
Another reason it is important to understand the phases is that pushing your client too hard at the wrong time – at uninformed optimism, for instance – creates a risk of the seller disengaging themselves from you.
If the outcome or goal isn’t clear enough and potential issues are not clearly described, the seller may revert to what they perceive as the ‘easiest path’ when at the third phase. And this is not necessarily the most beneficial path to take.
Sometimes the real estate client can move through all phases in two hours, sometimes two months… or longer. It all depends on the issues arising and, again, how the agent has prepared the client.
As agents we want outcomes. However, we must remind ourselves that ours is a consultative role. It may not be the outcome that most suits us because it is ultimately the client’s outcome that’s important. If you have done your job as an agent effectively, you will get the result.
The real estate landscape is constantly changing. Understanding and clearly identifying the phases and the stage your client may be at will not only increase your success rate as an agent, but will improve your clients’ outcomes.
Business owners can relate this cycle of emotion in relation to team performance: in what the agent wants to earn and whether they are prepared to do what it takes to get there, for example.
Through understanding the key stages, business owners should be aware of where their agents sit in this cycle and have a clear vision on what is needed to transition them through the phases.