Markets shift quickly and often the response from the industry is far slower as we look for ways to rationalise the change.
The post holiday blues, buyer fatigue or the upcoming federal election all seem like good excuses to avoid the simple truth that the long standing power dynamic of a sellers’ market has started to sway.
Off the back of arguably the best real estate selling conditions in modern history, early indications suggest the pinnacle of the market has passed.
We see the typical shift with increased stock, decreased buyer urgency and speculation around impact on rates and lending restrictions.
While many see the excuses as barriers to the growth in their business, history tells us that the best real estate businesses in fact grow their market share during times of uncertainty as the agents pivot quickly and leave the rest waiting for the market to save them.
Here are your top three things to focus on in this changing market.
- Remove your ego about price
Australian house values experienced unprecedented growth year-on-year, up more than 24 per cent last year.
With record prices week after week, it’s been easy for an agent to start to believe their own hype.
The challenge comes when the market starts to move the opposite way. Is that same agent just as happy to be ‘wrong’ about the price expectations of a sale?
A truly process-driven agent knows that they influence price, not control it.
It will often be the agent who can’t leave their ego at the door who struggles to understand that the market dictates value and their process creates the sale.
- Death of the off-market sale
When hysteria hits the market emotion can start to defy logic.
After weeks and months of punters continuing to come second in auctions and negotiations they’d often look for ways to ‘bypass the process’.
The rise of the off-market seller became a tool that achieved an easy sale from a potentially unmotivated seller to a highly motivated buyer.
These same opportunities that agents would hold on their books quickly become blockages to capacity.
Vendors need motivation in this marketplace, and nothing shows motivation more than skin in the game like vendor paid advertising or a deadline at auction.
Conversations around what Plan B might look like are critical to identifying who’s really in the market and who has their toe in the water.
- Creating buyer urgency
When there is a shortage in stock, the market creates the urgency for buyers to act.
Buyers go to opens and auctions and see hoards of competition and the fear of loss drives action.
As the increase in stock goes up, the desire to act goes down.
The agent that expects the web portals to create traffic at their open homes shouldn’t be surprised to be spending their Saturdays alone.
The challenge now is how does the agent create action?
An intimate knowledge of your buyer’s circumstances, needs and motivation is now a critical step in crafting a deal.
Creating a pipeline of genuine buyers, ready to buy and driving these buyers to your stock is the difference maker.