The Power of marketing in a Sellers Market

The real estate market of recent months has been peppered with media comments about the greatly increased level of house sales and the increase in prices being achieved in some markets.

Many sales people and their managers have enjoyed these buoyant months and the tough times of 1998-2000 seem far away.

During those tough times there was a dearth of buyers, and much of an agent's activity was focused on educating their vendors as to the real value of their property. Their focus then turned to finding a buyer. There was a surplus of property and buyers had the upper hand in many negotiations. This market tested the marketing, pricing and negotiating skills of even the best agents.

Now the market has changed and houses are easier to sell. Now we have a reverse situation - buyers are plentiful and sellers becoming scarce. Once the over supply of long listed houses were sold to the wave of buyers, many agents have found themselves short on stock.

This leads to agents competing for listings on several fronts. The easiest (and thus used by the weakest) is to discount their fee or waive any ideas of additional marketing.

Marketing has been reduced as agents and sellers see that houses are easier to sell than before and they consider that the previous marketing campaigns are no longer needed. Indeed there are many stories of houses selling first day on the market.

When you take a look at this market though, is that really the best we can do? The opposite may well be the best path for our vendors.

When there is high demand, where demand exceeds supply there is a tendency for prices to rise. But not if you sell it to the first person who comes along!

In this Market I would recommend 3 courses of action:

1 Target all 4 Buyer Pools

Yes there are at least 4 pools of Buyers and the best prices may be found when all 4 are pitched against each other. So embargo your next listing until they can all look at the same time.

So who are these 4 Buyer Pools?
1 The Buyers each sales person has of their own. The risk is that these people see it first.

2 The Buyers held by other agents in the office and they tend to get there second.

3 The other buyers in the market place that have not yet contacted this office, but they will respond when they see the sign, internet or advertisements.

And the 4th pool Those buyers who don't yet know they are a buyer. These are people who are not actively looking but when they see what they have hoping for, being marketed they respond, and quickly.

Now if it's sold in the first couple of days only groups 1 and 2 are in the hunt.

So a listing embargo, and that includes the listing agent, means no-one goes through the property until the vendor has prepared it to show at its best and all the marketing campaign is ready to launch at the same time. No-one sees through the new listing until the first open home.

Too many Negotiations, even in this market, are between 1 buyer and the seller. Now in that situation most Buyers only see the negotiations proceeding when the vendor reduces.

Why not structure your campaign to have Buyer versus Buyer? Done correctly the desire to own has a major affect on the price the Buyer might pay and so your Vendor achieves a better sale price.

Selling too early means you never get to meet the other buyers in the market that you might need to sell your next property to. There is a risk that more and more salespeople will find themselves with no listings, no buyers and no profile to get them more either.

So with your vendors approval, embargo your next listing and get all the marketing, your buyers and your colleagues buyers lined up to go looking on the same day.

2 Increase rather than decrease your marketing campaigns
The most competent agents understand the need to target these buyer pools and understand that no or little marketing just won't do the job, even in this market. Profile reaches more people, more people means more buyers and more buyers mean competition to purchase. Two years ago we wished for buyer competition - now we can get some, let's make sure we don't short cut the marketing. Just doesn't stack up to tell a vendor there is no need to raise the profile of their property in this market.

3 If you are running an Auction campaign don't be too quick to close it down

It is great to see some Auctions being advertised in this market "Will not sell prior"
Once you start making a practice of selling prior you have given control away to the buyer. Each case is different but when the buyers are falling over each other, why let one buy out of the competition. If your marketing campaign is structured right you will have plenty of buyers. The whole reason for going to Auction is to create competition and let the market set the value. In this market, to sell too quickly is one way to be uncertain of that.

There are plenty of cases over recent weeks where sales under the hammer have far exceeded the offers received prior.

Vendors have waited as long as the agents for this market - to cut corners because homes are easier to sell is not the approach that takes advantage of this market for the vendors as well as the profession might.

So go back and review your Marketing Submission material and implement it even stronger in this market - this is the market to be competitive in the price you achieve for your vendor.

This is the market to profile property widely - don't let your vendors limit their negotiations to the first buyer or two.

IAN KEIGHTLEY


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