any easing in the market change the focus of the sales force?
we take a look back at the residential property market in
New Zealand over the last couple of years, and the large
number of new people joining the sales force, it could mean
that as many as 40% of the now active sales force may never
have worked in a market of stable or easing values.
We have all read of the many localities that have enjoyed
large capital gains over that period:
- some areas where properties have sold before any marketing
ever commenced (too many in my view)
- many sold and easily exceeded the vendors expectations,
especially at auction when multiple bidders competed,
- and, the vendors asking price was met by one of the first
buyers to inspect.
This has meant that the focus in the sales force was in
securing more listings and wasnt it competitive?
- as it was very easy to sell in most localities. And now
we have many sales people who know no other way.
All the indicators of a growing buyer resistance to the
new values began to show itself in Auckland in the second
half of November in 2003. Some houses started to sit as
their owners continued to place their expectations above
the market and the eager sales force may have supported
their views in order to secure the listing. Whilst the summer
holidays got in the way, and may have distorted the trend,
and we wont know a real indication of any new market
direction until the February sales statistics are released
in March. If the anecdotal evidence of the last few weeks
in January and early February (when this is being written)
was to continue as a trend we will need to see a change
in the focus of the sales force and many will not
have worked in this type of market before.
The initial indicators are pretty simple to read:
- less or no bidders at auctions
- less multiple offers
- houses the sales force thought would sell, simply sticking
- decrease in median price though not always an indicator
of falling values as it often can show a change in market
- increase in median days to sell
- more for sale signs
- the same adverts repeated a lot more.
All this leads to the buyers having more choice and suddenly
the negotiating power, held recently by the vendors, starts
to move to the buyers. They can now start to shop around.
Now we may move to a market, where the sales force focus
changes from competing for listings to servicing listings
and competing for buyers.
This will be a new skill set for many and managers will
need to address this new focus to avoid listings running
through to expiry not seen for sometime.
As always the vendors will be in resistance about accepting
any easing in values or that their expectations, as fuelled
by media articles and stories of amazing prices in their
locality last year. It may take time for the message to
get through and some salespeople will find themselves with
listings purely because their vendor wanted to access the
capital gains made over recent times. These are the vendors
who will resist any change the hardest.
As listing stocks build up it will be a case of collecting
market feedback and delivering this in a format that the
vendor can digest even if it takes several doses
or they protest that they are taking no less.
So some newer members of the sales force will find themselves
in a new role questioning whether they want this
listing at all. The process of educating vendors to any
change in values, or the fact that the market has stabilised,
will mean that some will need to allow more time for the
message to get through and therefore marketing programmes
may need some adjustment.
So the first step may be to allow more time between launching
the marketing and auction or tender date. These were shortened
during the flurry of last year to make sure buyers didnt
wander off and buy something else. They simply wouldnt
wait 4 6 weeks, so campaigns were shortened to 3
weeks and in some cases even less. Now we need more time
to educate the vendor and campaigns may need to be extended
by 1 or 2 more weeks to allow time for the news to sink
The second step is to maintain your profile marketing
focus. During the last year it was vital to promote
properties with profile marketing as our vendors deserved
the opportunity to achieve any market premiums that buyer
competition encouraged. Now the marketing is absolutely
vital to secure the buyers that are active and those that
are brought to the market by strong and emotional marketing.
Any easing in the market means the competition may need
to be created by strong marketing the competition
that existed last year simply because demand outstripped
supply, may need prompting through strong marketing campaigns.
The third strategy is to absolutely ensure your market feedback
is delivered in writing and followed up with a face to face
meeting a day or two later to ensure the message is received.
The habits that some sales people got into last year, a
quick phone call (and early sales), will not serve you well
if we see the apparent easing continue.
This will be a new skill for some sales people to develop
and they and their managers need to focus on the following
- track carefully the time any property is on the market
and take early action
- check you have a strong marketing campaign
- collect the facts and remember bad news may be necessary
- have your feedback letters read by management before posting
- do you need to change what you say at open homes and to
Whatever the market, the real professionals prosper. It
is a case of making sure we are adapting to any changing
market conditions. Coupled with that is that some core activities
dont change and it is a question of once again focussing
on these core activities and doing them superbly.