GOOD TIMES CAN TAKE THE EDGE OFF SOME PAST SKILLS

Over the last 12-18 months many markets have enjoyed very buoyant times. It all started in late 2001 when an avalanche of buyers arrived and started mopping up the over-supply of houses that were then on the market. By the middle of 2002 many sales people were short of listings and their marketing presence dropped as houses sold before any marketing took effect.

This change in the market has meant that many homes have sold very quickly and easily as the buyers were setting the pace. This the change in the market was not seen by many in the industry as an opportunity to build presence and marketing dominance along with the increase in sales. This new market was a marked change from the market that existed from late 1997 through to late 2001. During that time prices eased and vendors took a lot of convincing that their home had a value less than they had paid or anticipated. A good sales consultant managed the listing through to sale by securing good marketing campaigns and then educating the vendor with credible and consistent market feedback.

But over recent months it has not always been necessary to provide this education of vendors as buyers were moving faster than the average sales consultant, and statistics were always behind the market. In this sort of market, too many sales consultants simply focus on getting a controlled listing, then hoping they could get some marketing in the media before it is sold. Too often the sale came first and we saw a new phenomenon: the Secret Agent. We saw the astute change quickly about the middle of 2002 as the volume of marketing increased again and homes were marketed before being released to the eager buyers.

This market has carried on for some months now and both the buyers and sellers are aware of the heat in the market. Buyers accordingly follow new listings – not sales consultants - and seek to purchase before competition arrives from the marketing.

Vendors are now waking up to this heat and in recent weeks we are seeing a drop in Auction successes under the hammer and some listings are starting to stick. Are the buyers cooling off or have the sales consultants failed to educate their sellers?

It could be a great time to just take stock of how you are managing your listings and whether you may have lost sight of a little market reality in the excitement of obtaining good listings in this market. The market may have softened our edge – Just get a listing and it will sell.

The promise of a premium, and the media speculation about the property boom, may have convinced both sales consultants and vendors that a premium sale price is as easy as just putting it on the market.

Nothing could be further from the truth. Buyers view houses in terms of the value they see in them – not the asking price. All that price does, is prejudice their view of each home they see in comparison with others. Vendors likewise, gain an impression that their home will have benefited from the market gains more than anyone else’s. Compound this with the average consultant’s assertions about premium price possibilities, and no countering of the vendors opinion of value (I don’t want to run the risk of losing the listing) can lead to an unrealistic reserve on auction day or a listed price that is just beyond capturing the interest of the real buyers.

Perhaps it’s time to take a look at managing some of your new listings a little differently:

1. Don’t treat all auctions the same. It seems to be popular in this market to run auction campaigns over 3 or even 2 weekends. This could be done for various reasons:
• To retain the buyers who want to purchase now
• To reduce the marketing costs so make it easier to list

Neither of these necessarily in the vendor’s interest.

Perhaps you need to look at each listing differently and assess the vendor’s expectation and motivation alongside the property and design a campaign that may be 3-4-5 weeks. This could provide time to educate the seller to a little more market reality, and time to work those special buyers even higher.

There is no single time-frame that works. You need to look at each property and vendor and design a campaign that will achieve a result in this circumstance. One size does not fit all.

2. Have you stopped providing your sellers with credible, consistent and structured feedback on what the market is saying? When houses sell very quickly we may have got out of the habit of providing this written and verbal feedback. For many listings lately you may not have had to write even one report. Have you forgotten how or decided it is no longer necessary? It could be time to review the quality and frequency of the educating feedback you are providing to your vendors.

3. Is it time to check that your feedback is not just a phone call, but you have continued to provide weekly written feedback, containing comments from real purchasers and clearly indicating the feedback is not as we all would have hoped, but despite that level of feedback there are people interested in purchasing – just at a different level than anticipated.

4. Have you continued to follow these written reports with a face to face visit? Whatever the feedback remember you are only the messenger – done correctly they won’t shoot the messenger. By fronting up to your vendor to support your written report you will have the opportunity to gauge their reaction and reinforce the message.

Whilst many of the industry are in buoyant times there are still homes that are refusing to sell. Remember there is no one way to market and sell a property. If you have listings that are sticking around, avoid the risk that you are waiting for the current market to work its magic – you may need to take a look at the vendor education you are doing. So review each of your present listings and ask yourself; Is it the marketing, the price, the house or is it me?