Markets are inherently unpredictable. Few of us expected the bull-run we saw in real estate prices as a result of our first lockdown in March 2020.
Now, 18 months later, we are all wondering if and when the penny is going to drop.
We know that real estate markets run in cycles. We know there will come a time when listings are plentiful and buyers are hard to come by. What we don't know is when it's going to happen.
Trying to time the market is a fool's errand, but preparing for a changing market is not.
My goal today is to implore you to prepare for that changing market, so you can take full advantage when the time comes.
When the global financial crisis hit in 2008, the vast majority of agents were stunned and didn't know how to pivot their approach to suit the changing sales environment. They had forgotten how to secure price reductions, how to manage 14 open homes in one day and how to freshen up stale marketing campaigns.
It all become 'too hard' to make a sale and many salespeople left the business as a result. This time will come once again, and in my opinion, potentially quite soon.
You can take steps now to put yourself in the box seat to be loaded up with listings when this change occurs. But you also need to understand that when the change comes, you will need a different skill set to sell those properties you list.
Let's break this down into two steps:
Step 1. When the market changes, owners look for experts.
In a hot market, like we have seen over the last few years, owners tend to list with the most proficient-looking agent who charges the lowest fee. Their thinking: the market maximises the price anyway (to a point), so they focus their energy on creating a commission war between competent agents to reduce costs.
In a buyers market, on the other hand, achieving the sale and maximising price becomes more important than the commission. Owners look for a skilled practitioner with proven market strategies, evidence of success and infectious positive energy. Owners see other houses languishing on the market and fear the social shame of a withdrawn listing. So they seek out a local real estate expert who can increase their chances of success.
To take advantage of this eventual change in the market when it happens, position yourself as that local expert now. Start communicating regularly with as many homeowners as possible:
- Send an email newsletter to your entire database at least every fortnight, if not every week.
- Focus on adding everyone you can to your database.
- Start delivering a direct mail campaign to your target farming area at least once per month.
- Call at least 12 past appraisal / local homeowner contacts every week.
- Take one key referrer out for lunch or coffee each week (once alert levels allow).
- Make a commitment to be consistent with the tasks above and find someone to hold you accountable.
- Start talking to clients positively about the impending change, even though you don't know when it's going to happen. "The market will change at some point and I'm excited."
- Become the go-to resource for hyper-local sales info. Know your market inside out. Quote relevant stats as often as possible in daily conversations.
Note: The first key statistic to track is days-on-market. This will move before prices change. Keep a close eye on this number and when it goes up by 5+ days for two months in a row, get ready!
The key to becoming the go-to real estate expert in your area is regular, continual communication with as many people as possible.
It needs to be done in a meaningful way too, though. Understand that a well-crafted direct mail letter is worth far more than a Facebook post or Instagram reel.
An informative email newsletter digested over a coffee is worth so much more than a sold-sticker selfie.
Better yet, an expectation-free, keeping-in-touch phone call or coffee meeting is worth more than anything else. Especially if you follow up with a hand-written card.
I want to convince you that the time to level up your communication is right now. Even though at the moment, nothing is coming on the market and every owner is staying put. For your marketing strategy to work, it needs to start 6-12 months before owners need to sell.
You need to start right now, knowing that the market will change. Because when it does, there will be a flood of listings hitting the market. Stock numbers could easily double in a matter of weeks.
It might not happen this month, it might not even be this year, but it is coming.
Step 2. Change your mindset.
When the change comes, it will happen quickly. Most of your colleagues will be left scratching their heads. You'll hear comments like:
"Why is no one interested in Smith Street? I thought we'd have 10 offers on it by now..."
Or words like: "My open homes were really quiet today, maybe there was something on in town..."
Look out for these little verbal signals that the market is changing and don't be slow to make adjustments to your approach.
In a buyers market, getting buyers to visit properties becomes a skill in its own right. You need to dust off your advert writing skills and insert loads of motivation into your text. You need to give buyers a reason why they can't afford not to visit your cool new listing. Ask your owners permission to use their reason for sale in your marketing, to get more buyers through the door.
Advert headlines like: "Exceptional Living, Quality and Location." won't cut it.
Instead, you will need attention-grabbing words like:
"Surplus to requirements. Owners have bought elsewhere."
You will also need to learn how to freshen up a stale listing if the first deadline doesn't produce a sale:
You will need to learn how to secure more vendor-paid advertising, so your listings stand out from the crowd:
And you will need to dust off a skill set that hasn't been required in years, namely - how to ask owners for a price reduction:
In a buyers market, there are lots of properties to sell, and you get to build quality relationships with buyers during more drawn-out negotiations. In my opinion, it's a more enjoyable market to work in.
From my sales and coaching experience, I have found it's easier to build your real estate business in a buyers market. So if you have been struggling to break through and have considered giving up, it's worth waiting if you can. A change in market conditions provides hungry, new agents with more opportunities to succeed.
I know you might be reading this thinking - sure, I know it's coming but I need a listing now. And to that I would say:
You will increase your success in real estate when you stop seeking instant gratification and start thinking long-term.
Plant seeds now that will turn into listings in 6-12 months time. Be ready to take advantage when the market changes. Use the impending change to launch your career to new heights.
You got this.