When the global financial crisis (GFC) hit back in 2008, the real estate market ground to a halt. Interest rates climbed. Finance was hard to secure. Buyer demand disappeared. Properties that were getting 10-15 offers were lucky to get 1 or 2. Properties that had consent issues or off-putting features got no interest at all.
Listings suddenly became hard to sell and real estate salespeople panicked. Rather than focusing on solutions, most agents just wanted to moan about how tough the market was.
The dejection in each office was palpable.
What I saw, on the other hand, as a young 23-year-old just getting into real estate, was a massive opportunity.
Suddenly, marketing houses required skill, persistence, and problem-solving ability. Dialogues became critical, and quality vendor relationships were the difference between making sales and going broke.
Real estate salespeople could no longer perform an order-taker role, showing up to open homes and collecting commissions. It was no longer a race to the cheapest commission at listing time, with agents pitted against each other to see who would lower their fee by the biggest amount.
Suddenly marketing plans mattered. Each property required a bespoke campaign to suit the type of buyer you were trying to attract.
When I talk to salespeople about the current market in 2022, I am constantly reminded of that post GFC period in 2008/2009. I see striking similarities. It's taken a while for us to get here, but now that the market appears to be turning (or in some cases, is heading well down the hill already), it's time to see it for what it really is:
A golden opportunity for agents with the right mindset.
While every other agent is floundering, you can stand out from the crowd and grow your business. In this article I'll tell you how.
Step 1. Stay positive
The market is what it is. You can't change that. There is no point in being all doom and gloom about it. You just have to get on with helping people buy and sell.
Obviously, you don't want to B.S people, so the best approach to take when someone asks you what the market is like is to say: "UNBELIEVABLE!" in a very positive tone.
It could be unbelievably good or it could be unbelievably challenging. Either way, it doesn't matter, as long as you are positive and have a solution-focused approach.
No matter what the market is like, houses still change hands. And you are going to be the one to make it happen.
Step 2. Lean in to crucial conversations
In a tough market, you are going to have to eat that frog on a daily basis. Whether it's telling your vendor you have no tenders, or asking them to adjust their price, or repeatedly telling a buyer their crappy offer has been turned down. You have to embrace having these difficult conversations. It's your job.
These critical conversations are the only way to make true progress. That, and the number one thing your clients want and expect at all times is communication.
The key is to stay positive, tell your clients you aren't giving up and that you will keep working until the job is done. No one goes on the market for fun, most clients genuinely want to move and can handle the dejection, as long as there is a plan they can believe in moving forward. Most clients will understand it's not your fault, as long as you present them with a plausible plan B.
So when you show up to a tender meeting with no tenders, use dialogue like:
"Mr & Mrs Vendor, we are going to get your home sold. I am positive of that. It's just probably not going to happen today.
Here's what we should do moving forward. Let's give it 48 hours to see if any of the interested parties want to offer outside the Tender/Auction process. If that doesn't work, let's put a sharp asking price online. I'll call everyone who has been through the property again and re-send it to our database. I also recommend we change the main photo online, update the advert and try the following additional marketing options.
By the way, Mr & Mrs Vendor, is there anything you would like us to do differently to try and secure a buyer? Is there any part of our approach that you aren't sure about or comfortable with?"
That's a plan your owners can get behind.
Notice that last part too - it's important to give your owners a chance to voice any concerns about their sale process. You could be on the market for a while, so you don't want any small objections or concerns building resentment over time.
Step 3. Embrace buyer servicing.
I don't know about you but it used to frustrate me when I had 15 purchasers trying to buy the same home all at once. You end up doing 15x the work to sell the property once. In the heat of the boom, I actually longed to go back to a more normal market where you would enter into a 1 on 1 negotiation with a single buyer, chipping away at the price difference until you reached an agreement.
In those situations, you really got to know your clients and there was a true sense of achievement at the end of the process when the sale was concluded.
The process was about helping people move, not playing dozens of people off against each other to squeeze every last dollar out of the market.
In a balanced or down market, you can stand out by offering buyers real personal service. Get to know what they are really looking for. Send them listings from other companies that might suit their needs (without expecting a commission). Call them when old listings become attractively priced. Take them around multiple properties in one single viewing appointment so they can compare their options. Don't pressure them to make offers.
If you do all this, there's a good chance they'll remember you, refer you to others and use you when it's time to sell a few years down the track.
Step 4. Get creative with your marketing
The days of bullet point, 2-3 sentence adverts are over. Buyers expect more. When it comes time to write an advert for your new listing, turn your phone off, lock yourself in your office and really put your thinking cap on. Who is the likely buyer for this property? What's important to them? What are they looking for? Write to that particular person or family and put your heart into it.
Focus on benefits rather than features.
And if, after a few weeks, you aren't getting any interest. Start all over again, change the main photo, write a new advert, and follow step 5...
Step 5. Put motivation in your adverts
One of the most crucial skills you can master in a challenging market is to explain to your vendors why it's important to put motivational wording in your adverts.
The number one thing you need when you are marketing any property is written offers. You need buyer interest to work with.
It doesn't matter if those offers are low. Sometimes you need to kiss a few frogs to find a prince :) Offers mean action, and while you have action, you and your owners will feel like you are making progress.
In short, if you have offers coming in, you have a chance to sell. No offers? You are dead in the water, counting down the days until your exclusive listing period runs out and you lose the listing.
Use a script like this with your vendors:
"Mr & Mrs Vendor, I'm seeking your permission to put some strong wording in our advert. I want to encourage action. The goal is not to make it sound like your property is going to be a bargain. The goal is to attract offers. I would rather bring you 10 offers that you turn down, than not have anything to talk about. If we get offers coming in, then there's a chance we might end up with a multiple-offer situation, which would be great, but no matter what, the key is to get people in the door, any way we can."
When placing motivation in your advert, make sure it's in the headline, the first sentence and the last sentence.
Examples of strong wording for your property adverts...
Headlines (you can combine these with your normal flowery headline for effect):
Vendor ready to meet the market
Owners determined to move - make us an offer
Priced to sell yesterday
Surplus to requirements
You get the idea. Something that makes a potential buyer stop doom-scrolling through TradeMe and take notice.
Our owners have made it clear that they are determined to sell. The bags are packed, the moving company is booked, all that's needed now is you!
Then start listing the benefits of living at that particular property.
Don't let this opportunity pass by. Come and see this home and make it yours before someone else does. Our owners are waiting with pen in hand, ready to sign an offer.
You can tone this stuff down or up to whatever level your owner is agreeable to. But the stronger the wording, the better. It might sound a bit cheesy, but I assure you, it works. Especially when there are hundreds of properties on the market and you need to find a way to stand out from the crowd.
Step 6. Your email database is your secret weapon
In a tough market, most houses aren't going to sell in their first stage of marketing (the initial 2-3 weeks). Most properties will sell after a few months of photo changes, price adjustments, crashed deals and other dramas.
Because of this, you need an efficient way to re-introduce your listing to a wide pool of buyers when the pricing expectation changes and owners become more realistic.
In time gone by, you would achieve that re-introduction by taking out expensive adverts in your local property magazine, but those days are basically behind us. It's hard to refresh your property on portal websites (and buyers often only look at the new listings), so that leaves you with 3 main options:
- Rely on your large team of colleagues to bring a buyer
- Pay for boosted posts on social media (the modern print media)
- Have a large email database
Lazy agents rely on their office team members bailing them out (an unreliable strategy). I strongly encourage you to take advantage of email and bail yourself out. Every time you have a listing that gets a price reduction (or your office does), re-send it to your buyer database. If you can filter your buyers, send it out to everyone who has visited a home in that price range in the last 6 months. I lost count of how many houses I was able to sell using this strategy. It really is the key to success in a down market.
Note: Salespartner is the database system I personally used for this strategy...
If you have a decent-sized database, you have a secret sales weapon in a buyers market.
Plan B: If you don't have a big database. Fish out your old open home registers and call every buyer who has been through a similar property in the last 6 months, to tell them about your (now) sharply priced listing. It will take you hours, but it might have the same effect. If nothing else, that hard slog will motivate you to get your email database in order :)
This is how you add value to your client's selling process.
Do you have a question on how to succeed in this new market?
Let me know and I'll try to cover it in a future post.
For more on my personal story and experience building a business in a challenging market, check out this post...
Andrew Duncan, a.k.a Agent Monday.