I'm hearing that in many locations, owner-occupier buyers have all but disappeared, leaving property investors as the main (and sometimes only) buyers for committed sellers to deal with.
Dealing with investors requires a special skill-set all in itself. One you might not have had to focus on over the past few years, with this demographic mostly priced out of the market up until now.
Get ready for drawn-out negotiations and extremely cheeky offers :)
Following the global financial crisis in 2008 (the last big property crash) investors were the life-blood of our sales business. They kept the offers coming, which kept owners engaged and created social proof for nervous home buyers that the market was still ticking over.
In a market like this, investors are critical to your success.
I've listed my key takeaways on working with investors below, but I encourage you to check out the podcast if you can. In the audio version, I dive deeper into each point and provide examples and scripts you can incorporate into your business.
Click here to listen (21 mins)
Offers are the key
To achieve any sort of meaningful progress on your listings in any market, you need offers on paper.
- Offers are like lottery tickets. You don't know which ones are going to win.
- Offers help educate your owners on current market value.
- Offers keep your owners engaged in the selling process. They give you something to talk about.
- They encourage other buyers to take action (social proof).
- They keep you busy and engaged and in a positive mindset.
- Without offers, you definitely won't make any sales.
- Some of them will end up proceeding!
Without offers you're just guessing when you offer pricing advice to your owners. Offers, even if they are cheeky, give you a reference point to work from.
Here's one of our feature articles that might come in handy right now...
Want more offers? Be nice to investors
The easiest way to secure offers in a challenging market is to work with investors. But to avoid burnout and frustration, you need to understand the value exchange involved and approach your investor interactions with the right mindset.
- Property investors want and need to make lots of offers (it's the volume that matters). They've read all the books telling them to view 100 properties, make offers on 10 and get 1 accepted.
- Investors don't want the hard sell. Remove your attachment to the outcome so you don't get disappointed when they come in low.
- Investors look at properties dispassionately and decide quickly, which is great for you as it saves time and gives you a quick answer.
- Investors are quick to make offers (another bonus).
- Those offers make future offers from other buyers look way, way more attractive to your owners.
- Investors can become clients for life which could lead to huge commission opportunities down the track.
- Most agents treat investors with disdain. It's easy to become their agent of choice if you understand how they can help you succeed.
Tips for working with property investors
- Don't get drawn into long discussions on why the owners should accept less. Keep your eyes on the goal, which is to secure offers. Try this script: "Bearing all that in mind, where does the price need to be to interest you? Let's put it on paper and give it a go."
- Get used to the fact that you are going to write up a lot of offers that don't go anywhere.
- Communicate with investors via email to save time. Work face to face once you are less than 5% apart.
- Prepare your owners in advance. Tell them if the offer is crap before you go round to see them. Don't get their hopes up! Use any low offer as an opportunity to have a review meeting.
- Take deals to your investors. Be proactive with other agents' listings that have had major price reductions. Investors love hearing about opportunities the general buying public might now be aware of.
- Join your local property investors association to meet potential investors, local tradespeople and potential future vendors.
- Be thankful for every single offer. Don't be a price snob. Most agents will be rude to investors who make cheeky offers. You can stand out by being respectful and courteous. Isn't it great to have something to work with?
Remember - work creates work. Stay busy, stay positive, and the sales will come.