JULIAN SAYS: Q1 of 2017 has gone, so it’s a great time to review what is really happening in your business in terms of efficiency and the results achieved, to plan in a logical way any adjustments needed.
One of the key indicators of efficiency that we look at is what percentage of the stock that an agent takes on do they sell? The answers are often vague: “Most stock is being sold”, rather than a definitive, specific figure such as “Sixty-nine per cent of stock has sold, of which 47 per cent has exchanged contracts”.
Estate agents are often shocked that when we look at the detail often only 50 per cent or less of listed stock is being sold. Or less.
Is there a relationship of trust? If the client doesn’t see you as an ally in their moving experience, you’ll fail.
How are you really doing?
A review of all Q1 listings against the following criteria will help you judge what you could be doing to be more efficient and effective.
Listing: When was the property listed and at how accurate a price? Was the original price realistic? If it was realistic then, is that still the case now, given current market conditions? Do you have you the original evidence used to value it? When it was valued, did you use the phrase “based on this evidence the market suggests” or are you held hostage by the fact you said, “I think this property should sell for X.”
Current price: Have any reductions been made? Were the reductions cosmetic (less than 5–8 per cent) rather than effective? It’s crucial to move the property into a range where new buyers can be matched and contacted. What third party proof do you have from other properties you have sold of the type of price reductions are getting movement? In the current situation we must take on properties to ‘test the market’ – are we doing this or are we a ‘list and hope agent’? How will you convey the need for a price adjustment and the relevance of supporting evidence to the vendor?
If this is going to be a shock to them, a face to face conversation will be far more successful than a phone call.
What is the Vendor’s ‘bottom line’ to keep their ‘dream’ alive or solve their ‘problem’?
Dreams: People move because they have a ‘dream’ of what their life could be or a ‘problem’ they need to solve. Are we helping them enough? Does the team know all the details and motivation behind the move? How are the soft facts (feelings, opinions, attitudes) affecting their decisions? Do you know what their dream or problem is – where they want to move to, what they will have to pay? How prices there are changing in the area they are moving to? Fundamentally do they think you are working in their interest when you suggest a price reduction? Is there a relationship of trust in place? If the client does not see you as an ally in their moving experience, you will fail. To do this effectively you need to know their financial flexibility and ‘bottom line’. Sadly, many agents don’t.
Viewings: What would we normally have expected in terms of portal activity and viewing levels? Does the vendor understand that their property is under-performing compared with other properties you have sold? How many offers have been received?
Feedback: What is the price-related viewing feedback? Are we giving specific price-related feedback after every viewing (the viewers’ opinion on the price regardless of whether they liked the property or not)? If it isn’t achieved on over 90 per cent of viewings, you will sell less stock. Also have these discussions been diligently recorded, so they can be used to influence the client as the success of the marketing of their property becomes clearer.
Marketing strategy: Is it working – does it need to change? You should always trade improvements and extra expenditure with a mutual commitment from the vendor to adjust the price if necessary.
Is a revisit required? People only listen or hear 30 per cent of what you tell them over the phone but absorb far more when you physically meet them and are able to use all your presentation skills.
Do we really still want the property? Should we admit defeat that it will not sell or needs a rest? A harsh conclusion but authoritative agents don’t just wait and see or hope things will change.
Remember the first rule: “If you have the best stock of well-priced properties the buyers and tenants will find you.”