After so many years of doom and gloom surrounding the property market, positive media messages are somewhat refreshing. Unfortunately, these can rapidly recalibrate client expectations and bring new kinds of challenges to estate agents.
While there is a degree of evidence to say that the market is picking up and prices are edging upwards again, this is not the case everywhere and the figures being reported are a national statistic (often based on somewhat spurious methodology such as a sample of mortgage approvals or homeowners’ opinions). For vendors to react by asking inflated figures, upping their existing asking
prices or dogmatically turning down offers less than asking price is potentially an unwise approach for many.
It is crucial to recognise that we must manage and monitor the expectations of clients from day one through to the day they move. The central relationship that must be in place between agent and client is one of trust. Studies show irrefutably that trust is the most important element in a vendor’s decision making process as to which agent they instruct. It follows therefore, that that the level of trust must be maintained throughout the process otherwise the client will rue their choice.
A relationship of trust creates a platform for you to influence the client. In short, if the client trusts you, then they are likely to see you as their mentor in the process and therefore take your suggested course of action, rather than being blindly led by the media.
Trust relies on a number of key elements including knowledge and authority. Think about the professional people you trust, such as your doctor. If you are unwell and your doctor advises a specific course of action, you take it without hesitation. Why? It’s because that doctor has displayed knowledge and authority and built a relationship of trust.
Clients can be swayed by media reports of rising prices.”
So, in similar fashion, we must build and maintain a relationship of trust with our clients to ensure they listen to us without question, rather than the media.
Take the example of the client who has read or heard in the media that prices are rising and therefore wants to ask more money for their property than is achievable, or wants to turn down an offer that they really ought to consider accepting. Your suggested course of action may be the opposite of these. Ask yourself this question: Who are they most likely to be persuaded by, the media or you?
Exceptional knowledge and authority on your part will massively increase the chances of the answer to that question being the one you want it to be. If a client is being swayed by a media report, you need to contextualise it, contradict it or crush it. Knowledge is your key attribute here. If the media reports on a house price index and your client has read it, you need to know both the content and, as crucially, the methodology behind it.
The plethora of property price reports are a thorn in the side of agents – largely because they don’t always reflect reality and also because there are so many of the damn things. On top of that, there is the issue of the manner in which they are subsequently dissected and interpreted in the media.
The Nationwide House Price Index recently reported that prices had gone up by 0.9 per cent year-on-year, but down 0.1 per cent month on month. This report was then responsible for a wide range of headlines over subsequent days – “House Prices Up Again”, “House Prices Slip” and finally “House Prices Hold Steady”. These are all rather confusing for the public, bearing in mind these were headlines generated by one single price report.
However, any client reading the positive spin could be forgiven for thinking that they should expect an inflated figure for their property despite the fact that this is far from a realistic course of action.
To be able to continue to advise and influence your client, you need to know the specifics of how these reports are compiled and their weaknesses.
All residential property price reports are flawed – you need to fully grasp the detail of such flaws.
I have compiled a list of all major house price reports and their methodology – please contact me at firstname.lastname@example.org and I will forward it to you. Beyond this, you must have watertight evidence of what the market is doing in your region, town and even local estate or street micromarkets. This is the knowledge that will ensure you are trusted by your clients.
“Knowledge is power” is an adage we all recognise – it follows that “Ignorance is bliss” is a much more questionable one.
Julian O’Dell is founder of TM Training & Development