Sales are happening, pipelines are growing but taking longer to exchange and complete. The risk for an estate agency business owner is therefore also growing. Fall through rates inevitably are under close scrutiny as more and more resource is being targeted at driving through existing sales to completion.
So, sales negotiators are focusing on every opportunity and are remarkably busy selling, sales progressors are busy chasing sales. Managers and valuers are busy converting every opportunity on the market, the desire for new listings insatiable and everyone is quite rightly shouting very loud about it. We are busy! Fantastic! A perfect storm – houses come on, they sell, and the pipeline grows.
However, as we all know the eye of the storm is renowned as a calm and tranquil place, yet for some the centre of the storm could get quite unsteady.
Managing vendor expectations
Pre lockdown, many vendors accepted that it may take a moderate amount of time to sell a property, many even appreciate they may not even sell. This however has changed in many circumstances. As agents boast about how many they are selling, and people clearly see the market busy, the tolerance from some vendors is wearing increasingly thin.
They are now expecting activity and results in a noticeably short space of time, if not immediately despite agents only recently re-engaging teams full time and now heading back into further restrictions.
The increasingly desperate rush for transactions to be completed within the Stamp Duty window will only increase this pressure as the deadline to agree a sale actually approaches faster than we think.
The Stamp Duty window has created environments whereby prices have even been artificially increased as a result. This could then cause pricing issues and market slowdowns once the Stamp Duty holiday subsides with vendors expectations unrealistically raised.
Withdrawal rates and complaints are in many cases starting to rise as vendors begin to lose patience at not having sold and start to look at changing agents.
The problem with this is three-fold, firstly we forget it actually costs both time and money to acquire a listing – agents do not know how much it actually costs and if you did the calculation you may make different decisions. Secondly if you do not offer good service and deliver results then this creates more people who do not rate your service.
Thirdly, it is well known that the second agent can be the selling agent and as you go through a process of pre-marketing at too high a price to prove it cannot be sold at that level, to then give a frustrated vendor who will do anything to sell, to a competitor. They listen to the new agent’s advice; reduce the price and bingo you inadvertently make your competitor stronger.
Vendor management is one of the most important parts of the journey and it is area which when we come under pressure we will often neglect, jumping instead for the instant deal. Managing expectations has always been a challenging point for many agencies. Reacting constantly to the deluge of activity means several clients were finding it increasingly difficult to keep on top of things. Less successful competitors now starting to raise the pressure further and take properties away from them. Properties they had spent considerable time and money listing and marketing.
“We are too busy!” “I have not got time!” – words I hear every day and justifiably in their minds, but sometimes this is because they have slipped into running a reactive business rather than a proactive business.
The biggest complaint from most vendors is lack of contact and having to make a reactive update call from an unsold, frustrated, concerned or even complaining vendor will often take you at least 20 minutes or so to appease them, justifying what you have done and then the promises you make to rectify the issue and get the house sold which then takes even more time.
Like many things in life a large part of the answer can actually be amazingly simple.
I asked them to diarise three slots to a maximum of 10 minutes in the office diary as a recurring appointment every day and make a simple commitment to religiously make three targeted vendor update calls a day of just five or six minutes a time.
That is just one phone call per staff member per day in the average sales office in less time than it takes to make a cup of tea, which, if applied religiously, is actually enough to control and manage your live stock in an effective manner.
They would now be updating each vendor with a proactive, prepared, and controlled call and updating all of their live current stock every seven to ten days, reducing the requirement for additional work, reducing the stress and affording the opportunity to buy the time needed to make good on the investment they have already made.
When things get busy it’s easy to let the foundations of your business fall, and the desire to chase every new scrap of business overrides all sense of control.
Sometimes ploughing and planting the field at your feet brings greater returns than chasing the crock of gold at the end of the rainbow…