Phil Spencer - Reassuring Vendors In A Changing Market

There seems a consensus amongst agents, analysts and amateur pundits alike that the market will stay relatively strong for some months, but that change is coming, gradually but firmly, and that slightly tougher times are ahead.

The Nationwide says there was a very modest 0.3 per cent increase last month with momentum set to weaken as the cost-of-living crisis deepens and wages fail to keep pace. Business consultancy Capital Economics has downgraded its previous forecast to show a 3.0 per cent drop in values in 2023 and a 1.8 per cent fall in 2024.

There is no need for alarm bells to ring but now may be a good time for agents to begin shifting their communications strategy towards vendors.

Back To Basics (in a good way)

Whereas in recent months many agents have told sellers that an asking price was perhaps the least they should expect - Propertymark claims 84 per cent of sellers in March accepted offers either at or over the value they listed at - it may be time to revert to the long-standing tradition of advising vendors that the asking price is the likely ceiling, not a floor.

Likewise, it’s a great opportunity for agents to show off their sales skills.

For the past year it’s often been a case of putting a property on the portals or showing it to an eager list of waiting buyers, and the home was snapped up literally within days.

Now as supply increases and sellers may read increasingly pessimistic headlines about the market, it’s time to reassure vendors that you have the skills and processes to push a sale through even if the cost-of-living crisis becomes a bigger factor in peoples’ lives.

Explain what happens if the property lingers

Vendors sell only once in a decade or more, so your clients today are probably inexperienced and may not understand how much work goes into a sale in a trickier market. What’s more, they very likely believe all homes sell within days because over the past year or so that’s been the experience of their friends and relatives.

So, explain the truth to them - pitch for an instruction based on your service, not your fee or how the market has been in the past 12 months.

Explain how you will indeed put a property on portals and your own website and show it to a list of waiting buyers. But back that up by explaining what you will do should the property not find a buyer straight away: how you will refresh the listing, reassess price after a set period, consider an open house, or whatever technique your strategy suggests.

Sales Progression - the agent’s ace card

Most of all, emphasise to your prospective client that should you find a buyer and get the property SSTC, your real service starts from that point onwards.

Emphasise, if it is the case, that you have a nominated person to chase progress; say that you have long-established relationships with local conveyancers (still the choice of the large majority of buyers and sellers); explain the detail you will put into each stage such as the Memorandum of Sale so that there are fewer questions left unanswered.

In other words, explain that it’s your service and experience throughout the transaction that you are offering, and that makes you a better choice than your rival agents.

The likelihood is that vendors won’t have heard anything like this before.

While it’s not as sexy as the ‘sales’ part of an agency’s work, where you give an asking price and a marketing strategy, when the market gets sticky, it’s showing off your sales progression record and approach that might well win you new instructions.

It’s a potential earner for agents too

That sales progression effort, far from being a below-the-radar drain on resources, could easily be a real revenue earner for agencies that do it well and publicise the fact.

There used to be an industry norm of roughly 12 weeks between sale agreed and exchange of contracts, but thanks to Covid and the stamp duty holiday frenzy of recent times that period has stretched out to 20 weeks and sometimes more.

By putting resources into sales progression there should be fewer fall throughs, quicker completions and ultimately agencies clearing their pipelines more rapidly. That means happier customers, more throughput for the agencies, and a stronger reputation to be spread via the all-important word-of-mouth recommendations from clients.

Change now may pay dividends later

Now I’m fully aware that all this is easy to say and harder to implement, especially with the busy-ness of the market right now. However, we know the current good times may be changing - investment now, and a shift in communications and emphasis to customers - could pay dividends in the months to come.

I’m back next month - enjoy a successful May!

*Phil Spencer is a presenter, author, businessman and property investor. Phil’s consumer advice platform Move iQ, is a website, YouTube channel and podcast. Each preserve and reflect the same impartiality that consumers trust and base their property moving plans. Phil’s Move iQ Pro, is coming in 2022! It will connect select property professionals with Move iQ’s consumer audience. If you’re interested in hearing more subscribe here.