Managing vendors' expectations in a changing market

In a changing market, it is crucial for real estate professionals to communicate with vendors and manage their expectations around price and how quickly a sale will happen. Your REINZ Regional Ambassadors share their advice and strategies on best practice.

Tania Greig

Head of Academy & Network Performance Coach, Harcourts Auckland

REINZ Ambassador for Auckland

It is vital for agents to have a strategy for the listing process that is focused on helping vendors understand that the high prices achieved at the end of last year may not be attainable in the current market. Managing owners’ expectations is a key part of the strategy and is easier if the relationship is based on trust and professional respect from the beginning.

Your clients must feel you are a team and that you have their best interests at heart — that will enable the most effective sale. To create this level of trust, use the words ‘we’ and ‘our’ rather than ‘you’ and ‘yours’.

Part of your listing conversation should be uncovering their perception of the current market and how they believe it will impact buyer enquiry and the sale price. Be cautious with what historical data you present, list with facts and sell on emotion. It is essential you educate them about investing in a quality marketing campaign — this is where you can put forward your skills as a marketer and negotiator.

To look for buyers, trail back through your database and call every buyer you have interacted with in the past 12 months. Make appointments with those who have not yet bought and provide your best customer service so they want to keep working with you.

Buyer feedback for your vendors is essential. Let them know you’ll be giving them honest feedback from the market. Ask buyers directly, ‘What do you think a property will sell for?’ — worded this way, you will get an objective opinion from them. Share this with your vendors in your reports and at your meetings.

Keep track of what is happening around your listing and ensure your vendors know how much similar properties are selling for during their campaign. You should also keep them informed about new stock that has come to the market that they will be competing with.

If a listing price needs to change due to feedback, ensure you market this change widely and inform buyers again. This will show your clients the increase in activity is a result of your honest discussions with them. Always refer to a change as price movement not a price drop.

You may be spending more time working with your clients and customers than you were previously, however, ensure that every working day includes some lead generation activities to protect your future business.

Darryl Marshall

Vinig Realty Group Ltd, Bayleys

REINZ Ambassador for Nelson

Agents should inform vendors of the active purchaser demographics of their specific marketplace and how that directly reflects on their expectations.

The luxury of selective vendor timing — strategically choosing when a property is brought to market — can be an advantage for some. Factors such as season, tourist/ visitor volume, recreational and agricultural are all buyer elements that need to be addressed by the agent providing different vendor property classifications and price expectations. Past local knowledge that can be substantiated and future local knowledge that can be assessed provide an informed platform that is even more critical to vendors in changing times.

Sales strategy: auction, tender, deadline, etc. all have a market presence that need to be expertly assessed by an agent in conjunction with the level of relative buyer activity. It is essential to reflect the specific property and the target market group in your strategy as that will further impact the vendor’s expectations.

Constant communication with vendors remains essential for an agent to ensure sellers make an informed decision and achieve optimal market results.

Rachel Dovey

General Manager – Sales, Whalan and Partners Ltd, Bayleys

REINZ Ambassador for Christchurch

Communicate with your clients well and often — it can be challenging when open home attendance is lighter, and properties are on the market for longer periods of time. It is important to reassure vendors and provide practical feedback with face-to-face meetings.

Think about modifying parts of the campaign to get a different result. Traditional campaign methods that have worked in the past may need to be reviewed, improved or tweaked.

With an increase in the numbers of properties on the market, salespeople should be advising their clients to prepare and present their homes to the highest standard possible, so they stand out from others in the market.

Prepare well, thoroughly check the LIM and any building reports. If there are potential outstanding issues, ensure that they are remedied prior to coming to the market so you remove any potential objections from buyers. Make it easy for buyers to connect with their potential home.

Andy Stewart

Residential Salesperson & Company Auctioneer, Professionals, Palmerston North

REINZ Ambassador for Palmerston North

Sales consultants appraising properties need to ensure that comparable properties used in the appraisal are recent and relevant. Historical sales may be misleading and inflate seller expectations. Current competitive listings on the market are now a more relevant factor in establishing an initial marketing price.

Vendors should be aware of where their property sits in comparison to comparable current listings, and the options available to them for marketing a property to achieve a successful sale. This is to ensure that their property is competitively priced to avoid it being left on the market while other properties sell.

Once the property is listed on the market, honest, accurate and factual feedback from the sales consultant to the vendor is vitally important. The hard conversations regarding marketing progress and pricing need to be discussed early so the property is competitively positioned to sell.

Vicki Collins

Salesperson, Property Specialists, Wellington City Real Estate Ltd

REINZ Ambassador for Wellington

Those of us who have been in the industry a while have seen the property market ebb and flow. The market is cyclical and will inevitably turn again. The key is to put the hard yards in now so you’re still here and ready for when it does.

So how do we work in this market? The answer is, the same as any market. You stick to the basics, and you work smarter, harder and a little longer to get a result.

Motivation needs to be identified. Houses will always sell if people are truly motivated. People look to move for many reasons — a change of circumstances, jobs, retirement, relocating, downsizing or upsizing. Take the time to find out why they’re looking to sell.

If their motivations aren’t strong enough, manage expectations and suggest now may not be the right time to sell. That doesn’t mean walking away — stay in regular contact and give them advice on how to prepare their home so that it’s in the best condition when it is the right time to sell (which will keep your name top of mind).

It’s all about managing expectations and getting them to set realistic targets — the market isn’t what it was, but we can still achieve a result if they really want one.

When the market is booming, we’re so busy working in our business that we don’t have time to work on our business. Take the time to implement a lot of improvements you haven’t been able to do previously due to time constraints.

Work on professional development and improving business practices and processes so that you can work even better once the market turns again.

Charlie Elley

Manager Consultant, Licensed Branch Manager, Property Brokers West Coast

REINZ Ambassador for West Coast

Agents who have been in the game for longer will understand this cycle and what it means for them and the vendor. For those fresh to the game, it is important to be prepared for change. A significant part of dealing with change, is acceptance at an early stage and adapting to a new way of doing business.

First rule — don’t panic. It’s harder than it seems — some buyers will feel your fear, and this will also impact their approach to you as an agent, and the purchase. Second rule is confidence — not based on recent success, but off the back of gaining an understanding of what lies ahead. This is the perfect time to increase your profile to be seen and be remembered.

Educate your vendors on the new reality and lower their expectations — it is vital to not hide behind false expectations or promises you cannot keep. After having these harder conversations, you can establish a new selling point and aim to exceed it. Work as a team with your vendor and together you can achieve what others may not.