Courage in the Current Market

I spoke recently at an excellent seminar organised by REINZ for rural real estate agents. I saw my role there to provoke somewhat, to challenge their thinking and to review their business practices so that their incomes from their toil might improve. Commercial insanity is continuing to do what you’ve always done and expecting a better result. To address the current market I drew on lots of different and challenging times and experiences, the least of which was not my introduction into real estate in provincial New Zealand in the early and mid-80s when “Rogernomics” was brutally inflicted upon the rural sector. Whilst ultimately good for the sector, the short-term pain was horrendous with many farmers losing their land.

We quickly adapted under brilliant leadership and focused on the most needy or urgent of clients and used strategies to enable them to move on and minimise hardship. We witnessed the start of corporate farming and the transformation of farmers into educated, skilled business people running very serious enterprises. As an industry we need to be equally well educated and skilled, if not better than those who engage us.

Lawyers Mark Tavendale and Gemma Wragg also gave a valuable presentation on the need to collaborate, not just with the legal fraternity, but all parties who will be intrinsically involved in transactions. It’s essential to build robust networks with these fellow professionals.

Their advice dovetailed into mine in terms of how we do business. It has always concerned me that as agents who should be protecting the best interests of sellers, we take properties that are not groomed and prepared for sale and without providing due diligence or comprehensive information, we allow buyers to make sound and irrevocable decisions.

To me it’s a BFO (blinding flash of the obvious) that auction is a most appropriate strategy in today’s market, but it’s not for the faint-hearted and requires great skills on the part of the consultant, and I’m very fortunate to work with some of the best in the business. They take their implied obligation seriously and that is to sell the clients’ property for the best price, to the strongest buyer, in a reasonable period of time.

And they know the only way to guarantee that result, is to give all potential buyers the opportunity to inspect and make their best offers. They know that market value is what an informed buyer pays a willing seller after marketing and that premium is what the same buyer pays with the force of competition driving them. They know their job is to market extensively, cast the net far and wide and then to set competitive forces alight amongst all interested parties. Let buyers negotiate in an upward fashion to beat off other buyers, not negotiate in a downward spiral against their client sellers.

Before campaigns get underway, they collate every scrap of information that buyers will need to make unconditional offers, they assist in removing all obstacles to a sale, presentation is paramount. They are great marketers, they excite buyers, not appease sellers who want to move on. (At the risk of offending many, the rural real estate adverts I see are dull and boring and we wonder why response is limited).

Great real estate professionals distinguish themselves in the crucial areas of marketing and negotiation. Remember the generic purpose of marketing, and learn from the best, the giants in the retail industry- marketing is designed to grow the number of prospects for the particular product. You need to stimulate an otherwise dormant or difficult marketplace, make your phones ring. Many of the adverts I see would restrict excitement exclusively to those clipping the ticket for the outlet doing the marketing! Your role today is to drive potential buyers to your listings, engage with them to put them in the mindset of the next owner of that property, and get them to fight others for ownership.

The role of your auctioneer is wholly and solely negotiation, they are consummate in this area and enjoy a credibility and third person objectivity that enables them to do what realtors with a huge fee at stake are unable to do.

This is a time of challenge for the rural sector, but there are ALWAYS owners looking to move on. Get alongside these folks, be meticulous and comprehensive in your preparation, engage the right strategy, AND the right auctioneer and you will forge a formidable reputation that will continue to pay huge dividends.

Phil McGoldrick Freelance auctioneer and real estate trainer

Phil can be contacted at philmcgoldrick@xtra.co.nz