For many years, it is fair to say that Real Estate agents have been operating in a “sellers market”.
Post “Covid-19”, what will the Real Estate market look like?
There are many thoughts on this. Obviously it will be changed. There will be job losses, and more unemployment, and it will be a different world we walk out into to once we have found a vaccine for the virus that has caused a worldwide pandemic.
There could be more buyers in the market too, those retirees who have to survive on their lifetime savings which are no longer giving a return. Or those returning to their countries of birth to be with family from the UK and USA.
In a “sellers market” our sellers have been rewarded with many buyers often competing against each other in a tight market with an “under supply” of property. This has pushed prices up.
Currently under some countries “lockdown” rules , to show a buyer through a property is quite challenging.
For instance, in New Zealand, in Level 3 Lockdown, only 2 buyers were allowed to be shown through a property per day, and there were strict rules of 2m distancing to be upheld and stringent health and safety measures being enforced for the safety of everybody.
Buyers will need to be qualified extremely well, firstly, with relation to their health status, but secondly, due to the fact that their “pre-approval” for financing the purchase might not be necessarily the same as it was prior to Covid-19, as the banks come to terms with the economic changes which are occurring daily.
For those salespeople who have been used to doing “open home after open home” with very little interaction with their buyers other than a follow up email, until “Tender or Auction day”, they could find it difficult.
The 4 person sales teams who run many listings at once might find it frustrating perhaps?
The salespeople who have worked in many markets, but perhaps who have thrived in a buyers market will do well. In some countries of the world you get more for selling a property than from listing a property.
The market that I learnt to sell Real Estate in was a “buyers market”.
I enjoyed getting a buyer into my car, after qualifying them, and showing them 6 properties. I would do this several times a day with several buyers. Commission was structured a lot more fairly back then, favouring the selling person not the listing person.
Working buyers meant that you would have to know the company housing stock off by heart and be able to quote and show features and benefits of each house on your books.
We would have hundreds of listings on our Company’s books and would perhaps only advertise two or three a week and then show buyers a good selection in the same price range of the one that we had advertised that they had responded to.
It was hard work, but very rewarding, and the experience meant that your buyers became your sellers down the track, that is, if you had done your job right and you had used the time to build the relationship with them, while finding them a home.
Some salespeople would rather to openhomes for many buyers to attend at once, than doing one on one appointments.
For me, I have always held “viewing by appointment” as my preferred choice of showing buyers through a property.
When I emigrated to another country and began selling real estate again in another part of the world – the onus was on “listing” where you got the bulk of the commission.
I still preferred the “one on one “appointment, and continued to work with my buyers, understanding that the buyer became the seller eventually.
It is always more time consuming in a busy market, having to show many buyers through on single appointments each day, but it is rewarding in many other ways, establishing a rapport with them, and often being able to qualify their buying decision is paramount to a successful sale and purchase.
This is a better process in order to understand their buying motivation, likes and dislikes. By providing a better service to them enables better feedback to the seller, which is very important so that the seller can “meet the market that they are selling in” and often reduce their time on the market, thereby not land up selling for less after many months of disappointment.
It is also about being respectful to the buyer, who if you think about it, is spending a huge amount of money and being asked to spend very little time inspecting a property at an open home with dozens of others, giving them very little time to make an informed decision.
An open home might also be a time when negative comments from other open home attendees who have own agendas could put cashed up buyers off. Perhaps the buyers making the negative comments want to get the price down or perhaps they are a neighbour or somebody who has a dysfunctional relationship with the seller. It happens.
Sadly, buyers do miss out in a sellers market as the supply and demand factor becomes very relevant.
Now in a buyers market, things become very different. Buyers will be the ones who will be nurtured.
For now though, it will be a matter of months before the real effect on the market will be felt after Covid-19 in many countries.
There could be many sellers sitting tight as they reflect on their losses in the shares market, or perhaps their tenants in their investment property are still able to pay their rent with the Government subsidies being rolled out as each Government comes to terms with the fact that many businesses could fail due to the pandemic.
Many people with home loans will have secured a repayment holiday, and that effect will not show through for a few months.
It will be a “wait and see” for most I suspect. But perhaps moving forward “viewing by appointment” and not mass inspections through open homes might become the new norm.
It would not be a bad thing would it?
Buyers would be treated with respect and sellers would benefit from the feedback of the true value of their property in the market that they are buying and selling in.
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