How to handhold vendors through a long sales process
Navigating a cooling market
“My agent was really hard-working and always positive, but by the end of selling my parents’ home, a painful four to five month period, I just needed some space from her. Those weekly calls after the badly attended open homes were just soul destroying.”
So says Wendy, a vendor whose buyer took over three months to take their offer unconditional, having to sell a property first. Wendy didn’t blame her agent but the stressful process left her drained and exhausted. Would she use that agent again? Absolutely, she did everything right, but it was a traumatic process.
Any agent active in the current market is familiar with the scenario of fielding offers from buyers who have a property to sell. It’s not ideal but the price is right and there aren’t a whole lot of other offers coming in so you hang on to them and advise your vendor to accept it. Then the days and weeks go slowly by as you both wait.
Meanwhile, the open homes still have to happen, you regularly report in to your seller and by the end, you and your vendor have probably seen way more of each other than you had counted on. But if you want to do business with this homeowner again, you’ve still got to try and make this as positive an experience as possible.
According to Nicki Cruickshank, senior agent at Tommy’s Real Estate in Wellington, around 70% of all sales in her Wellington office are subject to the sale of the buyer’s home at the moment.
“The only people who are moving at the moment are people who are scaling up or down so they’ve got a house to sell,” says Nicki. The banks won’t give them bridging finance, so, in most cases, their offer is subject to sale unless they sell first.
A good agent will be constantly in touch with the buyer to see how their house sale is going and to keep the vendor informed. She says vendors need to know a process that once took three weeks is now taking more like eight to 10 weeks, she says.
The agent says she’s seen vendors get “fairly stressed” in recent weeks as they wait for deals to go through. There haven’t been enough buyers out there, and the volume of houses in Wellington on the market has been up 180% on the same time last year, says Nicki.
“If the buyer’s house isn’t selling, then it’s usually for one of two reasons, it has something wrong with it, or the price is too high and the sellers need to be more realistic,” says Nicki.
Some agents will try to “buy business” by saying that they can get a certain price for the vendor but that may not go well in this market.
“The housing market has gone back to normal, it’s a tough market but everything will sell,” says Nicki.
Communicate, communicate, communicate
Emma Duncan, an experienced agent with Anne Duncan Real Estate, understands the situation of a protracted sales period well.
With many offers conditional on sale of the home first, the selling process for the original home can be up to 16 weeks in her market. Her advice to agents trying to nurse their vendors through this lengthy process is constant contact.
“Number one in the game at the moment is communicate, communicate, communicate,” says Emma.
Her office has just finished selling a few properties that had been lingering, Emma says, “Buyer numbers are down but buyer quality is still strong, I’m still writing up multiple offers, it’s still a good market, it’s just different,” she says. And this is something she’ll be telling vendors, giving them heart. New buyers are appearing every day, she adds. People always need to buy and sell property no matter what the market.
Another thing to convey to your vendor is, once you get a property under contract which is subject to the sale of a house, you don’t give up, you’re still actively talking to buyers, trying to get new offers. “It doesn’t stop until they’ve paid the deposit,” explains Emma.
Being an agent is a highly skilled role, you need negotiating skills, psychology, you’re reading a buyer and there’s always difficult conversations to have, she adds.
Be empathetic with your client, she advises. If you feel that the ongoing sparsely attended open homes are distressing the vendor, listen to them, stop the open homes, and do viewings by appointment only, suggests Emma.
“Relying on a good solicitor’s advice for extra support can be a good idea, especially one who’s been doing this for a while and seen all sorts of markets,” she adds.
As for that pool of buyers, which may seem smaller than usual in the current quieter market, there are ways to “invent new interest” in a home that’s been on the market for a while. You can rest a property then relaunch it with new photos, advertising and perhaps changing the method of sale, suggests the Anne Duncan agent.
Houses will sell, says Emma who has been in the business over 16 years and works with her mother, Anne. She remembers Anne auctioning one home three times before it successfully sold during the Global Financial Crisis in 2008.
“There’s always a buyer, it’s important to have faith and be patient, it’s still a good market,” says Emma.
Thinking outside the box in the current market
Ray White Pt Chevalier director, Derek von Sturmer is a strong believer in thinking outside the box in a market like this where buyers lack confidence, don’t feel in a position to buy and feel anxious about overpaying.
He will frequently hear from potential buyers: “Yes, I would be keen but sorry I”m not in a position to offer because I haven’t sorted the finance and need to sell.” For him, it’s about digging deeper, understanding their personal situation and what they want to achieve, and seeing if he can help.
“What we’ve been doing is almost like putting pieces together in a puzzle,” says Derek. One property coming to the market can throw up four or five other opportunities to help people buy and sell, he explains. Whenever he lists a property in these times he likes to map the process out to see if it’s possible to match them to any of his recent appraisals.
If you think, for instance, of a buyer for a home you’re selling, and use your database to find a buyer in turn for their home at “x price” rather than going through the process of putting their house on the market, an agreement could be made quite quickly. Organising a house sale without bringing it to the market will save the conditional buyer three or four weeks, says the Ray White agent.
While agents will usually talk about the importance of getting as many people through the home as possible during the marketing period, that doesn’t apply in this scenario.
“You need to put egos aside. If I can make someone’s life better, say they’re living in a small three bedroom home, the kids are sick, they’re working from home, they just need a bigger house, it’s about how can I find someone to solve that problem for them,” says the agent.
The most important thing to understand with buyers at the moment is that whether the market is going up or down is totally irrelevant for them because they’re buying and selling in the same market, he says.
Derek remembers sitting in a cafe chatting to a local dad who told him he was thinking about bowling their small house and building a new home, a big task for a young family. The Ray White agent said he had a house just round the corner which would suit the family, they went through it and he loved it. His wife saw it the next day, put an offer in and on the same day Derek sold their house because he knew someone who would like it. The couple were so appreciative of his thinking outside the box, he says.
This works when you are a good local office and you have a very big database, says Derek. ”Using a local agent with (a good) market share of homes for sale means you have access to more buyers, “ he explains.
How to keep clients happy generally
The biggest question for agents at the moment is how to keep the client happy, says Craig Lowe, managing director of Lowe & Co in Wellington. Selling a house is a big change and one of the most stressful things you can go through at the best of times.
Vendors are having to change their price expectations, it’s harder to find a buyer, and an appraisal meeting can be a sensitive process, he explains.
“One thing that separates great agents from good agents is their ability to deliver a frank assessment in a diplomatic and appropriate way,” he says. There’s a temptation as an agent to not want to make them feel bad but you don’t want to misinform them. “We’re just a conduit for the market,” says Craig.
“You’ve got to be able to “not protect them” from the bad news in a way but to be on their team. Good results happen when sellers and agents work together against the market,” he adds.
Meanwhile, contact can’t be a once a month thing, this is a time that calls for regular touch points and face to face meetings, even if nothing is going on, says Craig.
Lowe & Co only has experienced agents and he’s glad, at a time like this, with a real flight to quality agents by vendors.
Find an experienced agent in the office
Having been in real estate for decades, UP director Barry Thom says he’s giving his agents lots of advice at the moment on how to cope with a slower market where buyer confidence is down.
“Fear has gripped the population,” he says, with buyers not wanting to buy when they think the market is still going down but they may miss a wonderful opportunity, warns Barry.
He believes the market is through the worst of the price falls and the business of waiting for the bottom of the market is always fraught.
“Whether people buy this year or next, homeownership is a fundamental building block for creating a future,” he says.