How agents can support buyers and seller in uncertain times
Agents are helping home buyers and sellers make decisions in an uncertain market
Our State of the Nation report for 2023 found that homebuyers were understandably concerned by some very real issues, of higher interest rates, the rising cost of living and falling property prices. At the same time home sellers are aware it takes longer to sell a home in the current market which is undeniably stressful, but once they sell, their money goes further than it used to for their next property.
For those at the coalface of this tricky to navigate housing market, real estate agents who are putting a lot of time and effort into helping property owners and buyers decide what best suits their situation will do well.
As an agent wanting a long and fulfilling career, you’ve got to tread carefully when sitting down with sellers or buyers in this market. The conditions have to be right for them and you need to find out what’s driving their decision to buy or sell. Your job is to provide them with all the information they need to take the next step.
It may be that you end up advising them not to sell, and they’ll come back to you at a later date. If you’re upfront and honest with them, show you have their best interests at heart, they’re likely to stay loyal to you in the coming years.
This is a time when, as an agent, you’ll be using your empathetic, listening side rather than your sales side.
What agency heads are wanting to see from agents
We spoke to real estate agency heads ready to support their agents – this isn’t their first rodeo of a downward cycle –and they’ve got plenty of advice for their agents on how to handle clients stepping into the unknown this year.
According to Harcourts Managing Director, Bryan Thomson, the key for both buyers and sellers in an uncertain market is to find an agent who can supply both factual information on market activity, put this into a context, and communicate in a manner that ensures understanding and trust.
To agents, he says look at what’s motivating your clients. “The vast majority of buyers and sellers are making their property decisions to move on in life, for a bigger house, a smaller house, a new location. These are long term life-changing decisions, not “get rich quick, time the market decisions”, he stresses.
Everyone understands this, but a great agent can put this into context, explaining short-term market fluctuations as “almost irrelevant,” and giving buyers and sellers the confidence to take action while others continue to put their lives on hold.
“The old adage says you should be bold when others are timid, and timid when others are bold,” says Bryan. “Right now the timid are the majority so consumers should find an agent who gives them the confidence to go against the majority and be bold.”
While rising interest rates might be holding buyers back, the Harcourts MD notes, when interest rates were at historically low levels, people were happy to borrow even though they knew such rates couldn’t last. “Now that rates are higher, people are in less of a hurry to borrow, even though it stands to reason that rates are likely to stabilise or reduce over time.”
Have your agents pre-framing scenarios
It’s all about pre-framing different scenarios for buyers and sellers, says Johnny Sinclair, Bayleys National Director - Residential. Agents can talk to the vendor about the strategy at an auction, where they want to filter out and deal with unconditional buyers only, and then if the property is passed in, start talking to conditional buyers who are happy to pay a bit more.
“It’s about explaining that having an auction is not about a home necessarily selling under the hammer, the rationale is that it’s the process to the best possible outcome,” explains the director.
Bayleys is achieving an average of 43 days on market before selling which the company is proud of. Its secret is it “runs campaigns very hard,” says Johnny. “You get the value that the vendor wants, but they have to accept that the marketing campaign is to spread the net wide. In a tough market, we need to be able to get vendors to invest in marketing,” he says.
Then with buyers, it’s the same “pre-framing process,” so finding out about their funding is critical, says the Bayleys director. Agents are talking to buyers up front, about their finance? It can take two to three weeks, so it’s about getting them in a position to be a buyer who can make an offer.
What agents should be doing in an emergency
If you’re an agent in a cyclone-hit region or one that’s had bad flooding, Ray White Chief Agency Officer Treena Drinnan says agents may be going through issues with their own property.
But when helping others in their community, it’s about having empathy, sympathy, compassion and understanding about what people are going through, that’s key. From her point of view it’s about ensuring sales people are well-armed with the information and data, and that they’re in “the now,” so they can talk specifically about what they’re seeing.
“We don’t forecast, we don’t predict, we only play what’s in front of us. In terms of recovery after flooding, it may mean they’ll be making recommendations around repairs and remediation prior to revisiting the market, “says the CAO.
It may be that the agent advises the vendor not to sell, but they should be mindful of the fact that not everyone has the ability to do that, cautions Treena. It may be that time's not on their side if they’re moving to the UK and have to make decisions now.
Keeping your vendors informed daily if possible
The market of 2023 is one where agents really earn their money, says Joe Nidd, owner of Nidd Realty in Dunedin. With so many variables in flux in the housing market at the moment, the best thing an agent can do with a vendor is keep them “super-informed,” he says.
“You’ll be providing them with what else is selling in the area, giving them daily updates of any inquiry at all,” he explains.
You may not sell on the deadline date but as long as people feel informed and still in control, that’s the important thing, he says.
“It’s about being constant, making people feel empowered in a situation beyond their control, managing them day to day and holding their hand,” says the agency owner.
It’s about managing expectations and preparing people, adds Joe. It might be that they’ve sold at a price that they might have achieved at the beginning of 2021. For a lot of people who’ve been in that property for 10 years, yes they’ve missed the peak, but they’re still happy with the result, he says.
Advising on conditional offers
This is a market with more unconditional offers and an agent will earn their money digging into these to see how serious the buyer is and how swiftly they’ll work through their conditions.
“It’s really crucial for an agent to work hard qualifying the buyers. They may look identical on paper but it’s the information that the agent can garner which can do a lot to judge the quality of the offer. One person’s three day finance clause can just need a tick from the bank, the other may not have even started their conversation with the bank, says the agency owner. The next one, they haven’t had a property appraisal and might think it’s worth $200,000 more so it’s a huge amount .
“A skilled agent is the difference between being sold or sitting on the market,” says Joe.
For those agents who’ve been in the market 8 to 15 years, they know the importance of being really honest and not rushing clients, he says. They know things will always improve and they already are in 2023.
“At the end of last year interest rates were the biggest uncertainty, people were frozen with fear, they stopped transacting, now there’s a renewed energy, a light at the end of the tunnel,” says the agency owner. “People are not so worried that they’ll get into the loan and be crippled from interest,” he adds.
How agencies can support their agents
Real estate agencies need to be giving their agents plenty of attention in the 2023 market, agency heads agreed.
A good organisation will make sure their agents are prepared for whatever they might face, says Harcourts’ Bryan Thomson. “It’s about making sure all sales consultants have a sound business plan with targets, goals and structured activity that has been proven to create success.
Alongside this, there should be a skills-based training regime to ensure exceptional service and results. Hard work and technical expertise are the combination that lead to success, he says.
Mental skills coaching is another key segment agents should have access to, adds Bryan. Agencies have to ensure that the team has the structure and mindset to match their skillset so they can perform, throughout the fluctuations, in their commission and sales-based role.
At Ray White, Treena Drinnan says agents have an internal trainer. “We train on what we’re seeing in the current market, how to overcome barriers in the best interests of all parties, giving agents the skills to operate to achieve listings and sales.
“In the previous market anybody could have sold but in the current one, if we don’t equip them with those skills we’ll see an exit of agents,” warns Treena. The 31 March real estate licence renewals will be quite telling, she adds.
Agents learn skills like overcoming objections. If it’s unpleasant news they’re delivering, agents can only be honest about the market feedback. “We’re responsible to provide clients with honest feedback. And the market dictates the price, not the agent,” stresses Treena.
Ray White also works on helping agents with financial fitness and well being, she adds. A sales person, business owner, in a good market, can overextend themselves whether with a bach or a car and suddenly their income is affected quite severely in tougher times.
“It’s about being able to make changes before it’s too late,” says the chief agency officer.
Frank discussions at the office
Nidd Realty’s Joe Nidd, who coaches his agents, has weekly team sessions on whatever people are having difficulties with.
These team sessions are opportunities to upskill, it’s why it’s really good at being part of a team. “Everyone has the same challenges and can support each other. I receive a lot of information and can facilitate a discussion, “ says Joe.
His office is talking a lot about buyer behaviour, what’s getting buyers through the door and what’s worked in certain price bands. There is access to external coaches but if there are people in the office with 15 to 20 years experience, working on the front line and you can foster an environment of sharing, then everyone improves, he maintains.
Top Tremains agent and mentor, Brent Bastin from Tremains, Bay of Plenty says his office is also big on training, upskilling on things like negotiating in this market.
“They’ll address the elephant in the room that people are angry, upset and frustrated. I don’t like confrontation, I run from it, but what I’ve had to learn is that you just have to deliver the truth,” says Brent.
Make sure that the vendor and purchaser love each other throughout, advises the experienced agent, that’s important.
Region by region comparison used at Bayleys
At Bayleys, Johnny Sinclair says, the agency is mindful that different regions are at different parts of the property cycle, so he brings together regional offices to talk with each other. He recently had three residential managers from Auckland, Northland and Wellington come together, as all three regions went into the downturn first, and they talked to an audience about the signs to look for, what worked for them, what didn’t.
Senior management flag any major issues or challenges with managers who will do a sales session on Tuesdays with agents, he says. Agents need a lot of support at the moment.
“Managers’ phones should be going off the hook with agents calling. Ours are and I’m assuming everyone else’s are,” says Johnny.
A lot of sales people who haven’t been through a property cycle will be paired up with managers who have, he adds.