I was recently sat in a room with a group of four inexperienced real estate agents. I asked them a simple question and they all kind of missed the point with their answers. Or at least didn’t see the bigger picture.
I asked what their competition was, almost instantly they looked at each other and pointed. Although not wrong, I simply asked what else? The next response was “other agents”.
This response was unsurprising, but a fairly narrow viewpoint.
I first really started thinking about the answer to this question a long time ago. One real estate agent left me with a lot to ponder after she surprised me with one quote. She very accurately said,
“You are not my main competitor, Disneyland Florida is this month”.
When it came to writing the article, the purpose was to touch on a number of points that will really make you, or I suppose more so those starting out; consider their understanding of the market as a whole.
Thank you as ever for reading,
With this in mind my first draft was nearly 7,000 words of content. I have trimmed this down dramatically as it was far too in depth. If you wish to learn about the impact on real estate of the recession or interest rates in greater detail then are countless articles out there to help.
I simply thought my initial article would miss the point of my intentions somewhat.
This more concise version certainly contains enough for you to understand some of the factors that affect real estate sale; I’m sure there are many more you can think of too.
However the main aim here is to try and help you understand ways to prepare for and even combat these form of challenges, which are ultimately a form of competition for you.
Who is your competition in 2016?
There are a huge number of variants that will inevitably affect the number of properties that are sold. They cover such a broad spectrum that I’m sure you are familiar with, but it really is worth being aware of; and more importantly conscious of.
– Economy will always play a vital role in the money available for people to buy homes. Politics, oil production and gas prices all contribute a great deal. Interest rates in particular can make an enormous impact in the real estate market.
Levels of unemployment will also massively fall into this category, as well as mortgage options and availability. Government schemes can also play a large part in the real estate activity.
There are countless other factors also like retirement ages and consumer confidence.
This does go without saying, but monitor the market and understand global investments. This can make a huge difference to your local markets.
Understanding the upcoming movements allows you to be plan ahead and also answer any home buyer concerns.
– Foreign exchange rates are maybe a less obvious one, alongside the travel agent market. It has been reported that the drop in the price in the Euro has caused more UK residents to put their home plans on hold in favour of holidays abroad.
- Local factors such as crime rates should also be taken into account. Alternatively developments and regeneration programmes will also have a ripple effect.
Also take into account environmental impacts such as weather and natural disasters. Rising temperatures could prove to be a great draw, although previous flooding episodes will have the opposite effect.
– School / academy performances are something that should not be overlooked. From both a positive and negative standing; this is something I know homebuyers are very conscious of. This can play a large part in the decision to raise a family in an area.
– Sporting or significant events are occasions that could put an area on the map. London has seen a spike in property prices prior to the 2012 Olympics. Do not underestimate this impact, and try to understand any knock on effects for your area.
– Immigration is something that is playing a larger role in the real estate market than ever before. Being in touch with your local situation and requirements is vital. This can have positive or negative influences that you need to be aware of.
So is your competition the other real estate agent? Yes, certainly; but it is also the weather, a holiday company, the area, the global market and all of the factors mentioned above. As well as countless others I have not touched upon.
How can you counteract these external influences?
I am sure you know that with a lot of these factors, there is not a great deal you can impact. You alone are unlikely to prevent a recession or prevent a natural disaster. However let me share my thought process.
One of the best pieces of advice I have heard in real estate was one of my earliest pieces also. To this day it has stayed with me. Let me provide a little backstory as to where it came from, to allow you to fully understand my reasoning and belief in this.
I was once asked by an experienced realtor Wendy “who is likely to be buying a property? Secondly what type of property are they likely to be looking for?”
I took this question very literally and answered with what I believed to be the typical types of buyers. First time buyers, couples, families, divorcees, those retiring, people looking for second homes etc. I then married these types of buyers with a stereotypical property I felt would suit.
I was then asked by Wendy “So what kind of property do I own?” To me Wendy was a successful realtor, who I knew had children. I responded with “I would say a nice detached house, with a garden”.
Wendy very kindly told me the story of how because she had battled cancer previously, so bought a small bungalow with very little maintenance. So because I did not fully understand her, and her circumstances, it was impossible for me to know her requirements.
The key message here is that the focus should never be on the property, but always on the buyer.
We can never presume we understand a buyer’s needs or requirements until we know the person.
This advice has very much stayed with me to this day, and can be used in a variety of circumstances.
Customer service is key!
Without doubt the economy and interest rates affect the real estate industry. Does that mean that people will no longer buy homes? For sure less people are likely to. However for those looking to buy properties it means we just need to make sure we meet their needs, rather than what we perceive their needs to be.
This could be in the shape of a smaller house or different area; we do not know until we make that connection.
It could simply mean we need to focus on counteracting the holiday trade as much as possible by highlighting specific assets of a property. Perhaps that the garden faces the sun or the amount of space in to play; or even the fact it is near to fields or a park.
Think about the expectation levels of your potential buyers. By understand what they require, and then delivering above and beyond that; is a fantastic way of building trust and confidence.
By this I mean showing real understanding and interest in what they are looking for. What advice and support can you personally offer that would help them? Whilst also helping you to stand out from your ‘real estate competitors’.
Do not underestimate how powerful this can be at building loyalty and rapport.
This may not pay off immediately in the form of a short term sale. However that is likely to have created a potential warm lead when the opportunity arises.
The point I am really trying to make is that there are a huge number of variables outside of our control.
Do not focus on things we cannot control, instead put 100% of your effort into the things you have can affect.
If there happens to be any local developments or improvements then jump on this to your advantage. What opportunities does it present?
If a local school or sporting academy is producing outstanding results, then use this to your advantage. The key is staying on top of news and celebrations within your area.
If a celebrity has moved into the area, how will this impact the market? All of these small factors should be weighed up to look for potential opportunities.
There will always be upturns and downturns in the real estate market. The constant is that people buy properties. Focus on the person; focus on real customer service of the highest quality, your rewards will be your reputation. This is an incredibly powerful asset to have, especially when things are tough.