For many years, it is fair to say that Real Estate agents have been operating in a “sellers market”.
Post “Covid-19”, many commentators predictions have been incorrect so far.
The doom and gloom and job losses that were predicted were replaced with FOMO (fear of missing out) and subsequently housing prices have been driven up in an unsustainable way.
Banks have kept interest rates low and lulled people into expecting many more years of low interest rates and fuelled their FOMO.
New Zealand has the most bubbly house market in the world, according to a ranking by Bloomberg Economics. Read more here.
One thing they all do agree on though is that there will eventually be a shift in the market, 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.
In a “seller’s market” our sellers have been rewarded with many buyers often competing against each other in a tight market with an “undersupply” 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, during the Covid restrictions, limited buyers are allowed to be shown through a property at a time, with strict rules of distancing to be upheld and stringent health and safety measures being enforced for the safety of everybody.
Buyers have needed to be qualified extremely well, firstly, with relation to their health status, and 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 even more difficult, once life returns back to normal.
When more houses come onto the market as mortgage rates rise, “viewing by appointment” only will once again become popular, and salespeople will need to nurture their buyers more.
At the moment, buyers feel understandably frustrated by this type of market.
There are salespeople who have worked in many markets, and their experience will show when they continue to exceed expectations during a changing marketplace.
In some countries of the world, you earn more for selling a property than from listing a property.
The Buyer’s market
When I started my career in Real Estate it was a “buyers market”.
I enjoyed getting a buyer in my car, after qualifying them, and showing them at least 6 properties on one appointment. I would do this several times a day with several buyers. We got more commission for selling than listing a property.
Working buyers meant that you would have to know the company housing stock very well, and be able to quote and show the 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 a relationship with them, while finding them a home.
Some salespeople prefer open homes to single appointments, which are time consuming in a busy market.
Personally, I have always liked the “one on one” appointment approach, as after all it is a big buying decision for anybody and it should be treated with respect.
It is more time-consuming in a busy market, but by being able to establish a rapport and understand their buying decision, you are giving a better service to your seller in not wasting their time either.
If you are able to qualify your buyer and understand their likes and dislikes, you will be able to provide a better service to them and give better feedback to the seller.
This is very important so that the seller can “meet the market that they are selling in” which often reduces their time on the market, and the risk of selling for less after many months of disappointment.
Buyers are 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.
It could also be a time when they could perhaps hear negative comments from other open home attendees who have own agendas. Perhaps they think that they can get the price down lower, or maybe they are a neighbour or somebody who has a dysfunctional relationship with the seller. It happens.
Sadly, buyers do miss out in a seller’s 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 many months before the real effect on the market will be felt after Covid-19 in many countries.
There could be some sellers sitting tight as they reflect on their losses in other areas, 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 will fail having been in lock down for extended times.
Or it could cause the FOMO affect – “Fear of missing out” and buyers could be bidding against each other with limited supply, driving the prices up further which has already happened in NZ.
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.
©2021 women-in-realestate.com| Author| Kathryn