What does 2016 hold for the real estate market?
The landscape of Australian real estate is changing. In many areas, stock levels have increased substantially. This is quite a different picture to six months ago when low levels of stock created a sellers’ market where many buyers felt a strong urge to get into the market at any cost. Fast forward to today’s market and we see higher levels of stock, which means buyers are comfortable to take their time to purchase a property. I believe this is true in the majority of the country, but not in all parts.
This new environment means that the agent’s role in a real estate transaction is going to change. In a boom market it could almost be argued that agents have a smaller part to play in terms of the negotiation and marketing required to make a sale. This is due to the strong level of buyer interest in real estate. However, when higher levels of stock come onto the market and buyers are more willing to delay their decision and negotiate, the role of a real estate agent becomes more important.
In the market that is beginning to emerge, sellers will need a high quality agent who is able to work with buyers in order to facilitate a transaction. In addition, sellers will also need an agent who can utilise a marketing strategy that will help sell the property. Below are some of my thoughts to help sellers identify an agent that likely has superior negotiation and marketing skills.
Sellers often face the temptation to list their property with the agent who offers the lowest fee. In my opinion however, choosing this option is a mistake. If the agent who pitches to win your listing is unable to negotiate a fair price for their own services, I don’t believe they will be able to achieve the best result for the sale of the property. When an agent is negotiating with you for their fee, it may be worthwhile to think about the process as a test run for when they negotiate with a buyer. If they are able to demonstrate why you should pay more for their services, they are likely to be able to convince a buyer that they should pay more for your property.
Another vital skill in negotiation is communication. This is why it is important to observe your potential agent’s communication skills. If you find that the agent is constantly late in responding to your enquiries, or they don’t provide answers to the questions you are asking at all, it could be an indication of the service they provide to buyers.
The past three-and-a-half years has brought many new real estate agents to the industry. These new entrants have not experienced a normal real estate market. In the past, some agents have been able to get away with putting very little effort into the sales process. In a normal real estate market however, the agent must be able to successfully bring a buyer’s offer up to a seller’s price. As a seller, it’s natural to want the highest price possible for your property, so it’s important that your agent is able to bring the buyer’s offer as close as possible to your price.
You are entitled to ask prospective agents what their marketing plan would entail. As the property market changes in the manner described above, marketing will also become more important in the sales process.
An agent is likely to employ two main tactics to promote your property. The first will be advertising directly to their database. The agent will probably match the property against their list of interested parties and approach these people directly.
Secondly, the agent is likely to implement a mixture of print and online promotional activities. Channels may include newsletters, local papers, online portals and major newspapers. The mixture of advertising will vary depending on the property, but will likely include most mediums.
Ask your agent how they plan on using their database and what kind of promotion they will undertake for the marketing of your property. If you feel unconvinced by the agent’s response, keep searching for an agent who you feel will provide you with the best service.
Another key indicator of the likely success of an agent is the signboards in front of properties on the market. Some believe that agents who have many “For Sale” signs in the area are the most successful agents. To me, “For Sale” signs merely demonstrate that an agent is good at getting listings. I believe that “Sold” signs are a far more useful indicator of an agent’s success. “Sold” signs indicate that the agent is achieving results for their clients.
The real estate market is constantly evolving and the current changes could mean that agents may have to work harder for their fee. I’m sure many people are probably happy with this outcome. I wish anybody looking to transact real estate in 2016 the best of luck and hope that your agent can bring you the best result for the sale of your property.