I’m getting differing reports from estate agents on the fallout from Brexit.
Some of my clients – estate agents and property developers – have had serious problems with large numbers of sales falling through, a massive drop in new applicants registering and extremely low offers being received from opportunistic buyers. They’re finding it hard to agree new sales and their relationships with vendors are on the slide.
At the other end of the scale, I have a client whose business has remained strong and still receives multiple bids on properties. They’ve also experienced a drastic drop in the number of people registering to buy, but also in new instructions. This has created an acute shortage of property and buyers competing against each other to secure the home they want. This agent could easily do more sales, if only more property were to come onto the market.
For those estate agents and property developers experiencing fall-throughs and low offers, the answer is clear: asking prices need to come down. The market is telling you exactly what you need to do, not only to keep your existing sales and make new ones, but to increase the level of enquiries. For property developers this is simply a matter of taking a decision. For estate agents it takes a certain amount of bravery because most agents will do almost anything to avoid the confrontation of asking for price reductions. But if you don’t do it your vendor will most likely go elsewhere, and reduce their price with the next agent. We all know it’s easier to get a price down at the point of instruction than it is a few weeks later, which is why agents concentrate their efforts in that area. But “needs must”, as they say, if you don’t want to be disintructed.
For estate agents with not enough property – particularly in areas where there is a general dearth of instructions – you are going to need to start taking existing instructions away from your competitors. With a general lack of property becoming available, you need to increase your share of the market by calling up vendors who initially went elsewhere and convincing them to come away from the agent they chose. You should also be leafleting, door-knocking, posting to your social media and doing whatever is necessary to get the attention of vendors already on the market with other agents.
These are of course not the most enjoyable tasks of estate agency but they are necessary and powerful steps to overcoming the issues that face your businesses. The very worst thing you could do is to do nothing. There is always, always, always something that can be done to increase a company’s fortunes.
What would make the difference to yours?