By KATRINA CREER
A red-hot market may appear to be a real estate agent’s dream, but most are still working harder than ever in the pandemic property boom.
While cheap mortgages, low stock levels and ‘fear of missing out’ are driving results, an experienced agent still needs to be there facilitating the sale and making it happen.
Peter Chauncy from McGrath Estate Agents at Crows Nest said while around 70 percent of properties are fetching ‘crazy’ prices, the remainder of listings are still taking the same required work and skill to sell them.
“Not every single property is flying out the door – while the majority probably are – there are a lot with their own quirks, like you would find in any market,” he said.
“These drawbacks might for instance include being on a busy road, high strata levies or even a poor building report - and while they are spending a shorter time on the market - it comes back to good old fashion selling.”
So, how can agents ensure they are following best practice to achieve a successful outcome rather than just relying on the current market conditions – and why does it matter?
Getting prices right
One of the biggest challenges for real estate agents this year has been determining a fair and accurate price guide.
This was particularly hard during the first six weeks of 2021, when a lack of stock coupled with frenzied results, made it difficult to find true comparative sales.
Sarah Bester, General Manager of Ray White Double Bay said while there is a mandate for agents to attract interest by quoting a comparable price, it can lead to a lot of disappointment.
“A lot of these amazing results that everyone is seeing - which can be as much as a million dollars over the reserve - are because the comparable sales used to estimate the price, were lower using NSW Fair Trading's guidelines. This is technically not underquoting but often it isn't what the agents hope the property will achieve. In this current market it is also difficult to predict so it's a real dilemma," she said.
“You have to be very cautious about pricing and it is not something for the amateur agent to be trying because it is a tricky area of compliance with serious financial consequences for consumers."
Ms Bester, who is Deputy Chair of the REINSW Residential Sales Chapter, believes agents must do their due diligence and not just ‘go with a gut feeling’ when it comes to setting a price guide.
While buyers are often coy about disclosing their full budget, in a booming market, it may be a good indicator when setting a price guide even if it is a little less than what they are prepared to spend.
“If you were an effective agent you would be going to all the open homes in your spare time to research pricings. Agents need to review their pricing weekly to ensure it is still current and correct,” Ms Bester said.
Keeping everyone happy
With more people trying to secure a property before it goes under the hammer, agents have found themselves in the midst of difficult negotiations testing their best practice skills.
This creates an ‘auction before the auction’ where buyers, who had been intending to bid, are instead forced to show their hand earlier than anticipated.
Mr Chauncy, who is a member of the REINSW’s Residential Sales Chapter Committee, said while agents are working in the vendor’s best interest, it is also important to make it a pleasant experience for buyers and not to ‘burn bridges’.
There is often very little they can do if someone makes a strong offer on a property and the vendor wants to accept it.
The best strategy is to keep everyone informed throughout the campaign. This includes telling other interested parties of any early offers.
“The less experienced agents tend to get a bit excited when someone wants to make a good offer before auction,’ Mr Chauncy said.
“But other buyers find this really annoying because they have to make a decision with very little notice on a property, when they were set to bid at an auction and are caught blind-sided.”
While disappointed buyers are inevitable, transparency, setting expectations upfront and adopting a balanced approach to selling can ease some of their frustration.
“It is probably the thing that keeps agents up at night at the moment, making sure we do the right thing by everyone,” Mr Chauncy said.
Matt Nicastri from Cunninghams Property agrees that managing the frustration of buyers is a challenge. He believes it is important to be flexible with the price guide when indications change during the marketing.
“I tell buyers a specific range where I feel they need to be in order to be competitive come auction day – and I think they really appreciate that,” he said.
“This is really what they care about – they are not looking at the guide – they just really want to know if they have the budget to be a serious contender at auction.”
Keeping sellers on track
With the current market delivering some staggering sales prices, it can also be a delicate balancing act keeping vendor’s lofty expectations in check.
Mr Nicastri revealed this is becoming an issue on the Northern Beaches where sellers know there is strong demand for lifestyle properties following the COVID-19 pandemic.
He recommends encouraging vendors to have a backup strategy should bidding stall before their desired outcome. This also enables a decision to be made quickly on auction day.
“Just like buyers need to have an idea of where pricing will be, the vendor also needs to be well informed so there are no surprises come auction day,” he said.