A DIFFERENT VIEW

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Sometimes it’s good to look further than your borders to gain a completely different view. 

EstateAgentTODAY is a leading site in Britain jam-packed with up-to-date news, articles and trends. I tribute this article to them entirely. Published late last year, it was sent to me by a friend. It is quite direct but also immensely challenging to those of us who may be “caught up” in this time. Bearing in mind, times have changed dramatically and, as it was written in good times, it seemed all the more compelling a read for us.

But there’s another reason why I’m writing about Britain’s property market; a sample of One, in fact. My friend moved about 3 months ago and had the idea, in terms of his Visa requirements and in order to supplement their income, to buy a guesthouse. They have investigated possibilities for a year and a half now and set off on 7 July 2020, as permitted by lockdown relaxations, to view 9 guesthouses in the south of England.

The problem, we might say, is who invests in a guesthouse in a time when no one is going on holiday or travelling for business? Well, my friend has, and he saved himself UKP55000 on the price and UKP15000 on Stamp Duty [UK’s transfer duty], making a total of R1500000 saving. The latter boon is a gift to UK Property from the government which uplifted Stamp Duty until March 2021, to encourage sales. He and his wife take occupation of their 5-star guesthouse in Torquay, Devon in September.

The point for me is this:

  • 9 guesthouses were viewed
  • 3 estate agents were involved in the viewings
  • 1 won and she had 3 viewings lined up in total.

So, in the midst of a crisis just like ours, 3 estate agents had a one-in-9 shot at a sale. The price was correctly discounted, and with all the risks and strangeness of a new country, a sale was made. Indeed, as the article says, “You eat what you kill.”

We trust you enjoy the challenging read…

The problem with estate agents is: Whinge. Moan. Lead quality. Crap market. Decision procrastination. Fee pressure. Bloody competitors. Especially Purplebricks. Brexit, of course, Brexit.

These are just some of the ‘reasons’ that UK estate agents give as explanations for their lack of listing performance. In morning meetings all across the country, an army of ‘LAOs’ (Listing Avoidance Officers) sing in unison: “The leads are rubbish. And no-one is making decisions.” The Royal Wedding, holidays, Christmas – the opportunities for side-stepping success are plentiful. And not forgetting the weather. Too hot. Too cold. Snow. Storms. The wrong kind of rain? Blah blah.

In my 35 years in sales, most of it in estate agency, these excuses have been nothing but consistent across multiple salespeople in numerous businesses and several sectors. Sound familiar? It’s as if mediocrity and apathy are somehow excused by such lamenting. If the excuse is good enough, you’ll slip off the hook and survive another month. And if your other sales team colleagues can be persuaded to employ similar abdication, too, then that helps a lot. Safety in numbers and all that.

Yet, every time I picked up the phone or saw a potential customer face-to-face, each opportunity to do business seemed rather more proper. And when I dug into the sales team’s call stats and pulled a few recordings and listened in, more often than not I noted the following issues:

  • No customer qualification
  • No USPs mentioned
  • No questions asked
  • No close attempted
  • No contact details taken for follow up

So-called weak leads dismissed as ‘not a real lead’ in order to not dilute conversion rates. No wonder. No wonder ‘the leads are crap’ when salespeople, very often, don’t treat leads as, well, leads. And in a business where millions are spent on marketing and portal costs, with the resulting CPL (cost per lead) up there in the hundreds of pounds, that’s sacrilege. Around a third of portal, leads aren’t even opened or responded to by agencies. Yet about half of buyer enquiries have a property to sell. Madness. And yet we moan that the portals are ‘too expensive’. Think about that again for a second. Yes, way too expensive if you don’t capitalise on them properly.

In other markets such as the US, agents don’t squander leads. Hell, they don’t really rely on ad-derived inbound leads much at all. In Australia, an agent there told me that two-thirds of his leads were self-generated. Indeed, every person they know and every person *they* know is a potential customer. Every home on the market in their area is a lead. Every past valuation appraisal is a lead. Every Facebook friend. Every LinkedIn contact. Every neighbour. Every viewer. Referrals and recommendations. And so on. And the fact is, all of these opportunities are free. CPA zero.

UK estate agents are lazy. There, I said it. In the main, they take orders but rarely prospect. They’re not salespeople they’re passive recipients – sat under big, expensive trees waiting for the fruit to drop, nicely ripened, directly into their soft, comfortable, complacent laps. I’ve written and spoken much about the unsustainable cost to an industry of big branch-based networks. The evidence is there for all to see. But our culture of goal-hanging for easy-win leads, waiting for those customers that offer themselves up with a pen in hand desperate to sign your sole agency agreement – that’s not a viable acquisition strategy either.

‘You eat what you kill’ is the mantra of the world’s hungriest, fittest salespeople. Go out, find it and drag it back to feast on. Rather than waiting for an elderly specimen to wander into camp and die of natural causes right in front of you. That’s a sure way for your family to starve. But that’s what UK agents do. Estate agency is changing. The unit economics dictate such. But not only will the fittest and the most pro-active survive, they’ll prosper too whilst the weak and the apathetic die out.

Great White or Dodo? Choose one. But if you continue to choose the latter, remember it was your choice. It is simply left to say, What about the Originators and Conveyancers? I guess exactly the same sales and relationship principles apply.

For all of us, DO GOOD AND BE GOOD AT WHAT YOU DO.

Yours in Property.

OUR ROLE

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Hi Everyone!

It’s probably 5 weeks since my last blog. It was titled Resilience and, as is so often the case, writing about something we all have but also something that we need to be reminded of from time to time, left me at a loss. Indeed, I found that a difficult blog to research and write and it took some doing for me. The next few weeks flew by and we experienced why they call this place the Cape of Storms. We’ve had two storms of a ferocity that we have not seen or felt in almost 6 years of being here. Eucalyptus trees uprooted, houses demolished, near misses of cars and homes as trees crushed into them and 270mm of rain this year thus far compared with 320mm in total last year.

No wonder the Cape of Storms has another name, the Cape of Good Hope. Life’s like that sometimes, hey? On the one hand, its storms and on the other like sitting here this morning in glorious, quiet sunlight [getting my vitamin D like the doctor said], its cause for hope and positivity. If you’ve seen the recent videos of Seapoint’s promenade battered by 10m waves and rivers of foam, you can imagine the early sailors arriving here terrified by the storms they had endured and then filled with hope as they moored in Table Bay in the lee of the Mountain. Little did they know it would become a landmark and one of the new 7 Natural Wonders of the World. We get to have it as part of our beautiful, tortured country.

In recent times, we have experienced a reduction in rates akin to the 1970’s and an inflation below the bottom of the SARB’s target range at 2%. In addition, and may I say unlike the sub-Prime crisis, the banks have stayed open for business. They are saying “Yes” to loan applications and that is adding to the “time to buy” that many people are experiencing.

If you have more than 10 years’ experience in the property industry, you have never lived through a time like this. I’m over-60 and been in financial services just about all of my working life, and I have never experienced anything like this. Despite global growth projected to reverse to -3% this year from +3% last year, our own growth from +0.5% to -6% this year and our unemployment increasing from 10 to 13m, we seem to have a buoyancy in our sales. I’m thrilled for every worker in this great industry who may, even tentatively, agree.

I have a few thoughts to offer some insight into this phenomenon:

  1. It could be as simple as a rebound from a long period of inactivity.
  2. It could be that people have done the sums at a 7.25% Prime and found bonds affordable for them.
  3. It could be that house prices have reduced significantly for two reasons. Firstly, there are desperate sales taking place in a scramble for cashflow. Secondly, realism over some time has resulted in house prices dropping in favour of buyers. There is a last niche issue and that is that people have finally decided to emigrate and they’re selling at their best price.

If I’m right on the first point, little did we expect that and grateful we are. No doubt. As regards the second, the SARB’s decision to drop the rate as a monetary tool was out of realisation that they must do so. One of the great learnings from sub-Prime was that the financial institutions must act early and decisively. Worldwide they did, and it worked; even to the seeming delight of the markets that have recovered on a whim of economic revival and any rumour of a vaccine. The last point above is probably correct because any reduction in price over time has been met with an increase in sales. What has really impressed me though is the speed with which a heightened level of confidence has returned. I look forward to banks’ research as to why this has happened.

All the above is based on solid feedback that the mortgage business, the real estate business and conveyancing has become busy again. The middle sector is still active in the lower end of market prices but compared to some of the negative press a while ago, we’ll take any good level of activity. I hear in Hermanus [read: along the coast] there has been a renewed interest in buying, however, the issue is that people still have to sell their current homes and that’s where the reality stalemates. Nevertheless, people want to buy, and others want to sell so we’ll take that!

A last point is that the Deeds offices are backlogged. There are millions of Rands of reggies locked up in their inability to fully staff and then stay open. I hope the floodgates open for so many cash-strapped businesses.

Homeloan Junction has been operating virtually but practically at full capacity throughout. In its belief that clients come first, service may have been difficult at times but nonetheless, it has been as good as it gets. Like you, we have endured and survived; grateful that the damage has been contained. We are faithful that it will continue and now just need the banks to regain their confidence and improve approval ratios. That may sound cheap talk, but their confidence means jobs are returning into the economy and everyone is a net-gainer.

How we appreciate you and your support! We depend on it for success and never underestimate all the effort you have put into our business. We trust you feel the same about us and what we have been able to deliver in these trying times.

So, to our title for this blog…

Our role? Twofold:

  • To continue to be the best estate agent, originator and conveyancer in your area. Trusted, competent and enthusiastic.
  • And, to encourage anyone who has allowed these times to dent their emotions. Be there, lift them and trade in hope for them.

Finally, I have not mentioned covid, corona, pandemic, etc in this blog. You could say I have avoided them like the plague but that may sound a bit corny ☺. How we hope that we quickly peak and begin the process to normality, however “new” that may be.

Yours in Property.