Investment tip: Dealing with real estate agents in softening markets

“That has an effect between people’s ears and consumer confidence. Some of the agents are finding that sellers are hanging off a little bit.”

“Buyers are also starting to retract from the market to see what the outcome is and how it’s going to affect them. But, I believe, as we get closer to an election result, or depending on what they implement, we might see some artificial spikes within the market on certain types of properties,” the property professional highlighted.

With less real estate agents in softening markets as the struggle to get listings continue, investors are advised, now more than ever, to get in touch with these professionals in order to make the best decisions.

After all, tough times often show the best of the best across industries.

Momentum Media’s Tim Neary said: “I think it was Warren Buffett who said, ‘Now you'll know who’s swimming without their trunks on.’ These agents without trunks on, they’re going to find themselves out of the water. Interestingly, the top agents, they only say, ‘This is not a hard market. This is how real estate really looks.’”

Agent-investor relationship

According to Mr Waters, as always, dealing with real estate agents is all about creating a strong relationship built on a foundation of trust.

Regardless of whether they operate in a booming market or a softening market, real estate agents will need consistent communication and truthfulness from their clients in order to do their best work.

Coming to them prepared would also do well for a smooth partnership, the property professional said.

“If you’re going to throw plenty of offers that might not be attractive, let them know that. You also have to spend the time to research the market that you’re going to go to, and that’s not just from a data point of view but also in terms of ‘on the ground’ knowledge.”

“Have your pre-approvals ready, showing them that you understand the market and that there’s a deal to be done, all while being firm in terms of the fees.”

“Just speak to the agent a lot and do not rely upon the internet alone,” Mr Waters said.

The property professional also reminded investors to treat agents with respect at all times.

“Keep your ego in check. Don’t ever let ego get in the way of a good relationship. Good agents spend tens of thousands of dollars a year on personal training so they’re very good at what they do. Treat them with the respect.”

With a good real estate agent at the investor’s side, they could avoid selling their property at a loss, even in markets that have reached their peaks.

At one point, Momentum Media’s Alex Whitlock was able to secure one serious buyer for his property in Pymble despite lackluster market performance simply because the real estate agent successfully created an illusion of demand.

Moreover, with an adequate knowledge of the investor’s goals, capabilities and limitations, along with knowledge of the current market trends, agents are well-equipped to give advice on the next best steps to take.

Finding the best agent

In order to find the best real estate agent and avoid those that are simply clamoring for a listing, Mr Neary advised investors to have their prospects ‘put the pitch in’ by doing a listings presentation.

Apart from allowing the investor to understand what exactly the agent can do to sell the property at a good price, presentations also give investors the chance to get a feel of the rapport between them and the agent.

A good reputation supported by market knowledge and a professional attitude are the simple but crucial marks of a good agent, according to him.

“If they go, ‘I sell my stuff before it even hits the market,’ you’ve got a pretty talented agent.”

“If you think they’re selling it too cheaply but they’ve got a good standard industry benchmark, time on market, great collateral and a good strategy to get the best price, these are still key tangible things to consider,” Mr Neary said.

At the end of the day, real estate agents and other property professionals give investors the ability to continue their property investment journey despite fluctuations in the market.

“Things do crop up. You can be opportunistic because, in many ways, in a tough market or in a flat market, gems do arise. Just keep looking, keep investing, keep researching.”

Tune in to Steve Waters' episode on The Smart Property Investment Show to know more about the strategies that could lead to success in the property market this 2019.

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