Property development is all about persistence. You will never make it to the finish line (at least on time and on budget) without unwavering persistence in almost everything you do. Persistence is about challenging the status quo and not accepting mediocrity. Persistence is about persevering to find a better, faster, cheaper or more valuable alternative to the solution that is first presented. It’s persistence with people that is most important. Persistence to a point of course! It’s a fine line between being just persistent enough to achieve what you need and being a pain in the butt that paradoxically slows things down.
This series ‘Persistence Pays’ is my who’s who list to be persistent with and when you might need to restrain yourself.
Real Estate Agents, Sales and Marketing
If sales are going according to plan, then your real estate agents will be doing their job. Yes, they probably can always do better. And by better, I mean sell and lease faster and/or for more money. I am running out of letters to add to the word persist, but let’s call this one ‘persistasales’. Consider three circumstances:
- In-house sales and leasing
- External agents
- Sales strategy change
In-house Sales and Leasing
With an in-house sales team persistence requires all the usual sales manager motivation, slash inspiration, slash training, slash lending-an-ear type responsibilities. It also means persistently encouraging (empowering) the team to find local marketing mechanisms rather than solely relying on head office. Gather regular feedback from those in the sales trenches and action the sensible ideas. It’s all too easy for sales consultants to default to wanting a price reduction. So being persistent is to continuously separate pricing incentives (freebies and price discounts) from marketing initiatives. When things aren’t working you try something else — don’t let the team stand still. When things work well, put more resource into that effort and persistently promote it to the in-house team.
External Agents
Often the external agent you use will not be solely dedicated to your project. The agency that engages you certainly won’t. An individual or three might be if they are part of a project marketing team. However, unless your project is substantially large, only juniors or showroom staff will be one hundred percent dedicated to your project. The main agents you engage to sell or lease your project will more than likely have other selling priorities. If your project does not create the highest number or value of transactions in a certain period, compared to the agent’s other activities, then their interest will wane. This is even if you offer a higher commission — because agents get intoxicated from making the sale. To many agents, a dollar now is more addictive than two dollars later. Moreover, external agents are in the listing business. They need to develop more listings to grow their commission base. And that means more clients competing with the attention your project deserves.
The short of it being you need to be the number one client to ‘your’ external sales and leasing agents. Invest your time in them, so they invest their time in you. Turn up the persistasales volume if it gets tougher to get transactions over the line. Emails, texts and phone calls won’t suffice, although you should be communicating this way at least every single day. Add to that a combination of coffees, lunches, dinners, events and parties. Don’t mistake this for stalking. These are the people responsible for your project’s income. It’s about making sure selling or leasing your project is always at the top of their mind.
Change in Sales Strategy
What happens when the market changes and your sales strategy no longer works? Well, you could go re-read Chapter Five ‘Fresh Image’. However, on the assumption you are almost at the sales finish line, but sales or leases are drying up and you just need to persist, then ask these questions:
- Are your agents too well fed and now lazy? Ok, that might be a bit harsh and, let’s face it, realtors already get a lot of grief. A good agent is always on an aggressive look out for their next commission. After all, if they have been on this project a long time and already made a lot of money, then the last few commissions may not matter so much to them. Near the end they will already be looking for their next project, and yours is slipping down the priority list. Persistently keep them on their A-game or hire in new — and more motivated — blood.
- What is the effectiveness of incentives? Whatever buyer incentives(or motivational buy-now tactics) you used when sales first started slowing will quickly lose effectiveness. You could try upping incentives such as a cash bonus. But if you withdraw it later, after you have achieved a target, then you face a kind of perverse-reverse sales motivator with the agent thinking if they wait long enough you may increase sales incentives again. Persistasales means convincing agents that every incentive is just a one-time deal.
- Are they experienced in this new market? Rather than the cause being a blasé attitude, sales or leasing agents may just not be as effective (or experienced) in the new market environment. For example, let’s say you are developing a housing subdivisionand your sales were all based on preselling. That involves selling buyers on the vision using plans and renderings and maybe a showroom. Preselling is all about selling buyers on the premise to ‘get in now’ to secure a pre-construction opportunity. It is a different skill than selling a home under construction or a completed home. When selling a completed home, the buyer sees warts and all, but also can appreciate the final product. An agent sells the buyer on the benefits of the finished product. Conjuring up a vision is not required. Some agents are better at preselling homes than selling existing and vice-versa. If your project has an agency who originally pre-sold, but because the market has slowed is now faced with completed homes to sell, then the differing expertise needed could handicap further sales. Persistence in this case might be futile. You may need to look at changing to agents who specialize in finished home sales. Similarly, you may have inherited a project that had completed homes and your sales team were employed to sell those down. They did a fantastic job, so you moved them into preselling the next stage. But for whatever reason (they blame the market) they are not closing deals. It may be time to get the ‘pre-sale’ specialists in!
The moral of this section: Persistence has a pay-off. Without persistence, development projects can flounder and every day equals extra dollars.
Andrew Crosby
+64 21 982 444
andrew@xpectproperty.com
Buy the book from Amazon: https://www.amazon.com/dp/1790590884?