In this property market, the buyers are there, and you can find them. They also have specific criteria to satisfy when it comes to locating and purchasing a property. They are more selective and are waiting for the right property at the right price. The COVID 19 health event will produce sales activity and some buyer can operate now within that new cycle.
The sales are happening. Some agents are already short on sales stock. It is a new property cycle, and property sales are and will be in that cycle for some time. So, the target for you as a commercial real estate agent is to find the properties to sell. That is priority number one.
Telephone conversations are the way to find the properties and match the people, and that is now more than at any other time. Make the calls and ask the questions. Explain that listings are required because qualified buyers are waiting. See if you can provide professional help to others.
Any property owner that is contemplating the sale of their property should already understand that this is a new property cycle, and they can be part of it. That is where you can match listings with the buyers of the market. Your lists are a foundation of new business now.
Mix and Match
‘Mix and match’ is a business strategy to put qualified people as buyers into property situations. Understand the ‘buying windows’ that people are seeking to ‘open’ and have satisfied in purchasing a property.
What are those ‘buying windows’? They are critical facts about the ideal purchase that will help the sale transaction move from inspection to negotiation and or completion. If you have a flexible database program, the circumstances of ‘buying’ for each person can be recorded for matching of people to properties. That’s when the matching starts.
Buying Windows to Open
Are you asking the right questions in your buyer canvassing and client calls? Here is a list of a typical set of ‘buying windows’ and they are the issues to explore as you make your calls. You can add to this list:
- Price – This is primarily driven by the loan value ratio that the buyer has to work with. The lender sets the LVR. That number is reducing to sub 50% in many locations for the immediate future. What you should focus on here is to see if the type of property sought is within the value or price range for the location and that the price is realistic. Conditioning of the client may be required.
- Timing – This could be a time of year or a set period for a decision. Either way, you should focus on it because the buyer may be wanting to find something to purchase sooner rather than later. There is nothing more frustrating than seeing your buyer buying something else with another agent while you are waiting for the ideal property. Determine the buying pressure and priorities and work with the timing window that the buyer sets. Expect them to be talking to other agents at the same time they are communicating with you.
- Improvements, capital works, and or configuration of property – Some property buyers will have priorities for properties with limited, set or predictable factors of spending and capital works. Property operating costs will come into that equation as well as outgoings. Excessive expenditure on capital works in older properties could make or break property ownership and cashflow. Know the age and type of asset that will suit the buyer. A review into the history of capital works including essential plant and equipment will be part of the due diligence in the purchase arrangements for many buyers.
- Location and property type(s) – This could be precinct or suburb/zone specific. You could even ‘rank’ the buyer’s choices in location categories such as ‘A’, ‘B’, and ‘C’. As properties come in, you could go straight to your lists to match people to properties in precincts.
- Investment stability and risk reduction – This now involves tenant and cash flow assessments. Lenders are more selective when it comes to the rents paid by tenants and the long-term realities of those rents being paid. Lease documents are of some value to the risk assessment, but the lenders will be looking at the tenancy mix and the tenant’s ability to survive through the current health crisis.
The big picture here is that all conversations with buyers today must be categorized into a list that allows you to get the information out when you need it. Potential transactions are sitting inside your records, and your files will grow through conversations.
Qualification of buyers can and should be done at the earliest time, so you are not wasting time with people that cannot purchase in this new property cycle. There are plenty of people who can purchase property now. You just need the listings. Build your listing stock; that is the message.