It’s probably reasonable to suggest that every agent, regardless of where their patch is, has noticed a change in the air recently. And no, we’re not talking about Christmas nearly being upon us.
Successive rate increases from the Bank of England, double-digit inflation, a sombre Budget earlier this month and a scary ‘leccy bill are now uppermost in the minds of many movers. There’s a palpable shift from the frenzied sellers’ market of a few months ago. In some cases, this is translating into parity between vendors and buyers when it comes to price negotiations; in others, applicants are finding themselves with significantly more leverage than has been apparent over the last couple of years or so.
Or as one market commentator recently concluded: “Buyers are negotiating like it’s 2008, but vendors still think it’s 2021.”
Added to this backdrop are the complex and well-documented challenges around transaction timescales, making it easy to see why forward-thinking agents are seeking to insulate existing deals and build robust pipelines as we go into a change of market cycle.
If all that sounds daunting, there is one simple thing that you can do to help yourself, your vendor, their buyer and the professionals you’ll be working with to get deals across the line. And it starts with the truth; evidence, in the form of market comparables. Used correctly, comparables can be the ultimate ‘social proofing tool’ in terms of supporting your credibility and local market knowledge.
Why? Because vendors and applicants love hearing about properties you’ve sold. But if you really want to seal the deal, let them hear about the properties you’ve not sold as well.
If that sounds a bit counter-intuitive, let us explain why…
Winning listings
It doesn’t take us to remind you that, when you go out on a market appraisal, you’ll obviously want to provide details of other similar properties you’ve sold in your leave-behind materials.
However, if you really want to demonstrate that you can talk in-depth about your local market, you also need to show properties that you’ve not sold (or let) to evidence the fact that you’re giving your prospective vendor the best price advice possible. That holds true in any market, but especially the one that we’re going into.
Even if you have a high market share in your area, there will always be ‘that one’ property that you didn’t sell or let, which the vendor or landlord will cling to as the benchmark value for their own property.
Without taking that comparable to your appraisal, what would the vendors’ perception of your credibility be? Exactly. So, this is about serving up empirical information and removing your ego from the equation. You didn’t sell it? So what. It’s still highly valuable information for that vendor, and in providing that level of detail and demonstrating your local market knowledge, at worst you’re only going to come out of the situation well. At best, with a new instruction.
Supporting asking prices
We can probably all agree that consumer perception of the housing market is influenced by the national media and social media. Of course, the reality is that there is no ‘one size fits all’ housing market, which means that although the news could be saying one thing, what’s actually happening in your patch could be very different. The challenge is providing that evidence to a buyer in order to achieve the best price for your vendor. Particularly when some media outlets are hysterically reporting the next ‘great recession’ is around the corner or that inflation rates are going to reach the equivalent of those in small Latin American countries. On top of that, there’s the not inconsiderable challenge of current delays at HM Land Registry to contend with, which means the normal go-to resource for consumers and industry professionals alike of historic sold prices can’t be 100% relied upon at the moment.
That’s why supporting your asking prices with comparables is powerful, especially if they aren’t properties sold by your agency.
It sounds so simple, but the reality is that actually, only a few agents do this.
No motivated buyer is going to be perturbed by the inclusion of relevant comparables with the details of the property at a viewing. Rather, it demonstrates your integrity as an agent and helps you to build rapport and dialogue very quickly, which is only to going to assist you when it comes to negotiations at the point of an offer.
Preventing fall throughs
As we enter a different market cycle, there may be buyers who decide throughout the process that another property is ‘better value’ than the one that they are currently in the process of negotiating. Given that average transaction times in the UK are now longer than ever, purchasers have more opportunities to reassess the market, regardless of whether they’ve paid their survey fee or already asked their conveyancer to order the searches.
However, having an instant rebuttal in the form of comparable pricing evidence – again, even if the property wasn’t sold by your agency – might just be the additional confidence that your buyer needs to remember why they fell in love with the property in the first place.
It may also satisfy their appetite for additional knowledge when they are having a wobble, which provides them with reassurance in the price they’ve agreed to pay.
Another idea; run your comparables as soon as the property goes under offer and keep them refreshed at four-weekly intervals throughout the sales process. That way, you’ve got them instantly to hand should you need at any time to reassure either buyer or seller just in case any issues arise.
Down Vals
Apart from a shift in consumer confidence there is of course the fact that mortgage lenders are becoming increasingly risk averse, given the current economic headwinds. With that comes the possibility of down valuations, and with them the need for agents to have all sorts of difficult price management conversations with vendors that everyone involved would far rather avoid.
We’re not saying that comparables are the silver bullet for this, far from it. However, they can help significantly to pave the way for a smoother process, if deployed early on in the transaction.
By keeping your comps on file in a format that can be easily shared with a third party, as soon as you hear from the buyers’ mortgage broker or surveyor, you can send your comparable evidence across at the earliest possible point in the transaction. This provides crucial information that a surveyor and lender are going to need ‘up front’ and can really help in playing a part to mitigate a down valuation.
It's worth remembering that surveyors and mortgage brokers don’t, on the whole, have the luxury of being able to access comparables from multiple live and historic sources in the way agents do. By being on the front foot and helping your buyers’ mortgage broker and surveyor with a detailed set of comps, you’re already ten points ahead of the agent who takes a defensive stance, which translates in the majority of cases into a swifter completion and reduced levels of stress for everyone involved.
We’ll leave you with is this thought. To paraphrase George Orwell, in a world of ‘fake news’, telling the truth via intelligent use of comparables could be revolutionary. Or at the very least, provide you with the armour to shield you and your pipeline against a changing market.
Who are Sprift?
Sprift is here to help make property transactions quicker, easier, and cheaper for all by providing access to accurate and comprehensive upfront information…instantly and for any property.
Accessing our ‘game-changing’ data on any property will save you time, secure you more valuations and will ultimately assist you in winning the instruction. Sprift sources property data from over 100 individual data points per property, via 1bn+ public and private records, and combines this all onto one dashboard - from planning to flooding, title plans to broadband connectivity.
If you are looking to clearly differentiate your business, then look no further. Impress your clients with fully white-labelled reports or share access to the interactive dashboards and receive real-time notifications about when they are being viewed and updated.
Our team includes ex-estate agents who really understand the data which is needed at the click of a button, and we continue to develop the Sprift technology based on agents’ feedback. We see ourselves as being a partner rather than a supplier to our users and work hard with them to help their businesses grow by unleashing the value in property data.
