Property Talk

The leaders in the field today and are successful because of the tough times, not the good times

I love tough trading markets. In fact, the tougher the market the happier I am! Why In my 24-year career as a realtor I have traded through some incredibly tough markets. In November 1998 interest rates in South Africa peaked at 25,5%.

At the time we had just completed an 8 home development in Zimbali, having sold 4 of the beautiful new apartments, but with 4 remaining unsold with no buyers in sight.

With interest accruing at R100,000 per month on the development bond, the strategy adopted was to sell at whatever price and survive to fight another day. This was achieved and with hindsight was the correct approach.

By 2003 the buyers that had taken advantage of the aggressive pricing strategy had already more than doubled their money and we had already completed a new 8 home developed in Zimbali that had yielded a 70% after tax return on capital employed.

In 2008/9 the global financial crisis reduced the 90,000 strong number of registered estate agents in South Africa to less than 30,000. This remnant of battle-hardened warriors are the leaders in the field today and are successful because of the tough times, not the good times.

The reason I love tough markets is that it eliminates all those in the industry that are not 100% committed - leaving the true professionals to trade their way forward. It also accentuates the value-add a professional estate agent brings to the table.

Sellers suddenly realize how hard it is to transact and what it takes to get to a point of closing a transaction. I am not sold on the current popular notion of a business model providing for a fixed fee service with the agency only providing listing services and leaving the seller to somehow present and show their home.

The proof will be in the rate of concluded transactions and the tougher the market the harder it will be for these businesses to perform and make money. Let the tough times roll!

Any experienced estate agent knows that you are always closing - from the first interaction with a prospective purchaser to when you eventually put pen to paper. People typically do business with those that they like and trust.

Successful agents are able to gain the trust of those they serve by knowing instinctively what is important to the client and how best the guide the process to a conclusion.

Good real estate agents are integral to the local community's tapestry that they serve. They are hyper-local beings, who do purposeful work, helping people buy homes and create communities. They often get close to their clients becoming friends for life.

Agents are embedded so deeply in their communities that their work keeps the flywheel of real estate spinning. The successful agents become masters of their craft and build bullet-proof reputations. They know that they are only as good as their last transaction and wake up every day ready to serve.