Maintaining momentum in vendors

There is also a lot of conjecture as to how you can “convince” vendors to sell their place, including bashing them over the heads with the fear-mongering news cycle, but is that really the right way to go?

We’ve got to look at this from both perspectives, but, more importantly, we need to keep in mind the ramifications of our short-term actions for the medium- and long-term consequences and then put a plan together that will give us the best chance of making it through a market winter whilst planting for a strong harvest moving forward.

Acknowledging the anxiety

Interest rate hikes, an uncertain economic future, remnants of a COVID-riddled world — that’s enough to make plenty of people freeze. Everything feels like more of a gamble, and the slightest thing that goes wrong is made to feel a lot greater than reality suggests.

Most of the chatter I’m hearing from agents to combat these barriers to entry is to reiterate whatever the latest news headline is and use that as “the” reason that a vendor should either drop their asking price and/or take a lower offer.

The same applies for future vendors, except you’re being asked to scaremonger them into action by saying something along the lines of “sell now or lose the buyers that are in your price point”.

Instead of creating further anxiety for them in an already stressful situation, why don’t we start by telling our vendors that we appreciate the genuine concern they’re experiencing, thereby validating their feelings, which, I have found, helps to establish trust.

One of the first things I say to vendors when I’m introduced to them during an auction campaign is that “you’d have to be living under a rock to not hear what’s going on right now in the market according to public/media opinion. But all is not lost, and we still have an opportunity to move you closer towards your goals.” It’s a safe assumption that if they have a phone and/or TV, they’ll know what the market’s doing, so just to hear that everyone is aware is comforting.

Acknowledging what is causing them anxiety is the best way of making them feel like their concern is valid and that they are being listened to, which helps alleviate their concern. Once there’s a level of equilibrium, you can then look to paint the whole picture as it relates to them and their goals.

Short term wins but at what cost?

Say you go down the path of “least resistance” and try to scare a few potential vendors onto the market by freaking them out via the current news cycle.

With all the news and with the end of the year fast approaching, the likelihood is that most vendors who come to market now will already have a degree of urgency, and that urgency is already likely to be creating some stress without the addition of current market movements, and it may ultimately damage your relationship with them.

I do believe it is very much still worth making the call and arranging the visits so that you can help them solve the puzzle that is in front of them, but the focus must be on remedying their issues, not your revenue.

Knowledge is power

If you’re going into any of these conversations, then you better have got your homework done on the greater economy beyond the term “interest rate”. Knowing your current market numbers, understanding what inflation is, how it is affected by the Reserve Bank of Australia measures and why it’s necessary will give you more credibility in the eyes of those who are looking to navigate the stormy seas soon.

Talk to the circumstances, NOT just the transaction

Focus the conversations on their goals rather than a deviating market. The more you do that, the more likely you’ll get a greater buy-in to any suggestion of going to market, more so you will have justifiably made going to market the more reasonable option.

Ultimately, if you can show them a path that they can walk based on their goals and current circumstances that they understand, then they’ll still walk forward. But you need to be more thorough with each element of your presentation to ensure that you have a collective buy-in, instead of simply presenting your wares and asking for their business.

With each component of your presentation, I’d recommend that you follow “The 5 C’s” that will help you to bring vendors into a “can-do” state of mind:

• CLARIFY what their understanding is of that component.
• Provide them with the CONTENT around the topic.
• Put the information into the CONTEXT of their situation.
• COLLABORATE with them around possible solutions, getting their thoughts on your recommendations and providing logic to support any suggestion.
• CONFIRM that they understand and agree that the course of action is right for them in this market, given their goals.

If you do that at each juncture, you’re way more likely to alleviate any added anxiety that your potential vendors are likely to be feeling, given the noise that surrounds them.

Andy Reid is an auctioneer and the director of Sold By Group.