As the property market continues to slow, a new buyer behaviour has emerged: “FOOP”, the fear of overpaying, throwing agents off their game as deals fall at the 11th hour. Here is how to overturn it.
As property prices continue to fall, listings increase and days on the market lengthen, agents have faced a new buyer behaviour: FOOP, or the fear of overpaying.
According to real estate coach and LockedOn co-founder Aaron Shiner, FOOP has now replaced the fear of missing out (FOMO).
Shiner said affordability concerns, rising interest rates, and the impact of the May budget made buyers fear overpaying as the market shifted from low supply and high demand to growing supply and declining demand.
“FOMO is firmly in our rear-view mirror, and I don’t think it’ll be returning for some time,” Shiner told REB.
“If market conditions stay as they are, FOOP will 100 per cent be here for a while. It will be part of our new economy, and the agents who master overcoming FOOP will be the ones who benefit.”
A recent Westpac research found that the new buyer behaviour was already seen, with two in five Australians believing now was a “bad time” to buy a property.
The report showed a further 75 per cent have been holding off on buying a property until prices fall more, while 73 per cent said they were delaying a purchase until interest rates stabilise.
Similarly, the Real Estate Buyers Agents Association of Australia flagged a growing number of deals falling out at the 11th hour, with buyers walking away from agreed deals and auction wins, leaving sales in limbo and vendors blindsided.
Shiner said that while the market previously did the heavy lifting, agents would now need to better manage sellers’ expectations but, most importantly, bring buyers through the door.
He said buyers overcome FOOP when they see competing interest, but with open-home attendance down as much as 80 to 90 per cent in some areas, quieter inspections have prompted buyers to question why nobody else wants the property.
“For too long, agents have relied on organic traffic, the buyer inspections that happen naturally. If you want to overcome FOOP, you need to drive your own traffic and build a better relationship with every buyer.”
Selling in a FOOP market
According to Shiner, agents could spot FOOP in buyers when they showed strong interest in a property but hesitated to make an offer, even after a second inspection or a building and pest inspection.
“They like the property. They’re just fearful. They want to know other people think it’s good value before they commit.”
To distinguish whether buyers simply wanted a lower price or were genuinely concerned about their finances, Shiner said agents should find where the hesitations stem from and address concerns about the property value rather than pressure buyers into a decision.
“Everybody wants to buy the property other people are interested in. In this market, we have to give buyers space to make decisions, because they’re in control.”
Shiner said agents could then give buyers three options: walk away if the property wasn’t right for them, take more time to consider it, or move forward with a purchase.
“It’s a genuine conversation about discovering interest, as opposed to an interrogation, where a buyer will just shut down.”
Another way to identify a buyer’s interest, Shiner said, was to ask whether potential buyers wanted to know if another interested party returned for a second inspection or was ready to make an offer.
“If they say yes, we know there’s interest, and we also know they’ve got FOOP.”
Overcoming FOOP at auctions
Shiner said buyer hesitation at auctions and during negotiations came down to psychology, with genuine interest from other parties helping purchasers feel more confident about a property’s value.
“First, buyers need to know other people are interested. That gives them a green light: this must be a good property if others want it too. But it has to be true. Never invent interest, and never manufacture bids.”
He said buyers also needed to feel they had a genuine chance of securing a property, warning that unrealistic price expectations could discourage them from attending auctions or making offers.
“That doesn’t mean quoting low to get them there. Underquoting is against the law, and it backfires the moment the bidding passes the number buyers were given.”
“What works is honest dialogue: a realistic price guide where your state allows one, genuine feedback on the interest, and a clear picture of what’s sold nearby.”
Shiner said agents could also reduce the risk of buyers pulling out at the last minute by encouraging them to complete due diligence early, including securing finance approval, having a solicitor or conveyancer review the contract, and completing building and pest inspections.
“Buyers walk away when there are unanswered questions.”
Building buyer relationships
With FOOP likely to remain a feature of the market, Shiner said agents needed to become more proactive in maintaining relationships with prospective buyers rather than relying on open home attendance to generate interest.
“I think the easiest way to overcome FOOP is to really know your buyers. Keep a hot list of your top 30 buyers who are actively looking, and call them proactively, every single week.”
Shiner said agents needed to stop treating buyers as one-time opportunities and instead build relationships that keep them engaged throughout their property search.
“Once upon a time, buyers were like plastic bottles: one-time use. Now we have to recycle them.”
He said that understanding buyers needed to go beyond their property requirements, with agents taking the time to learn about their lives and interests to build stronger relationships.
“The more time you spend with a buyer, the less they’ll see you as a real estate agent, and the more they’ll see you as part of their team.”
Want to see more stories from trusted news sources?Make Real Estate Business a preferred news source on Google.
