Real estate buyer confidence and expectations have dropped to a low level, which reflects the widespread industry concerns for the real estate market this year. Many economies had started to recover from the pandemic, but they have now been disrupted by the ramifications of the conflict in Ukraine; like social impact, inflation and the dreary outlook for purchasing homes. In this article, we consider how agents can still connect with buyers amid these concerns.
The consequences of the conflict in Ukraine among other worldwide events, are seen in surging energy costs, above-average inflation and rising interest rates. Opportunities for growth and a good return on investment do still exist, but the equation of what makes a good deal in the buyers’ mind has changed. Before further discussing the current mindset of buyers – an important part of this equation, let’s start with the basics about what qualities buyers are looking for in their real estate agent:
1. Technical savvy
Buyers want an agent who’s plugged in, who has a social media presence and pleasing website, and who can help them find homes in the most digitally savvy ways possible. Buyers want to schedule showings via apps and websites, and they want timely text and email communication.
2. No pressure sales
Today’s buyer does not want a hard sell, nor do they want their agent to push them or pressure them toward a decision. Buyers want information that will assist them in their decision-making, not an agent who assumes to know to make their choices for them.
3. Local knowledge
Though buyers want tech-savvy, they don’t want a representative who’s inaccessible or far away. Most buyers searching for things like “realtor near me” when looking online, and they want someone with intimate knowledge of the exact area they’re buying in.
4. People skills
Buyers want someone they feel comfortable and at ease with. Friendliness, politeness, and just plain being nice are huge priorities for buyers. They might love house hunting online, but a personal connection with their agent will go a long way.
5. A partnership
In general, buyers want an ally who can guide them through the home buying process and help them from start to finish. They want an agent who has their best interest at heart and who can partner with them every step of the way; from finding potential homes, touring properties, finding a lender and, ultimately, to signing the closing papers.
Understanding the mindset of today's buyer
The term ‘real estate’ in the buyer’s mind has expanded beyond the realm of residential, office, retail and industrial property, into a diverse list of investable assets. The impact of the pandemic has given rise to focused speculation over how people desire to live and work and what that means for housing demands and preferences within the built environment. The coming years will be much more about monitoring just how the industry oversees the distinctions (or combinations) of varied property types and how consumers approach the market.
Ways you can connect with a property buyer
In most cases, hiring a real estate agent is the most popular way to buy or sell a home. Be mindful to exhibit the qualities listed above and keep in mind the preferences of generational buyers. Here are some more ways that you can connect with the property buyer:
Document management: Agents are relied upon to navigate property law, obtain and prepare the right documents and surveys, check on planning permissions, and get the requisite consents and certificates. Agents also can assist with the legal structure in place for a co-ownership, by obtaining the Annual General Meeting minutes to investigate if the block or complex is well managed or not.
Local knowledge: Encourage your buyers to make a list of questions to ask, so they are fully informed during the process and will remember to analyze the property with a critical eye. Buyers can get swept up in the excitement and often overlook potential downsides, like necessary renovations and access rights to private land and lanes. The farmhouse in the countryside might be a dream in the summer sunshine, but help them to think about mid-winter flooding, when it’s grey and dreary and the nearest supermarket is an hour’s drive away. If buyers are looking at a city apartment, encourage them to visit the area on a Saturday evening. Today’s buyer will appreciate your input and value your role in their buying project.
Professional advice: Buyers may underestimate renovation work, especially when interested in an old property or a conversion. Advise them to consider the costs of hiring architects and builders, and to pursue planning permissions. With the increased costs and supply challenges in the construction industry, help your buyers be realistic with their timeline and budget – in fact, it is best to overestimate these.
Build trust: Building lasting and trusting personal relationships is critically important to most homeowners who often expect to establish strong bonds during a business deal. People tend to want to do business only with those they know, like, and trust. Agents can proceed with serious business discussions after the buying client has become very comfortable with you. If you appear unwilling to spend the time building the relationship, the buyer will tend to distrust you.
Know about alternative energy options: High energy prices were already a cause for concern for home buyers and owners last year, but the latest price increases are now likely to cause many to rethink their use of fossil fuels for heating. Higher energy prices are impacting ancillary costs and the demand for energy renovations in the real estate market. Your clients will have energy efficiency on their minds and if you know about newer technologies or options for retro-fitting existing heating systems, you will find that helping them to find cost benefits will appeal to them.
Respect family dynamics: The process of young people starting work and moving along the path to independent adulthood is taking longer – due to many impacts of social and economic drivers for the market. Oftentimes, parents will help their children with a financial boost to gain their first home, so remember to handle this situation with tact. The parents are a support, but the ‘children’ are now adults and expect to be treated as such. You may find yourself negotiating with two very different generations, both of which believe themselves to be the key player in the home-buying process.
Know about living arrangements: Home sharing is a solution for the young adults who do move from the parental home, and this group are more open to sharing with a partner (with or without children) or even a co-op of professionals. There is currently a gap for the housing needs of the population who are seeking affordable housing and are keen to have a place of their own in an urban area. These young adults are looking for flexible solutions to the high costs facing them, with financing and rising prices. As more young adults dream of living in their own home, creative living arrangements are becoming an increasingly important topic. Helping them to find solutions is sometimes necessary for their home purchase.
Time for a fresh approach
Advancing technology and changing consumer habits have already caused change in traditional business practices. The future of real estate will require recalibration from the practices that had been developed during a decade of ‘easy money’ to the new financial realities and socio-political factors in the real estate sector. For those that can make the recalibration, opportunities still exist. A new approach is required. 1
Think differently and consider how you can deliver operational resilience and flexibility by embracing new skills, technology and artificial intelligence that is now growing in other sectors. Enhance operations in real estate too!
Think relationships rather than business transactions. If you tune into the needs of your clients and understand the connections between their demand, the environment and the infrastructure, you will unlock value.
Think ‘better’ about the right thing for the environment, society and your business. Focus on how these new approaches will be increasingly likely to get better and more resilient returns.
At Properstar, we, too, have seen the fundamentals of the real estate sector change and evolve, and we have responded with products and services that meet buyers and sellers right where they are. As a long-term player in the real estate sector, we invite you to join us as we continue to contemplate new and flexible approaches, supported by an abundance of data that drives new insights.
More about Properstar
Properstar is a real estate platform that connects sellers and buyers through an extensive network of qualified agents since 2018.
We offer innovative solutions to facilitate, simplify, accelerate and secure your clients' real estate projects, whether with our tools, our expertise or our support service. We operate in 4 markets (France, Switzerland, Portugal and Spain) in Europe and the United States.
Properstar's parent company, ListGlobally (2012), is a global leader in publishing online listings and works with over 100 property portals in over 60 countries, enabling agencies and developers to reach an audience of over 200 million potential buyers and investors.
Sources:
1 PricewaterhouseCoopers/Time To Think Differently Real Assets report
