It might seem a bit soon to be talking about the recovery, but sooner or later it will come and having worked through the last 4 recessions in the housing market, believe me when I say that the upturn will be the time of greatest danger for most businesses. A lot of residential estate agency firms will survive 2020 by furloughing most of their staff, cutting all possible discretionary expenditure, deferring their VAT bill, deferring their personal tax bill, not paying their corporation tax bill, not paying the rent on their shop premises, not paying business rates and deferring payment to their suppliers. A combination of these actions may keep the lights on for the rest of the year but in 2021 the day of reckoning will inevitably come. The key to surviving the upturn will be to make sure that your business is ready to benefit from it fully when it comes. So, what can you do now to prepare for this? Well here are 7 ideas:
The first thing you need to do is to preserve your current pipeline of sales in progress. The government have told people to postpone their move if at all possible and this is making both vendors and purchasers very edgy so you need to be all over these sales in order to make sure that you maintain goodwill, calm people’s fears and get the sales over the line as soon as possible so that you get paid.
The second thing you need to do is to have an in-depth conversation with every single one of your existing vendors. The last thing you can afford is for them to take their properties off the market, so you need to reassure them that the market will resume soon and remind them that the reasons why they wanted to move are, in most cases, still valid.
The third thing you need to do is to prepare your current vendors for the possibility of a price reduction. No one knows how long this crisis will last, how it will end or what impact it will have on house prices, but some forecasters are predicting a fall in house prices of 10 to 20%. You need to prepare your clients for this possibility
The fourth thing you need to do is to rank your existing instructions in order of how motivated the vendor is to sell. Some of you will remember doing this in 2008/2009. When you have limited staff and resources you must prioritise the properties that are most likely to sell and earn you a fee.
The fifth thing you need to do is to go through all your old prospects to see how many of them are considering a move when the market recovers. These should include valuations that did not come to the market, withdrawn instructions and past purchasers and vendors who may be ready to move again. Now is a great time to making these phone calls as almost everyone will be in and will have more time than usual to talk to you.
The sixth thing to focus on is your marketing. There is a delay of around six months between carrying out a valuation and completing the sale and getting paid so if you stop all your marketing now you will have a big hole in your cash flow in six months’ time. There is great value to be had now. For example, the cost of Google AdWords has dropped hugely over the last couple of weeks. You may get less clicks than usual but those that do click through will be very motivated sellers.
Finally, don’t forget to push cross selling opportunities such as conveyancing and mortgage services. Most of your clients will have more time than usual to talk about these things and each extra product sale will significantly increase your average revenue per sale
The action that you take now will determine how quickly your business recovers from the current downturn so make sure that you use every minute of this precious quiet time wisely.