It says a lot about the strength of the UK’s economy that the 2008 financial crisis didn’t bring the new-build housing industry to an abrupt end.
Even in the depths of the crisis, there was still a need for new-build homes and the industry staggered on for about half a decade before an improved economy and government support helped get it back onto its feet.
Now the building of new homes is going full steam ahead and that means that there are potentially great opportunities for estate agents and the construction industry to work together.
Many home-builders (and commercial lettings companies) will have their own, highly-capable, in-house marketers. These people will typically have extensive industry knowledge to go along with their marketing skills and they can be expected to be highly familiar with their employer’s products.
There are, however, likely to be gaps in their knowledge, skills and contacts which an estate agent could fill to the benefit of all concerned. The home-builder gets faster, smoother sales for the best possible price and the estate agent gets their fee.
One of the reasons why home-builders have traditionally been reluctant to partner with estate agents is because of a perceived (or actual) lack of knowledge of the difference between the sales of existing properties (which are the bread-and-butter of the average high-street estate agent) and even standard new-build sales.
In other words, before you get into very specific niches such as shared-ownership schemes or help-to-buy sales.
This means that any agent who wishes to enter into the new-build sales vertical (or expand their presence there) will need to be able to demonstrate that they have a decent level of knowledge of the new-build sector.
As a minimum, they should be able to hold conversations with the in-house marketing team without needing to be spoon-fed explanations of anything which would be considered basic industry knowledge.
Ideally, the estate agent should be as up-to-speed on the new-build sector as anyone working in it full time.
In the context of home sales, local knowledge has a variety of meanings. It covers everything from knowing the dynamics of the local housing market and those involved with it at all levels (including, and arguably especially, those involved in planning decisions), plus its geography, including its infrastructure, plus the buyers who are most likely to be active in that local market for that specific type of property.
Depending on the needs and wants of a home-builder, an estate agent could advise on anything from getting planning consent (by knowing what type of home is most in demand), to features which should ideally be included in the development (likewise), to pricing, to marketing the development to the right people in the right way.
These last points are really an estate agent’s stock-in trade and many of them have invested heavily in developing the contacts, tools and skills to maximize the impact of their sales strategy.
The best estate agents will have the contacts to make sure that they are always amongst the first people to hear about any relevant local news, even if it’s not of interest to the media. They use this to help inform the right potential buyers about an area’s future prospects and show them the sort of community in which they will live and what benefits it brings.
In short, a good estate agent can market an overall lifestyle (which is what people are really buying) far more effectively than the average home-builder.
The main way in which estate agents can add value to developers is to help them to hit the sweet spot where they minimize the time it takes to make each sale while maximizing price. This helps the home builder maintain that all-important cash flow, while continuing to achieve decent profits.
The earlier an estate agent can add their input, the sooner the benefits can be felt. By contrast, if they join the team late, they may have less room to manoeuvre on behalf of the home-builder. For example, they may not be able to adjust prices without upsetting those who have already bought.
Having said that, if a home-builder is struggling with sales, then it may be worth bringing an estate agent on board regardless of how long the development has been on the market as there is clearly an issue which needs to be addressed and an experienced estate agent may be able to offer the necessary guidance.
Mark Burns is the managing director of Manchester estate agents; Indlu. Indlu specialise in both residential and commercial property, including lettings and buy-to-let in Manchester.
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