Give all Buyers a Chance

With buyers in an unhurried mood, real estate agents need to work harder to entice an offer to purchase their client’s property.

Part of this effort is to first identify and categorise buyers into three distinct groups; the latent “would-be” buyer, the “known” active buyer and the “unknown” active buyer.

The latent would-be buyer is the most difficult buyer group to target as typically these buyers are not keenly searching for property and are only galvanized into buying activity when enticed by an especially glossy advertisement or happen to pass a for sale sign on a property “they’ve always wanted”.  Marketing to attract such buyers is usually disproportionally expensive too and it is difficult to measure its effectiveness.

The “known” active buyer appears on an agent’s buyer data base and agents work to service these buyers and secure their loyalty. Known buyers are an important part of a rigorous marketing campaign but represent only a small proportion of all active buyers.

Agents will often seek a “conjunctional” arrangement for properties listed for sale with other agencies, introduce their buyer and be paid a portion of the commission by the seller via the listing agent. In this market, conjunctionals become more common although in some ways are increasingly more difficult to achieve as buyers become more informed via the instant availability of market and property information from the internet. Buyers are therefore more inclined to deal with the listing agent equipped with their own informed views on fair market value.

Therefore, sellers ought to not overly rely on an agent’s promise to deliver fist fulls of active “known” buyers to secure a sale. Very few buyers limit themselves to reliance on a single agent to find them property and either “go it alone” or register their buying needs with several agents.

By far the largest of the buyer groups is the active “unknown” buyer; those that scan the web and search through newspapers to seek out property within their price range and in their preferred locality. Most agents target these buyers by simply advertising their properties in places they know these buyers are looking.

To uncover the best price, sellers really ought to tap into this buyer group as that is where most of the buyers are hiding. Folk that sell to active “known” buyers before they can be seen by the “unknown” types are often left with the nagging feeling that they may have sold for more if they had exposed themselves to the broader market.

by Hayden Groves
REIWA President
REIA Deputy President

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