Recently many Singapore Property Developers have been busily launching new projects and condominium developments with breakneck speed.
And Singapore Property Agents have been getting lured in because the agent commission for selling new launch condos can be as high as 6%.
It seems every agent is now already (or planning on) selling new launches.
And apparently everyone and his pet cat is jumping right in after seeing everyone else doing the same thing too.
(Kinda like monkey see, monkey do. And parroting the same story about first mover advantage, getting it before TOP and then selling it off, how freehold properties are overrated, how tenants don't care about freehold, low enbloc potential, ad nauseam...)
But what almost nobody realises is that there are hidden dangers of selling new launches (apart from prospects knowing by heart property agents' sales tactics).
The Hidden Dangers of Selling New Launch Condos (Despite the Giant Commissions)
If all you do is to sell what you have to sell, you may eventually end up failing as a real estate agent.
Why is that?
Because I have learned that most property agents offer what they have, and for most, that is:
- either their listings (that are not selling) OR
And many agents simply jump on the new launch bandwagon just because every other property agent is doing that too.
That is, it's the popular, cool thing to do (which is typically what most agents do anyway, copy other agents blindly).
Or because the commission given out by the developer (to sell something that isn't really selling) is a massive 6% to sell a new launch.
That is, it's financially more lucrative for the agent, never mind the fact whether or not home buyers truly want that.
I think this is why so many property agents fail.
Real Estate Marketing 101
Real Estate Marketing 101 is to figure out what home buyers WANT.
- what kinds of houses,
- how much,
- features and
- benefits those homes have to offer,
and then go create ads that offer all of that.
It really is that simple.
It makes no sense to have 20 S$1,000,000 new launch condo listings if home buyers don’t want them, but instead they want 40 S$575,000 homes.
A good way to go broke in a hurry is by pursuing real estate NOT in demand, and a good example of being IN the real estate business instead of being IN the Marketing Business.
So the question is, how do you find out what kind of real estate is actually in demand, so you can focus your marketing efforts AND get a positive ROI?
The one thing you can never do is to make assumptions.
That will cost you your career. I guarantee it.
Therefore, you use
- reliable statistics &
- informal surveys
Using Reliable Statistics to Gauge Real Estate Demand
Using statistics to find out what is in demand and what's not selling is critical.
You can use many statistical tools available to you, either from your property agency, government and companies offering such services online.
They're just a Google Search away from you.
You will need to analyse the data and make sense of the numbers in order to conclude what is in demand and what is not in demand.
In fact, Artificial Intelligence is going to make this task even easier in the future.
But it's an area that is still developing.
And that means we still need to use our brains.
Which brings me to the shortcomings of these tools...
Disadvantages of Using Online Statistical Tools
However, using these online statistical services and tools may have some disadvantages for you.
- They may be costly or require ongoing financial commitments,
- The full (or even partial) information may not be publicly available yet.
- It may require additional expertise in data analysis to interpret numbers
In that case, there is a second, cheaper alternative for you to uncover the unknown.
And that is the old fashioned way by simply asking real people on the ground. Asking 5 other real estate agents is NOT researching.
(Another reason you cannot ask realtors is because they are not your prospects. Neither are they being objective.)
The Art of Asking Questions in-Person (aka Informal Surveys)
You simply ask your prospects and clients what they want to buy or sell in real estate.
For this to work, you must ask at least 100 different people over a fixed time period.
Asking 1 person is very myopic and you'll never get the full picture.
Asking can be the hardest hurdle for you, but in practice, it's the easiest thing to do.
(If you can't even muster the courage to ask prospects what they want, then maybe, you shouldn't be in sales!)
In fact, drafting informal surveys and forms can get a lot of responses.
Plus, its dead simple to create such questionnaires using online tools.
(Again, all these tools are a quick Google Search away. You can even use Google Forms.)
And after you've done that, just give it to them.
Once you have their responses, you will need to read between the lines to pick out diamonds and ignore the duds.
This means you need to filter out emotions and be willing to listen to uncomfortable feedback.
This is how you will have extremely valuable information that will put you ahead of every other property agent out there and cushion you from any upcoming disruptions or downturns (which have been increasing lately).
Now, that is advice you can take to the bank.
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Yasser Khan is a real estate coach, speaker, and trainer at YasserKhan.SG who teaches Realtors how to make more Money, have more Time and enjoy more Freedom without all the B.S.
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