May 2017 – Is the housing market showing signs of slowing in your area?
Reports before Easter from the likes of the Royal Institution of Chartered Surveyors (Rics) and the UK HPI Property Transactions Statistics suggested that the number of completions over recent months had fallen. Estate Agents had on average just 43 unsold properties on their books according to the recent Rics survey, the lowest figure since the survey began in 2000. Many Agents also saw a fall in the number of new instructions in March rather than the usual seasonal increase.
Now Rightmove say there are signs of a ‘strong Spring market’ with the average asking price this month cross England and Wales standing at £313,655, a record high. But every property for sale in my local estate agents here in Hampshire is now priced “Offers invited around £xxx,xxx” with, I perceive, fewer ‘sale agreed’ stickers.
Mixed messages you might think. What really matters to conveyancers is not the transaction price but the number of actual transactions they handle. Now, to add further uncertainty, we have a General Election to look forward to, to be followed by the uncertainty of the Brexit negotiations starting just a few days later.
No market likes uncertainty, but if we are faced with a slowing market and fewer property transactions in the months ahead then that will result in falling overall revenues being generated from conveyancing. The question is then, what are you going to do to protect your business from falling revenues from conveyancing? You have three stark choices, you can:
- simply accept that you are not going to be as busy as you would like to be which, without cuts to your cost base, will be seriously damaging for your profitability
- increase your pricing to mitigate some of the fall in income, or
- determine to get better at converting more of the enquiries that you have into additional new instructions.
There is potentially a fourth choice, convert more opportunities and increase your pricing.
Each enquiry has cost your firm money to generate and importantly is a real opportunity to earn new fee income. Enquiries should not be seen as an interruption, inconvenience or nuisance as appears often the case now. Each new enquiry is actually a ‘sales opportunity’ and your team needs to be trained beyond the simplistic matter of how to generate a quote.
Our experience of calling hundreds of conveyancers suggests that enquiries for quotes really can be better handled than now. It is not good enough just to quote a price or simply seek an email address in order to send your quote. Too often there is no follow-up call (sometimes we are not even asked for a contact number!) so the opportunity disappears into the ether as if it is not important.
Competing on price alone does not make for a sound, longer-term business model. I am not suggesting for one moment ‘hard selling’ but firms need to learn how to help the prospective client to understand the value of their service and to ‘buy’ their service as against a competitor provider, for reasons other than just price.
It really is possible to win more new instructions, whatever the market. The most cost-effective way is for your quote providers to be properly trained in how to handle new enquiries better. You will then convert more enquiries into new instructions, generate more of the fees you want and protect, even grow, your profits.
The investment in proper training will produce a return many multiples the cost ad infinitum.
The choice is simple, you can accept that your percentage conversion rate will stay the same whatever the market does or improve your conversion rates by investing in training your team in how to win more instructions, often with higher pricing too.
Better conversion rates = more instructions = more fee income = increased profitability
If you want your firm to win more instructions, higher value instructions
or simply be more profitable, then email firstname.lastname@example.org
to request an initial free, no-obligation chat.