There are several strategies and tactics that drive sales in property development.
In this post, I talk to Ajay Valanju about how Location Property Group helps developers to sell their product.
How does Location Property Group add value and make sales as well as the various options a property developer may consider depending on the market.
How Does Location Property Group Approach Property Development Sales?
We go and look at the development project, visit the site and look at the floor plans and price to see which ones might make a good investment for our clients.
We would then meet with the prospective buyers with our recommendation.
How Important Is Understanding Your Market When It Comes to Property Development?
This is very important. Our local area is known for downsizers or first home buyers.
The requirements for different buyers heavily influence the local property developments and marketing.
It is costly if you get this wrong.
For example about 20 years ago there was a development in St Ives for over 55’s.
To maximise dwellings, 2-story townhouses with stairs were built.
Most people 55+ wanted one story homes in case they had issues climbing stairs in the future.
So the developer struggled to sell the property.
What Is The Biggest Challenge For Property Developers?
The biggest challenge is the property developers choice when it comes to property development marketing.
Essentially they have 3 channels to choose from:
- Build their own team and spend big on marketing
This would mean spending less on commission to agents in home sales
- Appoint external agent and only pay the agent if they have success
External agent will market to their existing clients
- Exclusive agent
Spend a lot on marketing the property – commission somewhere between 1 and 2
Each option has different benefits and drawbacks.
Which Channel is Best to Sell Property Developments in a Cooling Property Market?
The external agent model is the best in a cooling property market.
The agent can use their good relationships in a time that there is a lot of negativity in the media to sell a property.
Whereas in a buoyant market the developer is more likely to spend on in-house staff and flashy marketing campaigns.
As the market goes through different cycles, property developers will choose different channels.
In tougher times, developers go to agents such as Location Property Group for their property development marketing.
Agents tend to charge a higher fee than it costs to hire a member of staff, so when the market is hot, they revert to spending more in-house.
How Important is Social Media When Selling a Property Development?
Social Media is important for the property developer in communicating the right message to each of its audiences: a) the relationship with the agent and b) relationship with the customer.
Buyers now want to see more information online and will do their research and look up the company on their social media channels.
10 years ago I would sit down with a customer, show them the floor plan, price list and discuss the features of the property. They would sign up to buy the property at the meeting.
Now customers want to go away and google the name of the developer and do some more research before they buy.
In the same light, if I was travelling somewhere 10 years ago, I would have relied on one person’s advice when deciding where to go for dinner. I would have asked a local where to go for dinner.
Now I would go to the Internet and find a review site with suggestions from thousands of people who have visited local restaurants and have provided their feedback.
Social media would definitely have an impact on the way a potential customer (or agent) perceives the developer and property development itself.
If done well, it is a great way to communicate the benefits of your product.
How Does Location Property Group Build Trust with Potential Buyers?
The first step to building trust is to make sure that the developer can deliver on what they are proposing.
We do thorough research to ensure that the developer has a strong track record, this provides a level of comfort for potential buyers.
Some of the things we looks at are:
- What is the developer’s track record?
- How long have they been in business for?
- We go and look at previous property the developer has built and check if it is being properly maintained
- We get testimonials from people in the completed buildings
- Searching online to see their reviews
If the developer has a good record then we can market to our network.
Does Location Property Group Market to Local or Foreign Buyers?
Our business has grown by focusing on local buyers, particularly with friends and family and friends of friends.
Also, it is easier for the local buyer network to get finance than international buyers.
Stamp duty is very high for foreign buyers.
We do have some international clients, however, they have permanent residency in Australia so there are no issues for them here.
Why Do Property Developers Come to Location Property Group?
We have a strong network of property investors.
What distinguishes us is that a lot of our clients own multiple properties.
Whereas many agents will spend a lot of time marketing to a buyer, our buyers are different: they may buy 5-6 properties over a 5-10 year period.
We form long-term relationships with our clients and build their wealth over time.
Our whole team have property portfolios and so can see things from an investors perspective.
We can understand the pressures as a landlord and can make recommendations based on our own experience.
You can read more about our service on the Property Development Marketing page.