By Ayman Alashkar – Founder & CEO – OVERWRITE.ai
At the start of 2021 I made an economic prediction about the Dubai real estate market and where it’s headed during the first half of the year.
Four months later and the market’s on a roll. Transaction prices have been appreciating and volumes are at record levels. So is this the best time to invest in Dubai property?
All in a day’s work
As an agent, your role is to guide your buyer. To provide neutral, meaningful advice designed to marry your buyer’s wants (or indeed needs) to the properties you offer them. It’s your job to understand your buyer’s concerns and distinguish between those of them that are trivial, from the genuine deal-breakers.
It’s not easy. Let’s face it, you’ve most certainly dealt with at least one buyer who lets emotions get the better of them, somehow finding reason to knock back even your most fitting property. To be fair, there are many genuine reasons why buyers will not make an offer on a property you’ve shown them. But let’s assume that you’ve put your best foot forward and presented a property that satisfies their criteria. In budget. Right location. Good value. Tick. Tick. Tick. What can go wrong?
Here are six reasons why your buyers might NOT make an offer on a property you’ve shown them, even if it ticks all their boxes, and why that would be their mistake.
1. “I want to wait for its price to come down”
Seems sensible enough. Why pay more for something if you can pay less? It comes down to what’s motivating your buyer right now? Something’s got them looking into the market. And in this market, that ‘wait-and-see’ approach is much more likely to end with someone else buying the property while your buyer dillies and dallies. Our research has found that the average TOM (time on the market) for a desirable, well-priced residential property in a hot market like Dubai, is 16 days. That means that a well-priced property is likely to receive multiple offers. If your buyer drags their feet, well…you know the rest.
2. “My (pick any relation) doesn’t like it”
People’s opinions matter. When we make big decisions most of us typically canvass the opinions of our friends or family. Some years ago my wife and I made a last minute change to the name we’d planned to give our new born, because one of our closest friends said it sounded old-fashioned, planting doubt in our mind. When it comes to dropping big-bucks on a property, buyers will inevitably seek second (and third) opinions. Make sure to remind them that it is they, not their nearest and dearest, who will be the net beneficiaries of the property. Whether it’s for your buyer’s investment or owner-occupation, you must always reframe the opinions of others in relation to the benefits your property offers its ultimate owner.
3. “I don’t like the (pick any feature)”
No buyer ever bought a property because of one single feature. They consider the myriad features and benefits that a property offers before hitting their ‘buy’ button. The same argument works in reverse. Don’t let your buyers decide against a property because of a single feature, especially since it’s usually something cosmetic; for example they may not like the kitchen or the carpeting. More often than not, the solution’s simple enough. Focus them on the big picture and don’t let them sweat the small stuff.
4. “I think mortgage rates will continue to fall”
That’s not happening. If anything, the global economy is about to roar back into consumption mode after nearly a year of shut-down. Fuelled by supportive monetary policies, billions of $’s in liquidity and a successful vaccination program, the accepted economic wisdom is that the US economy is now like a super-charged bull in a pen, and the gate’s about to be swung open. Markets are watching the Federal Reserve Chairman’s statement later today for any signal that he plans on starting to taper their bond-buying programme. Expectations are that price inflation will follow the surge in consumption and that the Fed will inevitably have to raise rates when it sees that data come through. I’m not saying such an announcement will be made today, nor that rates are going to rise in the coming quarter or two. However there’s very little probability that interest rates will be reduced from here. The path of least resistance, is up. The Dirham’s dollar peg means the UAE’s central bank must follow where the Fed leads. If your buyer believes otherwise, I’ll be glad to sit them down and have a quiet word.
5. “There are already other bids”
One of our earlier NewsBites covered how to win a bidding war. But before any of those tips can be used, having a buyer that’s deterred by the fact there are other bids, means you have to go back to basics.
If there are other bids that means there’s something right about your property. All the more reason for your buyer to put their bid in the ring and move on it. Highlight the selling points. Sell it with a story 😉.
When demand runs high, so do landlord expectations. Those expectations aren’t always met and quite often a landlord is forced into making an about turn, accepting a bid lower than they thought they’d get. It’s on you to remind your buyer that for all these reasons, there’s no harm putting a bid in. As the saying goes, “You got to be in it, to win it”.
6. “I want to wait for the ‘perfect’ time to buy”
I’m a firm believer that mature, stable real estate markets survive by the transparency and breadth of their data. When you have rich market data, you’ve got everything you need to analyse market cycles, reduce volatility and correctly time your entry. Dubai’s real estate market data quality, improved as it has in the past 20 years, is nevertheless a work in progress. The market, while maturing, isn’t yet mature. That leaves it open to sentiment driven cyclicality. When the climate is bullish, people buy property. When it’s bearish, they don’t.
That said, we all know the well-worn adage that the perfect time to buy is when everyone else is selling. That’s not where we currently find ourselves. Right now we’re in a bull market. So if your buyer suddenly pulls this ‘reason’ on you, you’d be forgiven for labelling them a time-waster and walking away. But don’t rush to judge. Most people simply need to hear you reiterate to them the reason they’re shopping for a property to begin with. Tap into their motivation. Centre the advice you give around that core motive.
Let the music play
Managing your buyers is no Saturday stroll through the park. The process is emotional. Complicated. Prone to collapse despite days and weeks of effort.
This is where you must harness your inner ‘Concert Maestro’ and show them that you can direct the process seamlessly and effortlessly. That you’ve got everything covered. All that’s required is for them to sit back and watch you work your magic. Of course there are hurdles. But you’ve done this a hundred times. Like a poet with a pen, or a maestro with a baton, you are in your comfort zone, and your buyer is in good hands. Let the music play.
An AI Implementation Strategist accredited by the prestigious MIT in Cambridge, Massachusetts, Ayman also has a Bachelors Degree in Mathematics from the world-renowned Queen Mary College, University of London, and a Masters in Real Estate Investment and Development from the University of Reading (UK). With 20 years’ experience working in real estate, banking and artificial intelligence, Ayman is the founder and CEO of PropTech platform OVERWRITE.ai.
OVERWRITE.ai is a world first, user-friendly marketing solution that allows estate agents to instantly autowrite unique, search-optimised property listing descriptions, taking the boring out of the daily grind.