A tight supply of inventory in housing markets across the nation can lead to the ultimate bidding-war between real estate brokers. Just last year, one-third of all U.S. properties sold went at or above the initial asking price with multiple offers.
While that’s often great news for sellers, it makes for an uphill battle for buyers, and increases competition between real estate agents, who have to vie for the attention and business of what is currently a smaller supply of those sellers.
For some it’s business as usual. Many Realtors are marketing their listings the same way they’ve been doing so for years, adhering to the old “if it ain’t broke, don’t fix it” adage. However, that strategy won’t work for long in this current climate. Sellers want a seamless, short transaction. Buyers want to make a deal or move on. Millennials especially want quick results.
If you’re a broker and you aren’t seeing concrete results from some of your current sales tactics, you might want to consider doing things a little differently. A few proactive steps can ensure you’ll stand out from crowd. If you’re a little more creative in your approach, and your initiative, you’ll find yourself on the path to success. A new action plan might consist of the following considerations:
Shorten the inspection period. A typical inspection contingency is one week after the accepted offer. As a broker, if you can try to get that inspection within three days of the accepted offer, this will shorten the seller’s contingency period. This will allow you to stand out as a broker, making the seller happy the process is moving along so efficiently.
Have your client write a letter to the seller. We know it sounds corny, but having your buyer write a letter introducing him/herself to the seller. Be sure they include in the letter what they love about the house and why they should consider selling to them. This act of thoughtfulness allows your prospective buyer to stand out from the competition, especially in the case of multiple offers. It also enables you to put a personal stamp on the transaction, and come across as a little more personable and invested than the rest of the competing brokers.
Contact the listing broker. Finding out additional information from the listing broker can put you at an advantage against the other brokers. If at all possible, find out the seller’s closing date and target that date in your offer. With that supplementary information, you can work with buyers who are also working around the same timeline.
Finance contingencies: It’s important for brokers to remember that finance contingencies typically create a four-week lag time while they wait to see if the buyers will get financing for the home. If a closing must be done before that, brokers should speak to the lenders and see if the commitment can be made in three weeks. The pre-approval letter (accompanying your client’s offer) should also state that the transaction is not subject to the sale of the buyer’s own property. If it’s possible, try to waive the contingency for financing clause on advice from your lender. This should put you in front of other buying brokers with a finance contingency in their offers.
Do your homework! If the house is priced right, educate your buyers to make a good and fair offer. If the offer is well below market value, you might offend the seller and not be given the courtesy of a response. Manage the expectations of your buyer, with the realities of the market and the needs of the seller. If you can pull that off, you’ll be a trusted expert to your buyer, and a legitimate voice in the seller’s ear.
Don’t dismiss older inventory. Just because a home has been sitting on the market for a while doesn’t mean it should be ignored. Be sure to present your clients all of the possibilities currently on the market. If you have a vision for a home that’s been listed for a while, communicate it in a way that a potential buyer will understand. You might just find them a “diamond in the rough.” More often than not, you’ll be able to negotiate more off an “older listing” than a new-to-market home. A deal here could be a win-win for all parties.
Present yourself in the best possible way. Remember that you never get a second chance to make a first impression, so presenting yourself in a positive matter is always key. Putting forth an attractive offer price can get the seller’s attention right away. Be up front, honest and fair. The money you try to save yourself with a low offer in the beginning may hurt you in the long run, and could potentially lead to your client losing his/her preferred property to a more “respectable” buyer!
Communicate often and effectively. Be in touch with your client as often as makes sense, and do so with as much transparency as possible. So much repeat real estate business depends on trusted relationships, and building those with sellers, buyers and the industry professionals you work with will lead to future success.
As a broker, it’s your responsibility to take control. You’re there to work with your clients and find them their ultimate dream home. Putting in that extra effort into building key relationships can make all the difference. In today’s highly competitive and unpredictable market, a little creativity can go such a long way towards bringing home a sale and ensuring you’re the first call the next time a potential client is ready to make a move.
Sheryl Simon is principal of Benoit, Mizner, Simon & Co.