There are the 3 keys to making money in Real Estate in today’s market. I’m going to cover #3.
(Here are those 3 things as a reminder)
Step #1: Take listings.
Step #2: Get them priced where they will sell.
Step #3: Negotiate offers with the buyer’s agent and facilitate the closing.
I still remember one of my first sales as a buyer’s agent on a team. I was just transitioning from being an administrative assistant to becoming an agent. The team leader had had this house listed for 4-5 months. The seller was financially well off, so his motivation was low. He had listed the house wanting to move out of town for his wife’s job transfer. They had wanted to move out of town for a while, but the job transfer is what go them going. I was the person that put up the sign, took the pictures, and put the home into the MLS. That is why I happened to know quite a bit about the seller.
When we got an offer from my buyer 4-5 months later his motivation had declined. His wife’s job offer was gone, and therefore they didn’t need to move anymore. The house was listed at $499,000, and the buyers offered $460,000. The seller’s motivation had declined quite substantially by that time. The seller wouldn’t reduce his price one bit. The buyers increased the bid to $480,000 but after that they wouldn’t increase their bid at all. What a quandary!
We had worked on this listing for 4 months. I had driven out there to take pictures twice. All that time was going to be wasted because the seller wasn’t going to re-list when the listing expired in 2 months. The Team Leader finally reduced his commission by $3,000 and told the seller that he would probably never get another offer for in the next 12-24 months. This was true because it was a high end and there weren’t that many buyers for them. Finally, the seller agreed to take the $480,000. Here’s what I find interesting.
The seller probably would have taken that $480,000 sooner if (and only if); the agent had developed a better relationship with the seller.
That seller had gotten aggravated before because he hadn’t heard from the agent for 2-3 months before the offer came in. Therefore he saw this situation as just a desperate agent (who he happened to be listed with) who knew this was his only shot at a commission. That is why I call my sellers every week and you should too. It makes pricing and price reductions so much easier.
Do this, and real estate makes sense again. Who knows how long it’s going to take to see a big turnaround in the market. Until then, if we’re going to survive, (and don’t want to spend all of our time working with buyers) then we’ve got to get our listings priced so they will sell.
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Ben & Chris Curry The Short Sale Agent's Advocate
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