Bob McCullough, Orange Coast Title President, gave an address this morning at the Mulhearn Realtors advanced training session in Bellflower, California. Bob is a great speaker and he taught agents how to position their clients, in the front of the line by learning how to think outside the box:
Try to adjust your business model, the market will require you to make adjustments in how you communicate to your clients.
Buyers are afraid of buying too high, Sellers are afraid and nervous of losing money. Sellers are frustrated because they did not sell last year. But, you Mr. Realtor, need to get me today the net of what I would have gotten last year for selling my home then!!!
Find out why does the Seller wants to sell? Over the last few years we did not have to be engaged in why real estate owners were motivated were motivated to sell.
Here are some dialogues to utilize:
"How would you describe your current finances? Are you upside down, breaking even, or rolling in the dough?" This will give you an idea on their current motivations.
"So, what are you going to do with the money when your home sells?" Normally, they can just put the money in their pocket, or they could possibly purchase another house. In this market, there are a couple of factors that could effect their decision:
"When do you want the property to sell?"
Why do listings expire? Because the property is over priced. The proof is that if you listed the property for $1 then it would sell immediately and probably have multiple offers.
What is the Definition of a Buyers Market? That is when there is more inventory then there are buyers to purchase them. Inventory has tripled in Southern California, therefore, two out of three /Sellers are going to fail, we want to make sure our Seller does not fail. It is really getting to be a fist fight between Sellers out there right now.
Five priorities that you need to address as a real estate in this market:
1. Incentives in the market.: We need to get a low price and lots of traffic to the listing. Therefore, if we give strong selling commissions say 3 1/2-4% to the selling agent more agents will show the property. Current buyers want bargains!!! REOs, listings that have been hanging around for 6-9 months. This market is driven by good deals and terms. If you have say 50 houses for sale in a neighborhood, the average realtor will only show 3-5 of them to make a sale. Therefore, you only have a small 10% or less chance of having anyone even look at your home. You must notch up the likelihood that will happen by giving these incentives.
2. Price If you're dealing with a Seller who just wants to see if they can get their price, then you're wasting your time. Time is money. Time is your most precious asset. Make sure when your working with a Seller, make sure they are worth working with you. Treat all of your Sellers as buyers first. Utilize the aforementioned dialogues. Remember they can't buy until they sell. Show them that if they sell low then they will also buy low. Sellers will take a contingency offer right now. Be South of the middle of the market in price.
3. Terms Seller vs. Seller street fist fight thug fest. If there are only 5 buyers available, we need to figure out how everyone else is challenged instead of your people. Talk to the Seller about buying down the rate for the buyer. This will make the new payment much more attractive and the new buyer doesn't have to make as much money to qualify for the home. This will help you put your Seller in the front of the line.
Sellers may have to actually carry back a 10% second trust deed to help the buyers get in. This will open up the home to a lot more buyers. Remember the sellers get interest on this trust deed, a lot more then in the bank. The note may also be sold later to a private investor.
4. Finding Trades Look for opportunities to trade. You might be able to find another Seller who might want what your seller has. Every time you advertise, make sure you let the news out that your seller is willing to look at trades.
5. Make sure the property and your Marketing Material are top notch. This is critical. Do not list a property without pictures on the MLS. It is not normal for people to list a property without a picture, as a matter of fact, it is probably better to do a virtual tour. Make sure there are fliers in the box and have a good yard sign positioning. Consider staging the house.
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