Whether you are a real estate investor or a realtor you must be noticing a change in property sellers’ attitudes in the last year or so since the housing recovery started to take roots?
Before the housing bubble of 2006 – 2008 there were plenty of property sellers willing to list even though a staggering 57% of property sellers did not manage to get their places sold at an acceptable price within the standard six months listing. Many of these sellers soon tried again often with a different agent and still did not manage to get their places sold. Problem is if you paid top dollar in-between 2006 – 2008 then the chance is the price after the housing bubble could be up to 30% less than the seller paid.
Even today with the recent housing upturn and price increases of 15% - 20% it’s still often the case that property sellers who paid top dollar before the bubble burst may still have to sell at a loss today. So nowadays when agents prospect the expired and withdrawn sellers from 2006 – 2008 often find that people wanted to move for various reasons like being close to family or downsizing. That motivation for moving is still there it’s just the thought of taking a financial hit that stops them listing again. Also when expired are called up by agents who promote their services and try to persuade property sellers to list again. All kinds of objections are made like I don’t want the hassle of keeping the place clean and tidy and the pain of holding open houses. Also many of these prospects resent paying agents full commission which is often 6% - 8%. Then there are legal costs and moving costs and possibly property seller’s bank may insist on an appraisal to determine the condition and value and promised loans may be contingent on a satisfactory appraisal.
We keep reading there is a shortage of inventory but really the problem is the folks still in limbo after the bubble. This situation affects that group and is a major factor for not wanting to list. When called by real estate agents about listing the response is often like this: “Bring me a qualified property buyer and I will guarantee your commission (usually 3% - 6%)”. Real estate agents prefer people to list and that listing can be seen by other agents on the MLS. Also, it is necessary to have a marketing plan that help to promote a listing that goes beyond sticking a “For Sale” board in the yard and can include radio campaigns and selected newspaper, magazine, and online advertisements. Other than that, having a blog page in the website can also be part of the marketing plan. In addition, it is a sure ball if you can find a real estate investor that is seen as an expert in this field of buying and selling properties and has been mentioned or referred to you by other property sellers. It is definitely the case that listing gives your house the marketing exposure it needs and it is best way to get your place sold.
Real estate agents have to work even harder these days to get listings or Co-Op arrangements that give the agent broker protection to receive a commission. The “bring me a buyer and I will pay your commission” is frequently the stock response prospects give and now this thinking is rubbing off on property sellers who don’t fall into the group who paid top dollar before the bubble burst.
Another group of property sellers that agents like to prospect are the “fisbos” or For Sale By Owner’s and it used to be true that 90% of FSBO’s eventually list with an agent. This is also changing as many real estate investors with a network of professionals like attorneys and realtors are selling without the help of real estate agent. For the individual who is just wanting to sell their home as a FSBO have many pitfalls to overcome and they tend to get rock bottom price offers if any and may waste a lot of time and get disappointment from showing their place to unqualified buyers.
The point is that in real estate nothing stays the same and situations are dynamic and your standard operating procedures and call scripts need to be reviewed and updated regularly. The cake is still the same size but agents had better be on the ball to keep the same slices.
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