Here in Fairfield County we have sellers and buyers who are waiting to decide what to do in a tricky market. The problem with waiting is essentially these clients are leaving money on the table. Sellers who take too long to properly price their home to begin will find that token price adjustments leave them still positioned incorrectly in a market that is declining. When they finally do sell the home it ends up being for a lot less than if they had priced correctly to begin with. Buyers who wait to find the bottom are unrealistically waiting - you only know if you are at the bottom once prices begin to rise, or mortgage rates change to the extent that you can no longer afford what you were looking at to being with.
What I am trying to help agents with in my office is to establish the best working situation with their clients at the beginning of the process. The key is to truly understand what your client is trying to accomplish, what their motivation is for selling or buying, the concerns they have, and as importantly how do they want to work with and communicate with their agent.
Motivation is an interesting topic because we are often hearing that a seller "is in no hurry" or a buyer is "waiting for the perfect home". If you don't dig deeper to understand what those words mean, you and your clients will find that they will miss a market and ultimately be kicking themselves (or you) when their house hasn't sold, or they now can't afford a home. And this usually leaves bad feelings all the way around.
It is critical that you spend the time listening to your clients and asking open ended questions to really determine if what they are telling you is really what they mean. Developing a level of trust to tease out when a seller is truly in no hurry, or really has a financial situation bearing down on them but they are too proud to tell you, is something that will come out when the client believes you have their best interest at heart. You have to care about your client.
There is always a real estate market. For both sellers and buyers you need to really know your market statistics. We are recommending to sellers that they get under the market - meaning they need to be a price/value leader in their category. Show sellers how many months inventory exist in the price ranges that make sense in your market. You may find that they want their house to be priced at $725 K. Your stats might show that between $700K and $800K a 12 month level of inventory exists. However in the $600K to $700K range there is only a 3 month supply. Ask your homeowner if they want to possibly be on the market for 12 months, or would 3 months be better? Getting that home just under $700K might make all the difference in the world.
Build in automatic price reductions with your listing agreement. If a homeowner insists on a starting price that you think is a little high you can write in when the reductions take place and get your homeowners signature on these dates and amounts. I use the three legged stool test to determining whether we want to work with a particular client. In order to sell a property you need to have three things - the right price, the right listing time, and the right commission to support the marketing efforts. If you are missing one of these things the stool is unstable and the chance of a successful transaction is compromised, if you are missing all three you and your seller will fall on your rear ends.
Provide weekly feedback on the market's activity - new listings, pendings, and solds. Your homeowner needs to see their competition - take them out to see what is their closest competition. Let them know that an incorrect price on their home will help the competition sell out before their home sells. And by the time they price correctly the market may have shifted down by another 1% or greater.
For buyers the same principles apply. What is the motivation to buy? Are they speculating or is this a place where the buyer gets to start a new life? Will waiting help them or hurt them financially. As banks continue to tighten requirements for mortgages we are finding buyers who qualified six months ago for a particular mortgage program now do not qualify. Are those buyers kicking themselves? You bet.
No matter what the market there are always sellers and buyers. And great opportunities within the market.
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