For real estate agents, May through August signals prime time to put your head down, pound the pavement and get deals done. You — and your clients — need to be ready to capitalize on the hot selling season, when 60 percent of all homes are bought and sold! And while you’ve been mentally preparing for the upcoming frenzy, your buyers may not have been.
Buyer mindset image via Shutterstock.
Sure, buyers know that in order to prep for buying a home, they need to get things in order — from their must-have list to their financial paperwork. But as the real estate market continues to heat up into the busiest season of the year, there’s one major piece of the puzzle that many a homebuyer neglects to manage at all: his mindset.
Don’t let the failure to manage his own mindset be your client’s downfall (or a loss of your own time and effort!). Here are five spring things agents should remind their buyers now, especially in areas where multiple offers and over-asking sales prices are the norm:
1. Be aggressive. B-E aggressive.
In fitness, there is plenty of research that suggests most people limit how hard they can push themselves because they mentally shut down way before their body physically shuts down. Train for a marathon and the sage advice you’ll receive is that it’s all a mental game — get past that and the run becomes much easier. A mental shutdown keeps us from making the progress we could otherwise make.
And the same goes for house hunting in a hot market. For many buyers, it takes losing a home — or a few homes! — before they realize that making below-market or timid offers doesn’t result in a great deal if it can’t grab the attention of a seller. Buyers should heed the advice of San Francisco buyers, who have been dealing with bizarrely strong seller’s market dynamics for longer than those in other areas of the country: Buyers who mess around making weak offers for too much time can end up priced out of the market or the type of home they were hoping for entirely.
Of course, being aggressive in an offer doesn’t mean blindly throwing money at homes. But agents should smartly educate their clients and share insights on things like:
- How long homes stay on the market in your target neighborhood.
- How much above or below asking homes usually sell for in your neighborhood.
- How many other offers you are competing with on any given home.
Encourage your buyers to use that data to drive their decision-making about how much to offer. Buyers need to be reminded not to let delusions of getting a champagne home on a beer budget get the best of them.
2. Don’t let up once in contract.
For many buyers, the post-contract period can feel anticlimactic, after the frenzy of the house hunt and the drama of negotiations. But if buyers want to get to a successful close and be happy with their home over the long term, they need to stay just as engaged during escrow as they were during the house hunt. Agents need to stress the importance of all of the post-contract tasks — and set up reminders to ensure they get done. After all the time and effort the buyers and agent put into finding the dream home and getting an offer accepted, the last thing you’d want to happen is for things to fall through the cracks. Many buyers don’t realize that things like showing up in person for an inspection or delivering paperwork to lenders promptly can make a big difference in how smoothly a transaction goes.
3. Get comfortable with the emotional Catch-22 of this market.
Conventional wisdom advises buyers not to get emotional about a property. But let’s be real — it’s easy to fall in love with a home, and, frankly, buyers should have some level of excitement about a place that likely represents the biggest financial investment they’ll make.
So, to make an offer at all, buyers should be somewhat emotional about a place. But here’s the Catch-22: In many local markets, a wise buyer should also be prepared to lose at least a few properties before they are successful in scoring the one.
So how do you, their agent, help them do that? Detachment. Let them be excited, but also keep your buyers rooted in reality. This is a house, yes, but there are others out there. Tell them simply, “You do your best, pushing yourself to make the best, cleanest offer you can within the realm of what you can afford and what the comps support, and then you let go of the outcome. When the home you’re making an offer on is meant to be yours and you take this approach, things will fall into place.”
4. See failure as course correction.
As in life, buyers should see every house-hunting “failure” as an opportunity to course-correct their strategy. Every house a buyer makes an offer on, but doesn’t get, can give them clues about the things they can do differently the next time to get them closer to their dream home. If a buyer is getting overbid, it’s the agent’s job to do a little bit of a budget reality check. If the buyer’s dream homes go pending before they get to see them, it’s your job as their agent to send them a reminder about putting this process as a top priority and making the effort to see homes as soon as you let them know about them. Buyers need to work with their agents to understand not working after a couple of unsuccessful attempts to buy a home and, more importantly, put a plan of action in place for course-correcting the way to house-hunting success.
5. House-hunting couples: Get it together.
In the hot spring/summer market, hesitation kills deals. When co-buyers are not on the same page about what’s important, the time between seeing a home, deciding to make an offer and deciding how much to offer can be much longer than it should be. The delay can be devastating — many a dream home has been sold to the highest bidder while a couple argues over whether it’s the one.
It can be a tough conversation for agents to have — and who wants to get in the middle of it? — but it’s important to mediate these situations without stepping over boundaries. Often it can be helpful to help buyers understand how they are communicating with each other — the job of a good real estate agent is to be an expert in communication dynamics as much as any other part of the process.
Tell us! What are some spring things you tell your buyers?