Buyers and agents are getting worn out in this extended seller’s market. Here are four ways to help everyone cope.
We all just need a break. Maybe someone could hit that damn “easy” button anytime now? Well, that isn’t happening, and we are seeing the casualties begin to pile up in this “good market.”
The funny thing is that good markets, like good economies, are actually in many ways harder to work in — or at least they present a unique set of challenges that aren’t always visible on the surface.
We are arguably in the seventh inning of one of the longest economic expansions in this country’s history. It’s time to take a break and assess where we are and what collateral damage we are taking on. Buyers and agents are getting worn out in this extended seller’s market.
The highs and the lows of the practice of real estate are very real for us as agents, but they are even more so for our clients. Just consider how exhausting a multiple offer scenario is:
When a property receives, say, five offers, the unseen truth of the matter is there are five agents doing the exact same thing all at once. After identifying the property as a potential candidate for a client, they research the property — finding out its history, compiling a dossier on the community, amenities, schools, services and location. Then, the agents must coordinate the showing, juggling multiple schedules and needs to find just the right time that will work for everyone involved.
If the clients fall in love, the agents must go back into research mode, finding comparables and histories and data to establish an offer price. Then the agents must meet in person or conduct a conference call with their respective clients and discuss pricing and market data and then, because they know it’s a hot property, they must come up with their offer strategy.
Once that is all established, the agents must track down the lenders, get updated approvals, create the offer, get it signed by the respective parties, and strategically present it as the “Best offer the seller is going to receive” — whatever that may be. Only then to receive the “multiple counteroffer” response or the “We went with a stronger offer” response.
Have you ever thought about how much human productive capital is being depleted in this scenario? Have you ever thought about the fact that with five competing offers, four agents aren’t getting paid? Have you ever thought about the impact on the other four families that didn’t get the house?
Well you should. Because the truth of the matter is that there are only two likely scenarios if this situation plays out multiple times for the buyers: They will either fire their agent, deeming them at fault for the situation (whether that is correct or not is a topic for another day), or they will say those dreaded words, “I think we will just rent.”
Either way, the agent who has invested time, expertise and reputation ends up with nothing. And the clients end up with nothing. Multiply that times four just in this example, and you can see why agents and buyers are getting worn out!
So, what can you do? Short of getting multiple families to shack up together, I’ve got a few ideas for you.
Step 1: Find out why you are such a loser
OK, that was harsh — but realistically, when you lose out on getting the property there was something that either you did, or your client did that put your offer in second or third position when the sellers reviewed them. You need to find out what it was.
By learning from failure, you will improve what you do and how you do it. Sometimes it is hard to find out from the listing agent exactly why another offer was chosen. In fact, that listing agent doesn’t owe you anything; neither does the seller.
Know that it isn’t in the best interest of the listing agent to immediately disclose why the seller chose another offer. The listing agent has a whole new set of circumstances to navigate now. They need to get through inspections and appraisals – both of which might be huge unknowns, and there is always the potential for the selected offer to fall apart.
So, the listing agent is right to play their cards close and not disclose to you what’s happening, but eventually they will be able to, at least somewhat. You need to get the information from them when they are willing to share. I believe all agents are willing to help each other and give advice, but they have to focus on their clients first.
A listing agent is going to be way more approachable and open after the home closes, rather than the day after accepting a competing offer. Be patient. And remember: Being nice goes a heck of a lot further than being bitter. Your offer lost. There is a reason — but its business it’s not personal, so don’t take it that way!
Step 2: Talk to your broker and your colleagues
Stop operating in a vacuum, and you will learn so much. Your broker has the opportunity to be exposed to multiple strategies for positioning offers for success, as well as the opportunity to review every offer that comes through the brokerage.
They see things. They see the things that work. They want you to know what works and what doesn’t. Tap that resource. Your broker is invested in your success. Use his or her unique viewpoint to learn strategies for success.
Talk to the other agents within your office. Ask to have a multiple-offer strategy meeting at your brokerage where agents can share what they do, and how they do it for the best chance of success. Chances are, one or two agents within the office have cracked the code and have a way higher success rate at getting offers accepted than the masses.
Step 3: Understand that your reputation within the agent community will either open doors or close them
Want to know a secret? You matter when you present an offer. Your reputation matters. Your attitude matters. If you are continually confrontational and aggressive and challenging to work with, guess what? Other agents will not want to work with you.
Sure, it’s ultimately the seller’s decision, but if the seller hears from their trusted agent, “I’ve worked with this agent before, and they tend to try to renegotiate and play hardball all the way through the transaction,” guess what happens? The seller may select another offer just based on the fact that your reputation preceded you. Don’t be that agent. Other agents are your force-multiplier: They can help you grow your business, or they can help you watch your business whither. You decide.
Step 4: Don’t be lazy
Honestly, I am continually surprised by the practice of sloppy real estate. I see contracts come in that aren’t filled out correctly, agents writing things into contracts that make no sense and, at times, put their clients into bad situations.
I see agents writing up offers for buyers who haven’t even bothered to apply for a loan yet. I have seen, on multiple occasions, agents making offers for clients that have no chance of being accepted for all these reasons and many more — mostly because the agents either don’t want to bother doing it right, or they don’t know how to do it right, or, even worse, they allow their client to direct them to do it wrong!
Who’s the supposed expert here? Why have an agency relationship if the client is just going to do whatever they want to their own detriment? Do the work, learn how to do it right, find support to make sure you are doing it correctly, and work with clients that respect you and follow your guidance.
There is no way to stave off all the challenges that exist for buyers and agents in this current market. And as we all know, eventually it will change — and then we will all face a new set of challenges. But there are agents out there practicing real estate the right way. Honor them and learn from them so you too can be the agent who wins more times than loses.