One of the hottest topics at Inman Connect was how to cope with the low-inventory market. Last week, Jeff Lobb and Stacie Staub discussed three strategies for finding listings in a low-inventory market. Here are 12 additional ways to proactively persuade potential sellers to put their properties on the market now.
Strategy 1: Listings hiding in plain sight
How many buyer leads did you ignore last year? According to the National Association of Realtors, about half of those buyer leads had a property they needed to sell to purchase. If you’re not following up on every buyer lead you receive and asking if they need to sell their current property to purchase their next home, you’re losing one listing for every two buyers you ignore.
Strategy 2: Overcome the contingent sale problem
Knock’s Home Swap program has a powerful solution for those owners who need to sell their current home to purchase their next property. Home Swap establishes a value on the homeowners’ current home and also qualifies them for a new mortgage on their next home.
This enables the homeowners to purchase their next property as an all-cash buyer. Knock provides up to $25,000 in repairs. If the property sells for more than the price Knock placed on the owner’s home originally, the owner receives the overage.
This type of alternative lending program has become extremely popular with new-build homebuyers. Buyers can stay in their current home until their new home is ready rather than having to rent or obtain a bridge loan. Because these programs profit from the mortgage, escrow and title fees, the costs are significantly less than most other programs.
To illustrate how this approach can work in your business, take a look at how Realty Austin is marketing its “Buy Before Your Sell Program” and their “Cash Bridge Program.”
Strategy 3: Referrals are still the name of the game
Regardless of “threat” from iBuyers and Zillow, the 2020 NAR Profile of Buyers and Sellers reports that 67 percent of sellers either rehired their previous agent or obtained a referral from a friend, neighbor or relative.
Consequently, you should spend at least two-thirds of your time and marketing dollars on converting leads from past clients and your sphere of influence.
Strategy 4: The first one who gets face-to-face wins
The 2020 profile also reported 77 percent of recent sellers only interviewed one agent before listing their house. Previous NAR profiles have consistently found the agent who gets the listing is the first one who sees the sellers when they decide to sell, which is why it’s critical to be in face-to-face contact at least once a month with your top 150 contacts who are most likely to refer or do business with you.
Strategy 5: Mind the ‘loyalty gap’
According to the 2020 NAR Profile of Buyers and Sellers, 89 percent of the sellers said they would rehire their agent for future services. Only 26 percent actually did because their agents failed to stay in touch with them. To avoid having a “loyalty gap” in your business, here’s a quick get-back-in-contact script:
Hi John, it’s Sally Agent. It’s been way too long since we caught up in person. I would love to buy you a cup of coffee. Does Friday morning or Saturday afternoon work for you?
Strategy 6: Monitor their social media accounts for significant life changes
People are more likely to move when they go through a major milestone life event such as a wedding, birth, divorce, death, job promotion, etc. At Inman Connect, Lobb suggested using Facebook lists to track these events for your past clients and those in your sphere who are most likely to refer business to you.
When someone is undergoing a difficult life change such as a death or divorce, reach out and ask how you can help. Be caring and supportive. This is not the time to discuss selling. Remember, the agent who is there face-to-face when they decide to sell has a 77 percent of getting the listing.
Strategy 7: Prospect old expireds
This tried-and-true strategy has worked for decades. Search your MLS for listings that expired one to three years ago. Cross-check the public records to determine if the property has sold or changed title during that time.
If not, contact the owner and offer them a complimentary evaluation of what their house is worth. Many owners have no idea how much prices have increased. Moreover, very few are aware of the various types of programs that eliminate the contingent sale problem, letting them become an all-cash buyer without selling their current home.
Strategy 8: The boomer migration is on
Although many boomers are choosing to age in place, a substantial portion of homesellers are selling their current home to right-size into something smaller or to move closer to their children. To identify who these owners are (or create any list you would like to prospect), use REI Source. Here are three categories to consider searching:
- The prime time to buy a second home between ages 50-60. Prospect past clients in your database and homeowners in this age bracket who make at least $100,000 per year.
- Look for homeowners age 60 or older who have two-story homes or homes that are over 2,500 square feet. Due to mobility problems related to aging, many are searching for one-story homes, while others are interested in a “lock-and-leave” lifestyle in retirement.
- Look for older single homeowners, especially women who own single-family residences. Many cannot adequately maintain their properties due to financial or other constraints and may opt for a condo or a lock-and-leave property.
Strategy 9: Remote workers
A different type of list to search on REISource.com are owners of lofts and small condos who make $100,000 per year and would like to be in a larger space. Target industries like technology where employees will continue to be able to work remotely after the pandemic ends.
Strategy 10: Non-owner occupied
I started training this approach back in the mid-1990s when we still had to search the public records using printed books or microfiche. One of my new agents found a single-family rental property and searched for the owner. She then cross-searched to see if he owned any other properties. It turned out he owned 12 other rental houses.
Let’s say investors purchase two properties per year on average. Compare this to a traditional homeowner who will only move about once every 10 years. That means one investor client can be worth 20 times as many transactions as working with single-family owners. Your title company can usually pull up a list of non-owner-occupied properties.
When you approach this type of investor, ask if it’s time for them to do a 1031 exchange into a different property to take advantage of the low interest rates plus maximizing the amount of depreciation they can claim for tax purposes.
Strategy 11: Prospect the rental expireds
Greg McDaniel has used this strategy for years, and it’s been a tremendous boon to his business.
If your MLS posts lease listings, you need to note two different dates:
- First, if the property does lease, note the date it leased. Contact both the renter (with a postcard discussing down payment assistance to help them become homeowners rather than renters) and the owner who may be interested in selling or doing a 1031 exchange about two months before the lease would expire.
- Second, prospect rental listings that did not lease. Those owners may be much more likely to list now. Send them an update on their property value, or better yet, contact them by phone or in-person to see if they are interested in selling or doing a 1031 exchange.
Strategy 12: The ‘under contract’ opportunity
Although you can track when a property goes under contract on the MLS, the public doesn’t generally have access to this information. (Realtor.com does show whether a listing is “pending” or “contingent.” Redfin, Trulia and Zillow do not.)
Consequently, when you see a property go under contract, call 100 surrounding properties. Explain that you are calling because a neighboring property has gone under contract, and you were wondering if they would like you to contact them with the final sales price when it closes (provided this is legal in your state). Be sure to offer a CMA.
Alternatively, you could also do a postcard campaign that says, “A property near yours just went under contract. Contact me for details and to see the current value of your home.”
The bottom line is you can persuade homeowners to list with you by tapping into their current needs, wants and any pain they may have in their current living situation, as Lobb and Staub discussed at Inman Connect.
Also, focus on being in regular face-to-face contact with your past clients and key people in your sphere. You want to be sure you’re the one they’ve seen most recently face-to-face when they’re ready to list.
Bernice Ross, President and CEO of BrokerageUP and RealEstateCoach.com, is a national speaker, author and trainer with over 1,000 published articles. Learn about her broker/manager training programs designed for women, by women, at BrokerageUp.com and her new agent sales training at RealEstateCoach.com/newagent.