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With the current state of the market, it’s no surprise that the hottest topic at last week’s Connect Now was the low inventory — especially how to get reluctant sellers to list now.
Equally important, however, were bellwether trends to watch for in 2021, how agents can avoid burnout through better self-care, plus some simple strategies to improve your business.
Almost everyone today is struggling with this low-inventory, high-demand market. So, if you’re ready to break away from the competition and take more listings, here are some powerful ways to do it.
How to get reluctant sellers off the fence
When properties are selling almost instantaneously with multiple offers, sellers are rightfully concerned about listing their home without having secured a replacement property. Clelia Peters explained how companies such as Flyhomes, HomeLight, Homeward, Knock, Orchard, and Ribbon are helping to address this challenge.
There are two models or goals these companies hope to accomplish: They either turn a buyer into a cash buyer or turn a seller into a buyer, she said. They earn their money through spreads, (that is) the value of the home when they buy it versus the value at which they sell it. (This may be in addition) to a premium paid for using their service.
These companies market directly to consumers and are especially interested in working with real estate agents. Provided these services are available in your area, here’s how to put them to work in your business.
- Conduct a marketing campaign with the theme: Become a buyer before selling your current home. Contact Sally Agent at 800-555-1212 to learn how.
- When you go on a listing appointment, inquire if the sellers will be purchasing another home. If so, discuss these services as part of your unique value (selling) proposition. Not only will you increase your probability of winning listing, you will also lock in representing the sellers on their next purchase.
- These services are especially powerful in multiple-offer or contingent-sales situations. If you’re working in an area where multiple-offer competition is fierce, put your sellers in contact with one of these companies prior to showing them any properties. Once your sellers are approved, they will know how much they can pay for a property. They will also be more competitive in multiple offers because they will be able to close quickly, often on an all-cash basis.
3 pithy quotes for coping with today’s low inventory market
1. ‘Competence creates confidence’
Terrence Murphy of eXp Realty emphasized the importance of constantly upgrading your negotiation skills, having a deep knowledge of the contracts, knowing your scripts, plus mastering the other fundamentals in the business.
As Murphy explained, when agents get tired and exhausted from competing in today’s environment, competence comes out of muscle memory, which gives them confidence no matter how tired they are.
2. ‘Never lose your integrity over one transaction’
Murphy also encourages agents to think long term rather than focusing on a single transaction. Agents who want to do real estate for a long time should know that the market will shift again. Whether they’re buyers or sellers, your clients will remember how you treated them, Murphy said.
3. ‘Self-care isn’t selfish. It’s the lack of self-care that is selfish’
According to Stephanie Lanier, Lanier Property Group, it’s critical that agents be proactive about their self-care. It’s important that they understand “when to hit the brakes before hitting the wall.”
If you’re waiting until you hit the wall, Lanier said, it’s much harder to put the pieces back together. What’s selfish is to keep running into the wall and creating a wreck or disaster that everybody else has to keep putting back together again.
How to generate more listing leads from multiple offers
Glennda Baker of Glennda Baker & Associates in Atlanta, Georgia has created a powerful marketing strategy that allows listing agents to leverage a red-hot listing long after it has sold. When Baker received 38 offers on one of her listings, she contacted the neighbors living near her listing. Here’s the marketing message she used:
We had 38 offers on our listing and we have one new homeowner. Those 37 other buyers are still looking to buy in your neighborhood, and only one agent knows what every buyer looking in your neighborhood is willing to pay, and that’s me.
This type of marketing message can be used on postcards, circle-prospecting, cold-calling, door-knocking, social media, YouTube or one of the other video platforms.
Tiffany Curry of Berkshire Hathaway Home Services in Houston, Texas, agreed with Baker. She explained why a seller who lived next door to one of her listings reached out to her rather than his previous agent. She said she wanted the lady who listed the house next door because she knows the market and who’s in it, and she’s going to get the best price for the home.
Bellwether trends to watch for 2021
Fractionals, properties where several different people share ownership, are nothing new. Hotel chains such the Four Seasons, the Ritz Carlton and Starwood have built hotels that have private “residences” in prime areas across the country. When the owners are not using their residence, the hotel rents and manages it on behalf of the owner.
Pacaso, for example, is a fresh approach to fractionalization that specifically targets properties that are vacant part of the year. Pacaso creates a property LLC for each home, vets co-owners and handles the sale details. Once the property closes, Pacaso manages it. What’s more, it also pays agents a commission.
2. Wide (live) social audio — the next new hot tech platforms
Clubhouse, an audio-only platform with no video or playback, has taken the internet by storm. Facebook, LinkedIn and Reddit also appear to be developing their own platforms to compete with Clubhouse. The beauty of these platforms is that you can listen in when you’re driving, doing chores, exercising, etc.
If you haven’t checked out Clubhouse, it’s an excellent way to interact with industry experts as well as to learn from other Clubhouse users who share similar interest with you.
3. Cheap money has translated into buyers spending more for ‘move-in-ready’
Tommy Choi, co-founder of Weinberg Choi Residential in Chicago, Illinois, reports many of his clients have the $100,000 in the bank to do renovation work. Rather than spending their own money, however, they are electing to keep their cash liquid and buy a more expensive, move-in-ready home they can finance with today’s record low rates.
4. The vaccines appear to be having a positive impact on excess supply
Choi also believes that as restaurants and neighborhood amenities open up, people are more confident about returning to major downtown metropolitan areas.
As Choi mentioned, in summer of 2020, there were 17 months of inventory in the Chicago downtown high-rise market. The number has dropped to 12 months of supply. Choi said he thinks that trend is going to continue to snowball.
Anne Jones of Windermere Abode in Tacoma, Washington, noted a similar trend in her market. Their condo market dropped from 2.7 months of inventory in 2020 to 2.2 months recently.
This is trend is playing out nationally as restaurants, retail and entertainment venues start to reopen, and homebuyers begin returning for the benefits living in these areas offer.
4 best practices for today’s market
- To find the best deals, search for properties that have been sitting on the market for six weeks or more.
- If you don’t have a buyer’s agent, you can still hire another agent to do showings for you. Pay them $10 per house plus mileage.
- To avoid risks from buyers waiving inspection contingencies on multiple offers, encourage sellers to have their property inspected prior to listing it. Before a buyer’s agent shows your listing, make sure they receive with a full disclosure package including the inspection report.
- Always ask for a proof of funds on all cash transactions as well as with multiple offers where buyer may have to make up the overage due to a low appraisal.
If you would like to give your business a boost this spring, try implementing some of the suggestions from the experts at Connect Now. You just might have enough to take that special vacation this summer and rid yourself of your pandemic burnout.
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.