There are about 140 million housing units in the U.S., according to 2019 data from the Census Bureau, and in a normal market, we see more than 6 million homes listed and sold a year (2020 saw the most homes sold in 14 years, with the total reaching 6.5 million).
In today’s market, the number of homes for sale has diminished drastically. In February for example, there were less than 550,000 homes on the market. That was half as many that were on the market back in the winter.
Meanwhile, the demand from buyers has skyrocketed. What was never an ocean abundant with fish, considering over 99 percent of the homes in the U.S. are not on market, the current state of the U.S. housing inventory is more like a dried up sea bed with the remains of out-bid buyers left flopping around hopelessly.
For every accepted offer, there are a number of other very well-qualified buyers not having the chance to spend their money and find their next home. We’re all becoming very aware of these stats, as it has become part of the mainstream media storylines but it is indeed a crisis and one that needs to be solved.
The challenge lies in how to increase inventory when sellers seem hesitant to list their homes for sale. Why are sellers hesitant to sell? Are they waiting to see just how hot this hot market is? Are they playing an equity appreciation game of watching their home estimate go up every month and figuring out when to pull the trigger? Or could it be the other obvious notion of, “Where will I go once I sell?”
Although all of those options probably ring true to some varying degree, there also seems to be a large percentage of homeowners that have built the figurative moat around their lives this last year. They’re looking for ways to stay protected, yet are still willing to throw down the drawbridge to sell their home, for the right reason and the right price.
Homeowners have spent the last 12 months figuring out living and working from their homes and have really gotten to know where they live more than ever. This has led to some homeowners realizing that some old needs’ and some new wants are not being met with their current home and the thought of parting ways to find a new home creeps in. This homeowner has also spent the last 12 months likely studying real estate as a pastime while they lie in bed and have become experts of their own.
The question has always been how to garner the attention of the homeowner to be able to gauge their interest to sell — especially considering the level of interest, if you have a real buyer willing to typically pay a premium for their home in order to bet the market and get what they really want.
There’s a pent-up demand to upgrade by homeowners, but the requirement of listing a home and the effort it takes for all parties physically and emotionally leaves homeowners still reluctant. Homeowners are hoping for the right deal to fall from the sky, one which they didn’t have to take the time and prepare the home for and one that will allow them to sell privately and possibly for more money.
From an agent lens, it’s more important than ever to stay relevant in the eye of their buyer clients. And the most powerful way to do this is to bring inventory that didn’t know existed when they did their cursory ingest of a market.
This element of feeling, and indeed being, better educated sets the client apart from other buyers and is reciprocated to the agent that did the educating with the loyalty from the buyer.
Agents are savvy enough to know that they’re not going anywhere soon when it comes to being involved in a transaction, however what’s becoming more clear is what the roles of the agent will be in the new market.
Smart agents are now the “Indiana Jones” of the industry, digging in the past to unearth opportunities of unseen inventory just below the surface of what most of the market is picking through.
Here are 10 ways to be an off-market pro and find the perfect home that will sell and have your clients love you.
1. Stay connected to your market
Always be talking real estate. Keep your ear out for any hints of someone planning to relocate or upgrade, and make mental notes. Better yet, make CRM notes.
2. Have your buyers ready to strike
Timing is key now more than ever. Make sure your buyers are pre-qualified
3. Don’t door-knock
It’s in poor taste considering everyone’s reluctance to come in direct contact with people still.
4. Don’t write love letters
As tempting as you might be, or as much as your clients may want you to, don’t write love letters. This puts the home owners in a very difficult position with fair housing laws. Do not include photos of your clients either.
5. Be a detective
Find out as much information about a particular home including previous sales data and info about the current homeowner. Use tax records and previous listings.
6. Get everyone on board with the idea of contingencies
Make it a win-win for everyone. Get the homeowner focused on the possibility of getting what they really want, and let them know the buyer is willing to be patient.
7. Better yet, make it a win-win-win
If the homeowner doesn’t have an agent to utilize, there is a larger percentage of double ending a deal. With the right terms, many homeowners would likely be happy to utilize the same agent to expedite the deal. Just be mindful of your dual-agency limitations.
8. Look to the past
Expired listings and FSBOs are sellers hiding in plain sight.
9. Educate the homeowner
Let them know why it’s advantageous to sell off the market — it’s private and can net them more money.
10. Utilize technology
Apps like DropOffer and services like Vulcan7 offer agents great tools to tap into expired listings and the huge slice of homes that would sell in the off-market arena.
There are plenty of sellers still out there, but what’s changing is how they want to sell. They want to sell under their terms. If buyers’ agents implement some or all of the points mentioned above as well as some nearsighted patience on their clients’ side, they can indeed find a home that suits their clients’ needs in this new and wild market.
Greg Burns is a partner and luxury home specialist at Elite Pacific Properties, LLC. You can follow him on Instagram at isleluxury or LinkedIn atGregBurns/isleluxury.com.