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As housing inventory remains low and the pandemic rages on, the key to working with buyers is good communication and managing the psychological experience involved in trying to get a home, a panel of industry leaders argued this week.
The panel convened for a breakout session of Keller Williams’ Mega Camp, the company’s annual gathering that this year was held virtually due to COVID-19. And right off the bat, Cincinnati agent and team leader Danny Baron argued that succeeding in today’s highly competitive market involves setting consumer expectations early on.
“It’s such a mindset game,” Baron said during the session. “You used to be competing against the sellers. You’re now competing against other buyers.”
That shift, which Baron said he’s seen take place recently, means agents need to have conversations from the get-go about what buyers are going to experience. That involves talking about competition, multiple offers, contingencies and other things that can potentially sink a deal. Baron added that he wants to help his clients learn what they’ll experience before they even begin making offers.
“Let someone else’s mistakes be your learning,” he said.
Nick Waldner, a team leader from Maryland, made a similar point. He typically sees buyers fall into one of three categories: Those who think a home is nice, those who think they might want to get it, and those who feel they can’t stand to lose the property.
“In this market right now, unless you’re No. 3, there’s a good chance you’re not going to get it, so maybe it’s not worth writing [an offer], if you’re not that invested in it,” Waldner said during the Mega Camp session.
Waldner went on to say that he doesn’t “want to be with a client who loses four offers in a row” because that client might become discouraged and move onto another agent. Instead, he wants to write offers that have a real chance of succeeding.
“We need to set expectations from the beginning,” he added.
Managing consumers’ mindset is so important that Harrison Beacher — a team leader in the Washington, D.C., area who also participated in the panel — actually brought in a psychologist to help train his agents. His goal was to prepare his agents so they can “set people up for the challenges they’ll face.”
Even after trying to manage expectations, some consumers were still get jittery, particularly when they have to pay high prices. And Waldner said that in some cases, he’s had clients who are concerned about a bubble.
In response, he walks them through the causes of the housing crash in 2008 and the reasons today’s market is different. He also breaks down how price appreciation means that waiting for a bubble to burst is a risky strategy.
“The way things have been going with pricing, imagine if a year and a half ago you said, ‘this is a bubble, I’m going to wait,'” Waldner said. “Now you’re paying 10 to 15 to 20 percent more.”
Aside from managing expectations, the panelists also said communication is key to succeeding in a competitive seller’s market. Baron has experienced this first hand, saying that at one point he and a client were competing against several other potential buyers. He had previously worked with the seller’s agent on another deal, and soon, that agent called him.
“He called me back and said, ‘We are picking your offer because of what you did on our last deal,” Baron recalled. “That was an amazing moment for me. If I have these relationships, and they are good, word travels fast.”
The other panelists agreed, with Waldner noting that he communicates to other agents that he has a full-time transaction staff that can help ensure deals close on time. His goal is to let other agents know that he wants to make deals “as smooth and easy for you as possible,” which should give him a competitive advantage.
Of course, even when agents work to manage expectations and communicate openly, they still sometimes lose deals. But Baron said in those cases he tries to communicate with the agent on the other side to maintain a positive working relationship.
“I have made it a practice to follow up with that agent and say, ‘Hey, I did what I could,'” Baron said. “I just want you to understand that. I do everything I can to get my deals to close.”